One More Interest Against Universal Coverage

Many Beltway insiders believe fundamental reform of the health care system will happen after the 2008 elections. Just think of all the “there but for the grace of God go I” stories like Sergio Olaya’s:

Mr. Olaya, 21, is struggling with $255,000 of medical bills incurred by his mother before she died in April from an aggressive form of brain cancer. . . .To pay the bills, he is selling the Maryland home where he lived with [her].

His mother . . . had health insurance in most of her jobs over the last 20 years. . . . But she had been unemployed and uninsured since December. [She] had applied for a new federal job. When the job offer finally came in March, her son said, she had just suffered a stroke and could not get out of bed to answer the telephone. In another month or two, she might have had health coverage through her new job.

So Olaya loses big time due to our crazy quilt coverage system.

But I fully expect opponents of reform to discount every story like this as unusual, bizarre, a mere anecdote that isn’t a sound basis for policy. Their sage perspective will likely be amplified by powerful interests who now profit from medical debt. Businessweek has been covering the medical debt industry in depth, and this week’s installment newly demonstrates how eager financial interests are to advance “the transformation of medical bills into consumer debt:”

The pool of self-pay patients is mammoth: Some are among the nation’s 47 million uninsured; others are among the 16 million whose plans offer scant coverage or have deductibles as high as $10,000. . . . .General Electric’s powerful financial arm markets its CareCredit card to dentists, plastic surgeons, and some hospitals, with loan volume expected to hit $5 billion this year, up 40% from 2006. . . . “Everybody is saying [medical finance] is the next horizon—whether it is lines of credit or credit cards,” says June St. John, a senior vice-president at Wachovia. . . .

Before anyone discounts the disasters of people like Mr. Olaya as “mere anecdotes,” they might wish to consider whether a health care system that piles massive debt onto the tragic death of a family member really reflects American values. Regardless of anecdotes’ attention-grabbing power, it’s likely that whatever impact this one makes will be a drop in the bucket compared to the special interest money thrown off by the current system’s inequities.

Below the fold: a hidden TILA issue?:

At Spectrum Health, a nonprofit group of seven hospitals in Grand Rapids, Mich., self-pay patients who can write a check within 30 days receive a 20% discount; those who pay within six months get 10% off. Patients who charge their debts to CarePayment get no discount. Referring to CarePayment, Kathleen Engel, an associate professor at Cleveland-Marshall College of Law, asserts: “This is a markup, not a markdown.” Engel, a consumer law expert, says that because hospitals effectively charge more when patients use CarePayment, the hospitals should disclose the price difference as the equivalent of an interest rate under the federal Truth in Lending Act.

Joseph Fifer, Spectrum’s vice-president of finance, said its disclosure is legally sufficient. Steven M. Wright, Aequitas’ senior managing director for health markets, agreed. Wright said Aequitas complies with the law by disclosing its payment terms when it sends CarePayment charge cards to new customers.

I guess so long as it’s all disclosed, they may as well open payday lending branches in ERs. But here’s a last word from the chief financial officer of Methodist Le Bonheur Healthcare:

“If we heal somebody medically, but we break them financially, have we really done what is in the best interest of the patient?”

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