IT’S ONLY A HOP, SKIP AND JUMP FROM INSURANCE AND MEDICINE TO USURY

An article in the August 30th edition of the New York Times, entitled “Doctors Offering No-Interest Loans to Patients” describes the emergent trend of doctors and dentists hawking cosmetic services in the same manner as furniture stores.

Of course, going into debt to pay for medical procedures is nothing new for many people. And this type of financing is still only a fraction of the nation’s $900 billion market for consumer revolving credit.

But as the price of health care continues to rise and big lenders pursue new areas for growth, this type of medical financing has become one of the fastest-growing parts of consumer credit, led by lending giants like Capital One and Citigroup and the CareCredit unit of General Electric.

Two types of procedures that the NYT article discusses are cosmetic dentistry and LASIK surgery, two types of procedures generally not covered by health insurance. [AUTHOR’S NOTE: LASIK surgery should be reconsidered as an excluded “cosmetic surgery”. It improves vision and saves patients (and insurers) the future costs of frequent eye exams, glasses and contacts. But since America’s fragmented health insurance system has little or no incentive to pay for preventative or cost-saving care, LASIK will likely never be reimbursed.] Ads for low- or no- interest financing for these types of services are very common in newspapers, television ads, and magazines.

Of course low- or no-interest loans do not technically exist. The providers merely raise the price of the services to cover their cost of offering such financing. But for consumers, the come-on appears attractive.

ON THE DARK SIDE

What the NYT article also presents is the increasing tendency of insurers (and employers) to shift health care costs to patients. This cost-shifting is a direct result of America’s abject failure to control healthcare costs and provide universal, cradle-to-grave healthcare coverage. Watch the sleight of hand as insurer’s open new revenue sources that exploit common gaps in coverage.

The room for expansion looks ample, as rising deductibles, co-payments and other costs may force more of the nation’s 250 million people with health insurance to finance out-of-pocket expenses for even basic medical care.

“As more and more of the costs of care are shifted to consumers, people are going to need more credit,” said Red Gillen, a senior analyst at Celent, an insurance and banking research firm. “They are still going to need health care.”

AS “MEDICAL SAVINGS ACCOUNTS” FAIL, MEDICAL CREDIT CARDS FLOURISH

Some insurers, including UnitedHealthcare, also have special credit plans available for insured members whose policies are linked to health savings accounts. Such policies combine high-deductible insurance with tax-sheltered savings accounts where money can roll over year to year until needed for medical expenses. But typically, the amounts of money being set aside do not go very far toward meeting even routine health expenses.

So far, among the 1.76 million health savings accounts in this country, the average balance is $1,327, according to a recent survey by Inside Consumer-Directed Care, a trade publication. To help people with health savings accounts meet the shortfall, the Exante Bank unit of UnitedHealth Group is trying out a card that extends credit at rates currently averaging about 10 percent to 13 percent, depending on the applicant’s credit history.

So there it is. Medical Savings Accounts, underfunded, as they nearly always will be, require patients to go into debt to obtain routine services. That’s real genius.
[AUTHOR’S NOTE: “Medical savings accounts”are effective at one thing, however. Selling high-deductible traditional indemnity insurance policies to a risk pool of healthy individuals that will likely not need expensive services. Pat Rooney*, former CEO of “Golden Rule” Insurance Company and political influence peddler, spread money around Washington and state capitals to gain in the mid to late 1990s to gain passage of “Medical Savings Account” laws.]

THE LAST DAYS OF SELF-PAY?

Healthcare, as funded and delivered in America, is grossly expensive and frequently of lower quality than other industrialized nations. So what’s changed from 1992?

HERE’S WISHING YOU GOOD HEALTH OR A QUICK DEATH IN THE DESERT OF THE REAL!