So can we get real socialised healthcare yet? Seems like even the GOPosse would realise that this band-aid approach of doing just enough to get elected again isn't working.
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original-businessweekFresh Pain for the Uninsuredby
Brian Grow and
Robert BernerAs doctors and hospitals turn to GE, Citigroup, and smaller rivals to finance patient care, the sick pay much more
n a lucrative new form of fiscal alchemy, a growing number of hospitals, working with a range of financial companies, are squeezing revenue from patients with little or no health insurance. April Dial's dealings with Hot Spring County Medical Center in Malvern, Ark., illustrate how the transformation of medical bills into consumer debt means quicker cash for medical providers but tougher times for many patients of modest means.
Dial, a 23-year-old truck-stop waitress who earns $17,000 a year plus tips, suffers from Type 1 diabetes. Sudden drops in her blood sugar level have sent her to the emergency room four times in the past three years. In September she spent three days at Hot Spring, including two in intensive care, fighting complications from her ailment. The bills came to more than $14,000. Dial's job offers no health insurance.
Until recently her mother, Carolyn, who waits tables at the same roadside diner, sent Hot Spring $100 a month under the nonprofit hospital's longstanding zero-interest payment plan. Dial says she couldn't make payments herself because she spends more than $150 a month for other treatment and insulin.
Sophisticated Help
In October she learned that Hot Spring had transferred her account to a company called CompleteCare, one of the many small firms fueling the little-known medical debt revolution. Enticed by the enormous potential market of uninsured and poorly insured patients, financial giants such as General Electric (GE), U.S. Bancorp (USB), Capital One (COF), and Citigroup (C) are rapidly expanding in the field or joining the fray for the first time. CompleteCare informed Dial that under the complicated terms of her newly financed debt, her minimum monthly payment had shot up more than fourfold, to $455. Dial says she doesn't have anywhere close to that amount left over after rent, food, and other doctor visits: "Every extra dime I have goes to paying medical bills."
Collecting from "self-pay" patients like Dial has long been the bane of medical administrators. When they don't get paid immediately, hospitals typically recover around 10¢ on the dollar owed, even when they hire collection specialists. So hospitals and clinics are bringing in more sophisticated help. They are transferring patient accounts wholesale to finance experts, banks, credit-card companies, and even private equity firms. Many of these third parties use credit scores and risk-analysis software to price the debt and impose interest rates as high as 27% on past-due bills.
Among hospitals, nonprofits like Hot Spring County Medical Center are more likely than for-profit rivals to join forces with finance firms. Fewer nonprofits have effective in-house collection departments, and in many regions a higher proportion of patients at nonprofits lack insurance. "Hospitals can't just be an interest-free finance vehicle," says Todd Cole, director of patient accounting at TriHealth, a $2 billion pair of nonprofit hospitals in Cincinnati. "The world of $5 sent to the hospital and they will never send me to collections, never sue me—that world has gone away," he adds. TriHealth sells patient accounts at a steep discount to firms that specialize in collecting delinquent consumer debt. "Hospitals need their cash," Cole says. "It is the lifeblood that supports the doctors, the nurses."
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