0% Financing

From today’s New York Times, a piece about the use of loans to pay off expected medical balances, a couple choice quotes:

Zero-interest financing, a familiar sales incentive at car dealerships and furniture stores, has found its way to another big-ticket consumer market: doctors’ and dentists’ offices.

And:

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.

Now, for the scary one:

UnitedHealthcare is also testing a medical credit card that would offer reduced rates.

Does anyone, anywhere – except the employees of UHC and their spouses – think that United’s appearance here will benefit the patients or providers? Especially pediatricians? Given that the credit card HSA patients are using to pay their bills is owned by a bank that is a subsidiary of UHC, UHC makes money coming and going. It’s truly immoral.

What does this have to do with pediatricians? I think peds should offer payment plans much like OBs and dentists have done for years. SKIP THE MIDDLEMAN. When a woman gets pregnant, what do many OB offices do? They bill the family monthly, knowing there’s a multi-thousand dollar bill at the end that most folks can’t pay at once. OBs get their money up front. What do orthodontists or dentists do? They let you spread your payments out. You pay throughout the entire process and for months after.  Why? Because they’d rather get their thousands of dollars over time than have you chose not to do the procedures at all.

Why not peds? Each newborn who hits your practice should have, booked, a dozen visits in those first 24 months. With all the imms, they are expensive visits. Run some quick numbers on your office and you can accurately estimate the medical bills for the first 2, 3, 5? years that a patient is in your practice. Why not get your parents signed up to a plan whereby they pay a fixed amount each month and you guarantee that you’ll see them for their visits? Even if the monthly amounts don’t actually cover the full expected charges, it gives patients financial incentives and reminders to come in.  I’m not suggesting you write off any shortfalls in the payment plans!

If you aren’t convinced, think about the HSA plans in your office. A patient comes in to your office 2x in January and racks up $600 in bills…but the employer hasn’t funded the HSA plan well, so the patient has to pay the entire thing truly out of pocket. Wouldn’t it be better to say, “We’ll charge you $200 a month for the rest of the year and let’s book your 6month PE now and perhaps even your 1Y. At that point, we’ll settle up the difference.”  You’ve got $1,200 in payments ensured and 2 more important visits in your appointment book.

There are other ways to structure the process, but the idea is simple. Other folks are using it and peds have an “expected utilization” path that should be easy to monitor.

Is there any reason to give UHC part of this pie?

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