Who’s Making Money From Medical Debt?
An article by Brian Grow and Robert Berner in Business Week profiles the revolution in the world of medical debt.
The new reality for a growing proportion of the 50 million or so uninsured Americans is that treating that diabetes, acute gallbladder, or even a child’s late-night earache, means more consumer debt. Current interest rates begin at about 13.5% and increase to 27% for overdue accounts.
According to Grow and Berner, “Collecting from “self-pay” patients … 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.”
Who are these companies? Many small companies have sprung up in regional markets such as Complete Care of Little Rock Arkansas, but bigger, more familiar companies are entering the field. Some of these include, General Electric (Care Credit), Citi Group, and Capital One. Wachovia is also considering entry into the lucrative market which for GE will amount to $5 billion this year.
“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.”
Illness is inevitable and treatment is costly, isn’t that a reasonable argument for the world’s most powerful nation to revisit the creation of a nationalized health care plan?
The complete article (Fresh Pain for the Uninsured) may be read here
Go here to visit “Physicians for a National Health Care Program
| This entry was posted on Wednesday, November 21st, 2007 at 12:50 pm and is tagged with risk analysis software, private equity firms, interest free finance, little rock arkansas, nonprofit hospitals, current interest rates, collection specialists, medical administrators, medical debt, due bills, steep discount, overdue accounts, complete care, lucrative market, capital one, regional markets, earache, consumer debt, new reality, credit scores. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback. |
One Response to “Who’s Making Money From Medical Debt?”
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Your title of your blog stated “Whp makes money fromMedicla debt. Well, YOU can if you wanted. Many times this dentist and doctors can collect from their clients so they are willing to sell their debt to a “Collector” for pennies on the dollar. This collector (YOU) will typically spend 20 cents on the dollar to buy these debts. Then you contact the clients and have them pay 100% of the debt. Many of these junk dealers are making HUGE amounts of money from it. Even if you get come money from the old patients it will cover the cost you spent to get them. Good luck