NCPA - National Center for Policy Analysis

WHY HOSPITALS WANT YOUR CREDIT REPORT

March 19, 2008

In a development that consumer groups say raises privacy issues, a growing number of hospitals are mining patients' personal financial information to figure out how likely they are to pay their bills, says the Wall Street Journal.

For example:

  • Some hospitals are peering into patients' credit reports, which contain information on people's lines of credit, debts and payment histories.
  • Other hospitals are contracting with outside services that predict a patient's income and whether he or she is likely to walk away from a medical bill.
  • Hospitals often use these services when patients are uninsured or have big out-of-pocket costs despite having health insurance.

Despite criticism, hospitals stand by the practice:

  • Hospitals say it helps them identify which patients to pursue actively for payment because they can afford to pay.
  • They say it also allows them to figure out more quickly which patients are eligible for charity care or assistance programs.

Administrators also argue that these credit checks can help them minimize losses.  In 2006, nearly 5,000 community hospitals provided uncompensated care costing $31.2 billion, the vast majority of it charity care or unpaid patient bills, according to the American Hospital Association.

Consumer advocates say the practice creates the potential for hospitals to misuse the information by denying or cutting back on patients' care if they can't pay.  What's more, hospitals could scour a patient's financial records for credit lines and encourage the patient to tap them, despite high interest rates or other costs.

Some hospitals that have begun checking patients' financial information will do so when they first register for treatment, while other hospitals hold off until after patients have received care.

Source:  Sarah Rubenstein, "Why Hospitals Want Your Credit Report," Wall Street Journal, March 18, 2008.

For text:

http://online.wsj.com/article/SB120580305267343947.html 

 

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