Those that read this blog regularly will probably understand my perspective on private practice healthcare – it has to be run like a business in order to survive. If run properly, healthcare practices can be in a position to provide excellent care and community benefit with resources to spare for those in need.
So, in an effort to run a medical or dental clinic like a business, wouldn’t it make sense to know what the odds are of getting paid for services? You can bet that those selling cars, credit cards, and mortgages want to know the likelihood of payment before they sign their end of a payment contract. A default 6 months ago on an auto loan might make it difficult to finance a new mortgage as there is a higher associated risk with those who have demonstrated bad credit history.
Enter healthcare. Should the same rationale apply? Does a defaulted loan mean that a patient is less likely to pay their medical bill on time? My natural intuition tells me that this could be the case.
This begs the question – should medical practices use credit history in their analysis of their patient base? The hospitals are saying that this information simply helps them determine which patients will qualify for financial assistance, but I would also wonder if in some settings this information could be used to determine which patients to accept and which to refer elsewhere.
In a March 18th post at the Wall Street Journal Health Blog, Jacob Goldstein discusses this very topic and illustrates how hospitals are beginning to use information from Equifax to determine which patients are likely to pay their medical bills, providing hospitals with much valued information about their patients’ financial status.
To figure out which patients are likely to pay their bills and which ones are best written off as charity cases, hospitals are peering into patients’ financial records.
Some are using traditional credit scores that are used for things like car loans and mortgages. Others are buying reports specially tailored to predict the likelihood that a patient will pay a big medical bill, the WSJ reports.
Hospitals say it allows them to figure out more quickly which patients qualify for financial assistance programs, and makes them less likely to hound people who can’t or won’t pay. Some consumer advocates warn that the process could lead hospitals to deny elective procedures to patients unlikely to pay. Hospitals say that isn’t happening. Advocates also warn hospitals might push people to tap high-interest lines of credit to pay for medical bills.