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Thursday, August 30, 2007

No interest, no payments 'til Christmas 2008!

On your gall bladder operation.

Comments (4)

Just around the time that the rest of the credit market is on fire, the medical profession decides to jump in with both feet. I wonder what security is offered for the loan?

Many docs - and I'd guess most primary care docs - have for years provided many services in advance of payment (except maybe a modest co-pay) and have not charged interest on unpaid amounts out to 90 days or more... with no credit check. Just try getting finance terms that easy from professionals of similar education, such as lawyers. (Nothing personal, Jack.) It's not that they don't know better, either... it's just the way primary care has traditionally run, and it's what patients expect.

The big deal here is that someone other than the provider is loaning the money. It's probably a pretty good deal for the docs... I imagine they get paid up front and it's the credit company that has to deal with payments and collections. Any marketing benefit from offering this kind of deal may well be incidental.

(I wonder if this might help drive down medical costs overall? The patient sees the price up front so they can shop around a bit on price, and the doc is certain of receiving payment so he doesn't have to pad the price to cover other deadbeat patients. Interesting.)

There have been medical credit cards for a while too...

"I wonder if this might help drive down medical costs overall?"

I think the answer is almost certainly Yes. Procedures such as cosmetic surgery and lasik eye surgery have been going down in real terms precisely because insurance doesn't cover them, so patients are paying out of their own pockets.

Interest free loans are simply the market's way of responding to consumer demand. Everything we can do to move away from third-party payers in health care will help reduce medical costs.

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