Laura Cameron, then three months pregnant, tripped and fell in a parking lot and landed in the emergency room last May; her blood pressure was low, and she was scared and in pain. She was flat on her back and plugged into a saline drip when a hospital employee approached her gurney to discuss how she would pay her hospital bill.
Though both Cameron, 28, and her husband, Keith, have insurance, the bill would likely come to about $830, the representative said. If that sounded unmanageable, she offered, they could take out a loan through a bank that had a partnership with the hospital.
The hospital employee was “fairly forceful,” said Cameron, who lives in Fayetteville, Ark. “She certainly made it clear she preferred we pay then, or we take this deal with the bank.”
Hospitals are increasingly offering “patient financing” strategies, cooperating with financial institutions to offer on-the-spot loans to make sure patients pay their bills.
Private doctors’ offices and surgery centers have long offered such no- or low-interest financing for procedures not covered by insurance, like plastic surgery, or to patients paying themselves for an expensive test or procedure with a fixed price.
But promoting bank loans at hospitals and, particularly, emergency rooms raises concerns, experts say. For one thing, the cost estimates provided — likely based on a hospital’s list price — may be far higher than the negotiated rate ultimately paid by most insurers. Sick patients, like Cameron, may feel they have no choice but to sign up for a loan since they need treatment. And the quick loan process, usually with no credit check, means they may well be signing on for expenses they can ill afford to pay.
The offers may sound like a tempting solution for scared, vulnerable patients, but they may not be such a great bargain, suggests Mark Rukavina, an expert in medical debt and billing at Community Catalyst, a Boston-based advocacy group.
His point: “If you pay zero percent interest on a seriously inflated charge, it’s not a good deal.”
How the Loans Work
Between higher deductibles and narrower networks, patients are paying larger portions of their medical bills. The federal government estimates that consumers spent $352.5 billion out of pocket on health care in 2016.
But many patients have trouble coming up with cash to pay bills of hundreds or even thousands of dollars, meaning hospitals are having a harder time collecting what they believe they are owed.
To solve their problem, about 15 to 20 percent of hospitals are teaming up with lenders to offer loans, said Bruce Haupt, CEO of ClearBalance, a loan servicing company. He, along with many analysts, expects that percentage to grow.
The process begins with a hospital estimate of a patient’s bill, which takes insurance coverage into account. A billing representative then lays out payment plans for the patient, often while he or she is still being treated.