More Health Care Outrages

As if the health care situation were not bad enough, Business Week has an very good report showing how medical providers are signing unwitting patients up to transfer their bills onto credit cards that charge unconscionable rates. How much further can this crap go?

36: “… 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.”

36: “A host of nimble firms like CompleteCare in North Little Rock, Ark., began exploring this terrain years ago. Bigger players have jumped in more recently, although the market remains fragmented and reliable market share information isn’t available. U.S. Bank, a U.S. Bancorp unit, finances about $2 million in patient debt per month through a medical-benefit firm, charging most customers annual interest of 13.5%, and as much as 24% on late bills. General Electric’s powerful financial arm markets its CareCredit card to dentists, plastic surgeons, and some hospitals, with loan volume expected to hit $5 billion this year, up 40% from 2006. Citigroup and Capital One now offer similar cards. “Everybody is saying [medical finance] is the next horizon — whether it is lines of credit or credit cards,” says June St. John, a senior vice-president at Wachovia, which is exploring the business. Whetting all these appetites is the $250 billion consumers pay in medical expenses out of their pockets, an amount that doesn’t include insurance premiums. That’s an estimate for 2005 from the consulting firm McKinsey & Co. The figure could hit $420 billion by 2015.”

36: “Many patients say they don’t realize their debts are being shifted to such interest-charging middlemen as GE Money Bank, the unit that issues the CareCredit card.”

39: “CompleteCare, the small Arkansas firm … says it works with 40 hospitals and more than 400 physician practices across the country. Addressing potential health-industry clients, the company boasts on its Web site that it “pioneered the concept that patients become consumers the minute they walk out of your facility”.”

39: Patients can sign an admission-consent forms that include a small-print section authorizing the hospital to turn over her account.


Grow, Brian and Robert Berner. 2007. “Fresh Pain for the Uninsured.” Business Week (3 December): pp. 34-41.


1 comment so far

  1. Oliver Woods on

    Hi there,

    I’ve been reading your blog and think it’s absolutely fantastic! Indeed, I haev actually realised since reading some posts that I have read your book, Manufacturing Discontent, and hugely enjoyed it. As someone who is quite influenced by Marxist economic understanding, though very critical in some areas, it’s been refreshing to read your blog and intellectual biography.

    I find it simply outrageous every time I read about healthcare in the United States. Unfortunately, in my country of New Zealand, we have moved from a totally state run and virtually free healthcare system (that is, free from direct charges) to one with extensive private competition with the public sector, constantly declining government expenditures owing to tax cuts during periods of right wing governments and also 20 years of gradual corporatisation and attempts to make hospitals more profitable through direct charges/a user pays system.

    From a reader in New Zealand,

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