Hospitals To Patients: "How About You Put That Liposuction On Your Credit Card?"

A Consumer Reports study finds that medical professionals are pushing high-interest lines of credit and financing options on patients. Credit agencies are even partnering with hospitals to offer branded credit cards so patients can finance elective cosmetic surgeries like liposuction and hair removal.

Some highlights:

  • Interest rates can jump to as much as 27.99 percent retroactively. That’s the rate Chase HealthAdvance’s zero-interest plan charges, for example, if you miss a payment or don’t pay off the debt in the promotional period. By contrast, the average fixed-rate credit card charges 11.9 percent, according to Bankrate.com.
  • Consumers report that they sometimes feel pressured by medical providers to finance needed medical care, in some cases while sedated or recovering from treatment.
  • Doctors and dentists have financial incentives under these arrangements to encourage patients to sign up for more expensive treatments and to steer them to extended financing plans that take a smaller cut of the practitioner’s fee.
  • When hospitals persuade patients to tap unused credit, those patients can lose the power to bargain for discounts or even obtain charity care

Overdose of Debt [Consumer Reports]
(Photo: Getty)

Comments

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  1. jscott73 says:

    Hi, yes I would like an Implant Equity Line of Credit.

  2. MsClear says:

    Gee golly, what a great system!

  3. Silversmok3 says:

    Congradulations, your heart procedure was denied coverage by you healthcare provider.

    But fear not!At 29.99% APR, you can finance your life saving procedure……

    So this is M Night Shamaylan’s ‘The Happening’. Talk about scary….

  4. Alex Chasick says:

    @jscott73: That would be amazing.

  5. SadSam says:

    Oh my sad puppies, this is awful. Conflict of interest??

  6. Invalid_User_Name says:

    UNACCEPTABLE. The minute any health care provider of mine starts pimping out debt, I walk.

  7. Gilbert Tang, Jr. says:

    Einstein would have modified his comments on the nature of compounding interest to include that of the retroactive sort, I’m certain of it.

    @SadSam: Can you picture the dialogue?

    Dr. Bates: I’m afraid I have bad news, Mr. Graham.

    Mr. Graham: Don’t tell me, it’s positive.

    DB: I’m afraid so.

    MG: I…I can’t afford chemo. My insurance company already said they wouldn’t cover the procedure because I neglected to mention on my application that I got sent home from school with lice in the fifth grade.

    DB: Well, I’ll tell you what we can do. I’m going to take this piece of paper, and on it I’m going to draw four squares. The left two squares will be for your trade-in value and your down payment, and the right two will house the price of the surgery and your monthly payment.

    MG: Trade–wha–down–who?

    DB: Well, medicine is changing, Mr. Graham. These days, hospitals have become sympathetic to the ever-increasing costs of healthcare. Instead of being saddled with a huge bill upfront, for example, now you can finance your survival!

    MG: That’s…that’s great. You mentioned trade-ins? How does that work?

    DB: Well, seeing as though the cancer hasn’t spread to your kidneys or lungs, we’d be happy to take one of those. GA-Book value on a healthy lung goes for about $16,000, private party. We’d be happy to offer you $8,000. Can I put you down for 8 on trade?

    MG: I..I guess…

    DB: Any stocks, bonds, savings?

    MG: No.

    DB: How much do you have in your wallet?

    MG: Uh, about $70?

    DB: Great! So we’ll put you at $70 down, plus the $8,000 for your kidney.

    MG: You said lung, $8,000 for my lung.

    DB: Same difference. Anyway, so what are you looking to pay per month for your chemo?

    MG: Well, I haven’t budgeted for that sort of thing. It wasn’t in the plan, if you know what I mean.

    DB: Right, well, how much do you make a month…before taxes?

    MG: Um, about $2,000?

    DB: Ouch, yeah, well, typically use a 40% of gross ratio, so you can probably afford about $800 per month. Sound about right?

    MG: Well–

    DB: Remember this is your life we’re talking about here…

    MG: I…I guess…

    DB: GREAT! So we’ve got your payment! I’ll go ahead and take this to my finance manager to get it approved; but first I’ll have to haggle with my GM to make sure I can get you this incredibly low of a payment. As long as they both sign off, we’re golden!

    MG: But…but we haven’t talked about the price of the procedure yet.

    DB: Sure we did: $800 per month.

    MG: Er, okay, but for how long?

    DB: Well, I guess that depends on how good a job we do, doesn’t it, Mr. Graham!

  8. Caslonbold says:

    OH YES – I was at my dentist a month ago and while X-rays were being developed the nurse came to talk to me while I was laying in the chair. She had a brochure for a financing program and wanted to call/apply on my behalf so we could finance the $3500 root canal they wanted to do. WTF!! Thanks but NO. The interest was over 25%. The X-rays came back as just a filling and then I informed them that I would seek my dental care in Thailand for 1/4 the price of US dental work. Someone needs to slap these dentists and doctors.

  9. billbillbillbill says:

    Sure helped with dentist bills when I had a couple of cavities while in college. Financed 0% interest for 12 months through CareCredit and paid it off during the summer.

    Didn’t know the interest rate and didn’t care since I was going to pay it off.

  10. yaj says:

    Care Credit (brought to you by GE Money Company) has been doing this with cosmetic dentistry for a while now. Insurance doesn’t cover it, charge it. Miss a payment by even one day, bam, interest rate goes through the roof. Make the minimum payment each month, on time, balance remaining reverts to the same rate as if you missed a payment. Like any credit agreement, read the fine print, or you may get screwed.

  11. doctor_cos wants you to remain calm says:

    @Gilbert: Easily Post of the week

  12. Gilbert Tang, Jr. says:

    @yaj: The problem with reading the fine print is twofold.

    First, the vast majority of the public doesn’t understand the fine print in the first place, even with regulations requiring a certain level of transparency in credit disclosures.

    Second, while some may disagree that frivolous things like cosmetic dentistry aren’t necessary, there are a lot of people who feel they have no other choice (especially if the scenario switches to non-elective procedures). In this case, even if they do comprehend the legalese, they can still be screwed. It only takes a day to be late…

  13. Gilbert Tang, Jr. says:

    @doctor_cos: That was a super cool thing to say, thank you.

    Also, check this out: [consumerist.com]

  14. QamarHizeck says:

    I financed my Elective Lasik Eye surgery. The first year was interest
    free. So I paid it off before the end of the year. It turned out
    good for me.


    —-
    “If you aren’t failing half the time then you aren’t taking enough
    risks.” — An old boss

  15. the_wiggle says:

    @Gilbert: rotflmao. pity it’ll be true one day soon.

    @yaj: ah yes. care credit. dental insurance is rather a joke (unfunny one at that) when major work needs doing & care credit not much better. After fine print reading, DH decided he’ll just get 2 crowns/yr til his whole mouth is fixed. Sucks, especially in this look-ist world, but no way in hell can we afford 15K in work (lowest est. after seeing 3 dentists), never mind paying it off in a year :( My father said screw it dentures are cheaper & is waiting for his to all fall out. (no, the VA won’t cover any work – not service related)

    funny how there’s all kinds of reduced cost, quality dental care out there for kids & nothing for low-income or fixed-income adults.

  16. @QamarHizeck: I did the same thing with some extensive/expensive dental work – got a loan for $1000, interest free for the first year; paid it off in about 7-8 months.

    Not exactly the best way to go, but it worked and will hopefully be a one-time thing.

  17. PinkBox says:

    @QamarHizeck: I did exactly the same thing! One year of no interest, no payments required. It was easy to pay it back.

  18. bohemian says:

    One of our local hospitals is pushing people to these cards if they have an outstanding hospitals bill they can’t pay. From what I heard was they would push them to apply for this rather than offering them charity care or a bill reduction.

    I have seen these cards at a few doctors and dentists. They seem to show up at places they are more worried about how much they can charge you for extra things than your health.

    Does anyone know if dental work is cheaper in Canada?

  19. Gilbert Tang, Jr. says:

    @scarletvirtue – plays well with scissors: Unless the $1,000 loan only covered a portion of the total, I think that’s pretty INexpensive in the grand scheme of medical things.

    Monday afternoon my girlfriend is scheduled for a routine root canal that is costing approximately $700 (this includes two visits total, x-rays, cleaning, and the RC itself).

  20. opsomath says:

    The hell.

    *mentally ups his percentage of income going into his HSA*

  21. Trai_Dep says:

    Ah, the magic of the marketplace.

  22. Trai_Dep says:

    Let’s see those Commie Europeans and Socialist Canadians beat this!

  23. Bladefist says:

    I’m all for private health care. But when hospitals, and insurance companies engage in actions that will force government to get involved and regulate, I can’t feel bad for them. With all the politics of UHC in the air, you’d think the people who would NOT benefit with UHC would be playing nice. Not the case. I just don’t get it.

  24. evslin says:

    Consumers report that they sometimes feel pressured by medical providers to finance needed medical care, in some cases while sedated or recovering from treatment.

    That is exceedingly dickish on the part of the providers who do this. How is nudging somebody into a financial decision while under sedation even legal?

  25. Parting says:

    @Trai_Dep: He, he, he.

    In Canada, there are some credit card/loans for plastic surgery. I’ve even seen an ad with a photo of a women and a men. And several arrows pointing to different body parts with ”starting from 39,99$ per month” mention.

  26. Parting says:

    @Caslonbold: Just find a local dentistry department in an university for these kind of problems. It will take more time, but everything will be done ”by the book” and you’ll pay 30% of regular cost for the procedure.

    (By the way, a return ticket to Thailand is around 2-3K right now :)

  27. TeraGram says:

    I weep, bitterly.

    This is not the country I was born into.

    As a child, I was often very sick. My parents had insurance, but even so, the bills mounted, quickly. I knew my parents often sold items of value to pay bills. I knew that sometimes bills went unpaid and we ate way more macaroni & cheese than most families… but still… whenever I was sick we were never turned away.

    I know there were discussions about best treatment plans and different alternatives.

    Today? I don’t think that any of that would’ve happened. Asthma and allergy deaths are way up. Why? Because parents oftentimes can not afford the medicines as prescribed. Doctors often refuse to negotiate, stating “standard of care”. 35 years ago, some herbal medicines were considered and in fact were acknowledged by physicians to be “as good” and “no harm, at the least”. Now? Physicians know it is financial suicide to admit such and mumble things like “the internet is dangerous” and “not all sources of information are the same”. Heaven forbid you say “well I found this info on the Mayo Clinic’s site” because then they have cases to show you that not even the hallowed halls of the Mayo Clinic are above suspicion now.

    No, dear friends, the almighty front office of the corporate firm determines your care. Sure, there may well be a pill that can cure or alleviate your condition, but screw that option! “Standard of Care” demands you submit to surgery!

    Those pills you took for 10 years? Your condition was fine? Now we want you to take these NEW pills. Ooops sorry your insurance won’t pay for them! STANDARD OF CARE says you must take them and we will not prescribe those old pills anymore!

    oh no bad side effects sorry you died

    I weep. Bitterly.

  28. Skankingmike says:

    @Gilbert: HILARIOUS!

    of course this is probably more true than anything a politian will talk about.

    You want good medical care for next to nothing or free move now. maybe thats the problem.

    Everybody moves here in droves! maybe Americans should go and bother other countries in mass droves like they did to us. See how much Europe is open to take back their lost citizen’s and give us free crap.

  29. FangDoc says:

    I’ve said this before…

    If you don’t have dental insurance, and don’t live near a university with a dental school (great work, amazing deal, but you WILL be spending a ridiculous amount of time there, i.e., 3 hr. appt for 1 filling) GO TO A NON-INSURANCE-PARTICIPATING DENTIST.

    We don’t artificially inflate our fees to make up for low insurance reimbursement rates, and we don’t have a special higher rate for cash patients.

    My office (I’m an associate, not an owner) gives an 8% discount just for paying in full before the procedure. There are lots of ways to get quality care without involving yourself with one of these predatory lenders.

  30. bohemian says:

    @TeraGram: I have had this happen more than once. If your paying attention you can tell what clinics are operating on the profit first basis.

    How screwed up is it when my husband gets better and unbiased care through the VA compared to the private clinics in town. He has been using them for non service connected stuff because they are not trying to see how many high priced drugs they can put him on or how many unnecessary MRIs they can do.

  31. Rachacha says:

    A new line of CitiBank Commercials Choose your own card design:
    1) Breast Implants – Before & After
    2) Liposuction needle getting jabbed into an @$$
    3) Surgical lines drawn on the face prior to a facelift
    4) Extreme close-up of a doctor’s face wearing a surgical mask
    5) Sexy Nurse

    Now choose between the following:
    1) Low Intrest rate of 28.99%
    2) Double points on other surgical procedures (Earn only 10,000 points and receive a voucher for a free checked bag on your favorite airline)
    3) 0% on balance transfers when you maintain a $8000 purchase balance.

    CitiBank What’s in YOUR Wallet

  32. Trai_Dep says:

    @bohemian: The VA gets pretty high marks, actually. When the Republicans aren’t trying to slash their budget or staff them w/ veteran-hostile appointees.
    As the VA should, of course: demand they supply good care and they will.

  33. dragonfire81 says:

    “Doctors and dentists have financial incentives under these arrangements to encourage patients to sign up for more expensive treatments and to steer them to extended financing plans that take a smaller cut of the practitioner’s fee.”

    And that in an nutshell says what’s wrong with healthcare in the U.S., it’s just one big game of “take the patients for as much money as you possibly can.”

  34. Mr. Gunn says:

    Trai_Dep: but, but, but, the free market will solve all this, especially once we give the insurers tons of subsidies so they’ll cover the high-risk people.

    Just look how well that system has worked for the airline industry!

  35. dumblonde says:

    When I was shopping for a new car, the saleslady actually wanted me to put the down payment on my credit card! Needless to say I didn’t buy the car from her.

  36. Bladefist says:

    @Mr. Gunn: I’m not aware of anyone wanting to turn the veterans insurance over to the free market.