Consumer financing boom bodes ill for healthcare

This week, a piece [1] in The New York Times took a look at the growing consumer finance market for healthcare services. In the article, it noted patients are financing not only LASIK and tummy tucks, but also, to some degree, incurring large bills for basic services not covered by their health plans.

From the credit industry's perspective, this isn't a problem. After all, they make their money, patients get their treatment and doctors get paid up front. Everybody wins, right? 

Wrong.

The entire premise of high-deductible plans was that they would drive improvements in overall health system quality. We'd inform consumers about pricing and provider performance, and they'd make smart decisions based on their research. And providers, of course, would respond by lowering prices and boosting performance. In theory, it's a perfect market-driven solution.

The problem is, if consumers--for whatever reasons--are financing their healthcare through credit intermediaries, much of this model's value flies out the window. Patients who finance their care on the spot with their doctor's preferred credit vendor aren't voting based on quality or price--they're just accepting what they see as help. And that bonds them to a particular provider more than healthcare quality, in my experience.

As things are shaping up, it seems that while payors are having success demanding provider behavior and pricing changes, consumers aren't exercising their power efficiently. Adding a financial intermediary to the mix only makes things worse.

ODDS & ENDS:

- For those of you who wanted more information on CMS's plans to stop paying for preventable hospital errors, here's a link [2] I didn't provide with the original story. It explains the decision in light of overall changes to hospital payment methods.

- Here's one nurse's response to a recent story [3] suggesting that patients should push providers to observe better infection control protocols:

"For the most part, I don't object to recommendations made recently that patients and families put more pressure on their healthcare providers to comply with strategies (such as hand washing) that are proven to help prevent these infections.  I do object with the perception propagated by the media that hospital workers are somehow interested in passing on infections if they are not perfect in the execution of these strategies.
...I think it should be emphasized by the media that an excellent way to avoid hospital-acquired infections is to avoid the hospital all together if possible, clean up after yourself, wash your own hands and recognize that infections are EVERYBODY'S business.  If we help each other, a bigger impact can be achieved."

- Anne [4]

P.S.  FierceHealthcare won't be published Monday, as we'll be closed in honor of Labor Day. Have a great weekend, and we'll see you Tuesday.