A variety of hospitals around the United States now offer a mix of interest-free to low- interest loans to patients overwhelmed by rising out-of-pocket costs and medical bills.
Such financial offerings make good business sense, according to a recent Becker's Hospital Review article. The Consumer Financial Protection Bureau concluded in 2014 that some 43 million Americans owe medical-related debt, and that more than half of the debt that gets reported to collection agencies is medical in nature.
Florida Hospital in Orlando offers interest-free loans after formerly charging interest. Jeff Hurst, the hospital's senior vice president of finance, told Becker's that such a change makes the notion of paying off the debt stress-free and allows the patient to focus on their care and recovery. It also demonstrates that the hospital is not out to make a direct profit on the patient. As a result, the hospital has seen an increase in participation and collection rates.
St. Luke's Health System in Boise, Idaho offers patients a hybrid system. Loans are interest-free for the first year (previously, it was 18 months). Interest reaches 5 percent during the second year and 8 percent after the third year.
To learn more:
- read the Becker's Hospital Review article