An unhealthy practice

Friday, March 21, 2008 | 2:05 a.m.

A credit report used to be something that was requested only when a person was seeking to purchase a house, a car or another large item.

But now an increasing number of hospitals are examining prospective patients’ credit ratings and other financial information, The Wall Street Journal reported this week. Some hospitals are simply mining patients’ available lines of credit and payment histories, while other hospitals are hiring companies that try to predict whether or not a patient is able, or likely, to pay a hospital bill.

Hospital officials say such predictions will help them avoid the costs of pursuing legal action against people who are not going to be able to pay anyway. The collections process is time-consuming and expensive, they say, and hospitals often spend a lot of resources trying to collect from people who, in the end, cannot pay their bills.

But consumer and privacy advocates say the practice carries the potential for hospitals to use credit information to deny nonemergency services or surgeries to patients whose credit is less than healthy even though many hospitals say they wait until after services are delivered to probe a patient’s finances.

Keith Eggert, vice president of revenue management for Orlando Regional Healthcare’s group of seven nonprofit hospitals, told the Journal that a patient’s credit report is examined after care in order to assign the patient a health care credit score. That score is used to rate patients as being at low, medium or high risk of not paying a hospital bill.

Those deemed at low or high risk are not considered worth the extra cost and effort of collections actions. But officials will pressure the medium-risk patients “to find some method of payment,” Eggert said.

Other hospitals are using patients’ credit histories to get them to sign up for extended payment plans that can come with high interest rates, Mark Rumanian, executive director of the Access Project, a medical debt research and advocacy group, told the Journal.

This is indeed a slippery slope.

Certainly, hospitals should be paid for the services they provide. But this should not give them leeway to dig through patients’ financial histories or offer interest-bearing lines of credit as if people are buying a house or a car. As one North Carolina heart patient said, hospitals have “no business knowing that information.”