Is your fertility doctor a predatory lender?

December 13, 2012Carole 1 Comment »

Although the trend has been toward more insurance companies offering coverage for infertility, most patients still have little or no insurance coverage for infertility treatments which can be very expensive, especially if high tech in vitro fertilization lab work is involved. To pay for these treatments, patients sometimes take out personal loans through a bank or use their credit cards. Some companies have created fertility-specific loans which are offered to patients through their doctor’s fertility clinic–and the doctors are often given a referral bonus or reward for each loan that is made to their patients. Resolve, the infertility support group lists various infertility financing options including commercial infertility loans (without specifically endorsing them) on their website.

Just this week, two articles raised ethical issues about the practice of infertility physicians directing patients to sources of infertility loans and profiting from the referral or actually owning stock in the lending organization. In the Forbes on-line article, “Are infertility doctors turning into a predatory bankers?”, Peter Ubel, physician and behavioral scientist at Duke University, implores physicians,  “Don’t let your interest in the bottom line cause your morals to bottom out.” He makes the point that there is already an inherent conflict of interest in the physician-patient relationship when doctors are paid on a fee-for-service basis for medical services (not outcomes) and where more medical care (more services)  means more fees and income for the doctor. This conflict of interest is aggravated in the case of infertility services where very expensive treatments with perhaps only a 50% chance of success (or less) are paid for in many cases directly out of the patient’s pocket, not through insurance. He does not support additional regulation to restrain unethical fertility medical loan practices but instead asks physicians to refrain from involving themselves in the medical loan business, particularly if kick-backs are involved.

In a Slate article, “Is your fertility doctor taking kickbacks?”,  a similar point is made, emphasizing the fact that patients undergoing fertility treatments are a vulnerable patient population. Even though infertility medical procedures are deemed “elective”, patients are not always able to be completely analytical and unemotional about buying infertility care because the desire to have a child is a biological drive strongly reinforced by cultural and social pressures. The fact that infertility can produce just as deep psychological effects (for example,  depression) as a cancer diagnosis can  further supports the notion that infertility patients may be less discriminating health-care consumers and more vulnerable to predatory lending  practices, especially if their trusted doctor endorses a particular lending company.

A Consumer Reports article called “Overdose of debt: Lenders push risky credit from everything from cancer to Botox“, suggests that little has changed since 2008 when this article was originally published. The Consumers Reports article explains that some loans are actually worse than credit card debt because if a payment is missed the interest rate can jump to almost 28%. Details are copied below (in italics) from the Consumers Reports article:

  • 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.

Some tips for managing  your medical expenses and finding acceptable loan terms:

  • As for an itemized estimate of the cost to you of the medical services that are being offered. When you are billed, ask for an itemized bill and check over the charges to make sure they are accurate. Sometimes the medical plan changes and the change is not reflected in the bill. Hospitals are required to provide itemized bills.
  • Ask about cash discounts if you can pay cash at the time of service. Cash pay discounts of 20%  are common in many infertility clinics. When negotiating discounts or terms of payment with the infertility clinic, make sure you are talking with their finance person. Most clinics have dedicated personnel to explain the costs of treatment and how and when payment is due.  Get promises in writing.
  • Ask if there are any discounted rates for special groups (eg, military veterans). Some private infertility clinics offer discounts for military personnel or for other reasons (financial need).
  • Carefully evaluate the time that you have to pay off a loan (24 month maximum repayment periods are common). Determine what the monthly payment amount is. Is the monthly payment a minimum payment or a fixed payment? What happens to your loan or interest rate if you pay less than the minimum or miss a payment? Sometimes these terms are negotiable. Ask.
  • Consumer Reports recommends that if you must use credit, “shop for the best general-purpose credit card deal rather than take a health-care credit card or loan marketed through your doctor or hospital. Zero-interest offers are a good deal only if you’re absolutely sure that you will be able to pay the balance in full during the interest-free period. If you can’t be sure you’ll be able to pay on time, Curtis Arnold, founder of CardRatings.com, suggests putting medical charges on one of your existing credit cards and then transferring that balance.” Ask about transfer fees, if any.

Finally, ask your doctor if he/she receives payment for referring you to a particular loan company or loan product or owns stock in the lending company. Your doctor wins ethics points if he/she discloses this conflict of interest upfront. If they don’t think this particular conflict of interest is something you need to know about, you might well question what else they are not telling you.

 

© 2012 – 2015, Carole. All rights reserved.

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