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Healthcare Quote of the Day, by Dr. Don McCanne

The Wall Street Journal

June 3, 2008

Hospitals Put Patients' Debt Up for Auction

By Sarah Rubenstein

In a move that consumer groups say could increase pressure on people with unpaid medical bills, some hospitals are trying out a new tactic to recoup patients' debts: They're auctioning the debt online.

Hospitals have long relied on outside collection agencies to go after debtors. Under traditional arrangements, these agencies receive a percentage of any money they get from a debtor; the more they collect, the more they earn.

Now, some of the same collection agencies, as well as other firms that purchase debt outright, have begun participating as bidders in online auctions, in which they buy the debt or provide guaranteed payments to hospitals for access to the unpaid accounts. Some experts say this gives them more reason to aggressively pursue patients in arrears. Auctions can drive up the amount paid for debt, meaning a collector must recoup more money from patients to cover its initial investment and turn a profit. And the winning bidders often get to keep all the money they collect on the auctioned debt.

Many of the auctions of hospital debt have been done through Web site ARxChange.com -- shorthand for "accounts receivable exchange" -- owned by TriCap Technology Group. Another site is medipent.com, run by Medipent LLC.

"The hospital is an institution in the community, has a reputation, in many cases has a nonprofit mission to uphold," says Anthony Wright, executive director of the consumer-advocacy coalition Health Access California. "Once it goes to collections, that starts a process that can get a lot more antagonistic, a lot more aggressive, and a lot more damaging to a family's credit history and financial future."

Comment:  By far, the highest per capita health care spending in the world... the money is already there... and, yet, we are unique amongst industrialized nations in forcing into debt individuals who have the misfortune of becoming ill or injured.

Of all of the problems we face, this is one of the simplest. We do not need more money. We merely need to reform our system of financing health care.

So what do we do? We continue to expand policies that make all of the numbers worse - more uninsured, more underinsured, more medical debt, greater impairment of access, greater administrative waste... while we continue to support the multitude of money-movers, trading off the health and financial security of patients.

Today's message is particularly disturbing. Medical debt is a horrendous problem. Instead of trying to fix the financing system so that medical debt is prevented, we add yet another administrative layer that further burdens those with medical debt: the auctioneers who sell medical debt to the highest bidding collection agencies!

Have we no shame?