General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPlans for forgiveness of hospital debt
In an ideal world, collecting debts would be as simple as asking debtors to pay their obligations when they are able to. But in reality most businesses have found that they need to obtain other assurances, such as collateral or the option to shut off services to a delinquent payer. Otherwise it is too easy for debtors to claim hardship and walk away without paying.
On the other hand, many families and other debtors do experience genuine hardship. In those cases it can be compassionate and even efficient to at least partly forgive the debts of people who have fallen on hard times. Many economists see loan defaults as (sometimes) an efficiency-enhancing form of risk-sharing.
One approach would be for lenders to develop and disclose a ?forgiveness formula? that would clearly define ?hard times? and indicate precisely what kind of forgiveness is possible. The advantage of forgiveness formulas is that distressed borrowers can be certain where they stand with the lender and can readily evaluate whether they were treated "fairly".
Hospitals are also known to partly forgive medical debts incurred by the uninsured, while they make no accommodation for many others. Some states require hospitals to explain in writing how they go about discounting charges for hardship patients, but you might guess that hospitals worry that patients will game those calculations in order to pay less.
NYT Reader Response:by Don McCanne of PNHP
A forgiveness formula for hospitals?
Other nations have been successful in providing health care to everyone at a cost much below that of our dysfunctional system here in the United States. Their programs often have first dollar coverage; therefore medical debt is almost unheard of - certainly a minuscule fraction of what we have here.
Instead of establishing strategies for forgiveness in the future, wouldn't it be more logical to establish a health care financing system in which debt forgiveness would never need to be a consideration?
pipoman
(16,038 posts)Insurance companies negotiate with hospitals for special pricing. This special pricing is not passed on to the uninsured. I believe that Hospitals and doctors should not be allowed to charge any uninsured or high deductible person more than they charge the the insurance company or government agency with the lowest reimbursement for the same service..
badtoworse
(5,957 posts)The risk of not being paid for services is much higher with an uninsured person than with an insurance company reimbursement. I would expect that increased risk to be reflected in the price. Given that the risk is real and has to be borne somewhere - are you saying that hospitals should just eat it? If not, how should that rsik be allocated?
We don't have singe payer and the issue of whether or not we should is a separate matter.
pipoman
(16,038 posts)you seem to be saying that only the uninsured should pay for uninsured non-payers..I believe all billing should be done equally and nonpayers should be recouped from all paying accounts if they must. One price for the same service. Maybe because the insurance companies are such good customers the hospitals should charge them less than the cost to provide and make that difference up on the uninsured too, eh?
badtoworse
(5,957 posts)I just asked how the risk of non-payment should be allocated. It seems reasonable to roll it in as a cost of doing business and allocate it across the board.
As I think about, there is more involved than risk allocation. Volume pricing also comes into play. Most businesses give high volume customers a better price and I don't see a problem with that.
eridani
(51,907 posts)Realistically, this will have to happen state by state
pipoman
(16,038 posts)and we have our national healthcare reform law...if it were going to change, it would have to change then..I think we are beyond changing anything much for at least a decade. Pressure on state lawmakers to at least equalize medical costs would be good..