Consumer Debt, Health Care and You

The International Herald Tribune reports today about a growing trend in the U.S. "Patients in U.S. turn to no-interest loans for health care." Most procedures financed are elective or not covered by insurance (vision procedures and dental). But the article notes possibilities for expanding the practice as consumers face more and higher out of pocket costs within insurance plans.

Capital One and Citigroup and the CareCredit unit of General Electric offer revolving credit accounts and special no-interest plans (the sort you might tap for a dishwasher) with steep penalties for missed payments or default.

As you might expect, lenders and insurers pitch this market in terms of offering a needed service to society:

'"There's a place for credit solutions that are integrated within traditional health insurance programs, when an individual hits that out-of-pocket expense,' said Tom Beauregard, a senior vice president at UnitedHealthcare. 'The key is to make it voluntary, to make it simple and to offer favorable credit terms.'"(from the IHT article)

Here are some problems with this approach:

1. Credit increases the cost of doing business.
2. Credit reduces the profit per transaction. According to the article, dentists might receive only 75% of the bill in the case of clients with poor credit who default.
3. Growth of credit in the health care industry skews the understanding of medical care further toward a business model.
4. With appallingly low levels of financial literacy (as demonstrated by the subprime fiasco) possibilities for fraud or default are obvious. CareCredit reports that 80% of the interest free loans are paid on time. That means 20% incur penalties (remember, a mortgage default rate of .5% shakes the industry from top to bottom).

Do we really want to further financialize our lives?

Granholm Featured in WaPo OpEd Column Today

See E.J. Dionne Jr.--Who's for Big Government

His point is that even though the big government versus small government rhetoric abounds at the state level, conservatives are willing to support big government programs if their constituents will benefit.

"Could there be any more of a big-government endeavor than the invasion of Iraq, pursued by a president from the party of small government? Do the domestic spying programs have anything to do with a small-government agenda?"

Well, no.

And there is always the farm bill.

"In the meantime, the coalition against excessive government entanglement in the farm economy crisscrossed all ideological boundaries, running from Rep. Jeff Flake (R-Ariz.) to Sen. Richard Lugar (R-Ind.) to Rep. Ron Kind (D-Wis.).

Kind's amendment to reform the farm program attracted an admirable band of supporters, including some of the most liberal and most conservative members of the House. Yet it was overwhelmingly voted down because a slew of farm-state conservatives uncharacteristically joined the Democratic leadership in opposing it.

Rep. Robert Goodlatte (R-Va.) said Kind's proposal "rips out the safety net for American farmers and ranchers." At last: a safety net many conservatives love. Democratic leaders, for their part, opposed Kind because they wanted an electoral safety net for their vulnerable members from farming districts."

Interesting, common ground among the very liberal and the very conservative.

Finally, to Granholm. On the issue of government provided health care, Granholm says that business leaders recognize such programs give competitive advantage to manufacturers in other countries.

"Shrewd industrialists who love the free-enterprise system have noticed how 'countries that have big-government health care' are at a competitive advantage, Granholm said in a telephone interview, and 'they're asking government to help them out.'"

Granholm also speaks to changing sentencing guidelines, as a way to help with budget woes.

Sadly, our partisan bickering and posturing over the budget and taxes has attracted national attention.

"Posturing on taxes will probably continue until very close to Michigan's fall budget deadline. But because the trade-offs between taxes and spending are clear, politicians can't afford to be too rhetorical."

All eyes are on you, Michigan legislature.

Finally, Granholm advocates investing in people through education and healthcare for the sake of our economy.

"Granholm argues that the United States is 'never going to be the cheapest place to do business,' in part because of its high labor and environmental standards relative to many of the emerging economies. She suggests that improving the country's competitive position will require 'investing in education, higher education and health care.'"

Right, we have standards for goodness sake! Let's not abandon standards that support a clean environment or educated citizens or fairly compensated workers. Sure, ditching those costly policies and regulations has seduced vast numbers of manufacturers to move abroad. After all, shareholders want better returns on investment and nobody likes a bear market.

Making commitments to invest in people will require a longterm perspective--a stretch for those focused on quarterly profits or election cycles.

Canadians Get Neonatal Care in Michigan, Montana, Washington, and New York

What would Michael Moore say? Sometimes the Canadian health care system can't meet the needs of its patients. Still the government finds a way to provide the needed care. The Globe and Mail reports that "women with high-risk pregnancies in three provinces have been sent at taxpayers' expense to give birth in the United States, where fragile infants spend weeks to months in hospital neonatal intensive-care units."

Pregnant women from British Columbia, Ontario, and Alberta have been cared for in four states, including Michigan. The practice stems from a nurse shortage, increase in premature births and an overburdened health care system in Canada. The women receiving US care typically begin labor before 32 weeks gestation. Babies that young need the highest level of neonatal care, which Canadian hospitals do provide. But when neonatal units are filled to capacity, women are sent by air ambulance to the US.

Once the babies are born, they stay here for extended periods receiving care in US hospitals. This creates a burden on the mothers who must find housing at their own expense in the US or commute across the border to be with their infants.

The babies are also entitled to US citizenship.

The Canadian priority seems to be providing care for its citizens. This situation points up weaknesses in the current Canadian system and may even be used to bolster arguments for privatization. Or, cooler heads may see it as a chance to improve a system that works fairly well. We in the US should not feel smug that our resources are being utilized by Canadians. On the contrary, we might learn from their commitment to public health and universal health care.