BusinessReport.com

With more people accepting or opting for higher deductibles to triage hemorrhaging health insurance premiums, Drake Bellanger has found himself in the interest-free microloan business.

“It makes the difference for some people getting care,” says the Baton Rouge general surgeon, who provides loans averaging $600 to $1,000 paid to his office in advance of the surgical procedure. A patient can even arrange to have it paid with automatic checking withdrawals.

When the procedure warrants a larger amount—Bellanger also performs weight-loss surgery that is not typically covered by a third-party insurer—those patients are routed to financing options with area banks such as Capital One that finance certain health care procedures.

As health care costs continue to rise and big lenders pursue new growth areas, this type of medical financing has become one of the fastest-growing segments of consumer credit, led by lending giants like Capital One and Citigroup and the CareCredit unit of General Electric.

Higher deductibles are a symptom of more people opting for health savings accounts, which Bellanger says has rung in the new consumer-directed buzz term. Under these plans, patients are the consumers, instead of insurance companies, because they’re paying more of their medical care costs. But patients—not insurance companies—make the call on where, how and if they get medical care. Bellanger has one of these plans, covering preventative care, which he strongly advocates should be in any plan.

“The insurance companies want you to shop for your treatments,” he says. “If all parties are shielded from the cost, there’s a tendency to go to the more expensive version. Part of the problem is to try to find out how to educate people to make better medical decisions—that’s a double-edged sword.”

With rising medical costs, doctors and patients are finding creative ways to bridge cost gaps in coverage and care.

“You need to separate your needs from your wants,” Bellanger says. “If you want something you should probably have to pay out of pocket for it, while your needs should be met.”

Bellanger, who also is incoming president of the East Baton Rouge Parish Medical Society, says costs are not rising on his end.

“It’s a misnomer that whenever insurers raise rates it’s because of rising medical costs, but that that’s what the public assumes and it’s aggravating for doctors,” he says. “They are paying out more money … because of utilization issues such as more treatments that result in more drugs, etc. … and medical care is more costly but there is so much more that goes into it.”

Bellanger says doctors and hospitals are not raising their prices despite public perception that they’re behind rising insurance rates.

To help control costs, doctors are using physician extenders (physician assistants and nurse practitioners) who address routine and preventative care allowing the doctor to deal with sicker patients. While this has worked well, Bellanger says even these cost-efficient measures are increasingly being absorbed by a growing number of uninsured patients. An estimated 5% to 10% of a doctor’s time is spent on them, which basically equates to free care.

At one time, doctors on hospital call could balance the cost of treating a relative few uninsured patients who sought care, but he says their increasing number over the past 10 years has pushed the situation to the critical point.

“At some point, we have a larger growing section of uninsureds getting an expensive level of care,” he says. “Do you provide universal health coverage or a basic safety net?”

At Lane Regional Medical Center in Zachary, Julie Madere, director of marketing and community relations, says shifting conditions in health plans have them offering prepay options to assist patients.

“We’re seeing a shift in the health care plan with lower premiums but higher deductibles in insurance, and it’s fairly recent,” Madere says. “It seems to be the trend.”

Lane patients unable to pay their full bill upfront can use the center’s prepay options to cover a co-payment or deductible before admission. There is no interest or charges for the service. For larger amounts, it also has a relationship with Capital One to set up a line of credit with interest for the patient.

With some of his surgeries costing $15,000 to $20,000, plastic surgeon Anthony Stephens offers low-interest payment options through financial institutions endorsed by the American Society of Plastic Surgeons.

“My own personal feeling is if you don’t have the money for this, don’t do it,” says Stephens, who previously worked as a general surgeon at Charity Hospital in New Orleans. “We’re not trying to attract a patient who doesn’t have the money to do this.”

Stephens says doctors feel they now have to offer financing, and he predicts more doctors will do more work where they can be paid upfront.

“I see it with my colleagues, especially the pediatric surgeons, as their reimbursements continue to drop,” he says. “Our state is a very poor state, so the people who come into the ERs are mostly uninsured so they’re being cared for with no reimbursement. It’s a fact about what’s coming down the pike.”

Dentists Nelson Daly and Ann Uzee have successfully utilized a service called CareCredit to help patients afford dental care, Office Manager Melissa Braud says.

CareCredit is based on a patient’s credit approval and offers some interest-free promotions if they pay on time. There are varying options available that range from a $300 to $500 loan interest free for three months to $1,000 interest free for one year. There are no activation fees, and patients can qualify for the credit line in minutes at the office or can apply themselves at the CareCredit Web site and have the approval faxed to their office.

Cristy Williams, vice president of communications with GE Money’s CareCredit, says they focus on elective procedures and 60% of their business in dentistry. They also have clients in Lasik eye surgery, veterinary medicine and cosmetic procedures. CareCredit bills itself as the nation’s leading patient financing program, and says it has helped more than six million cardholders in the past 20 years.

“We don’t make the market, we follow it,” Williams says. “The line of credit is flexible enough like a credit card for smaller amounts. Using credit cards arose in the last 15 years and is relatively new for people paying for care, but most times doctors are just trying to offer patients payment options.”