Consumer advocacy groups are crying foul as more and more hospitals are using our credit reports to decide whether or not they want to do business with us. They are added to the growing list of users of our credit reports, including banks, credit card companies, telephone and utility companies, and insurance companies.
At first, it might seem unfair for hospitals to look at your credit history before treating you. After all, sometimes there are emergencies, right? Well the hospitals aren't using credit reports in emergency situations. They're using it in connection with planned procedures and hospital stays, and they say it's necessary because they need patients to pay for the cost of their care. They're also using it to check credit after treatment to see how likely it is that they'll be able to collect your unpaid balance.
Hospitals are businesses, aren't they? And they do deserve to be compensated for their services, don't they? I really don't blame hospitals for choosing to work with those who are more likely to pay their bills. There are too many people skipping out on their healthcare bills, and it's not because they can't pay for their care. It's because many of them choose not to pay, even a small amount each month.
Administrators say it's necessary to check credit to see who they should pursue harder for payment of medical bills, and also to see who is legitimately eligible for financial assistance or charity programs. Each year hospitals lose hundreds of millions of dollars to unpaid medical bills.
Having seen clients and friends "ditch out" on medical costs makes me think this is an unfortunate, but necessary, process. Consumer groups admit that people typically think of medical care as "discretionary" spending... something that is optional for them to pay. I don't think that's fair to those of us who pay our doctor bills and are charged more to make up for those who don't pay.
Plan on seeing this area of credit checks only grow in the future. The credit reporting agencies are even working on developing credit scores specifically for medical purposes. As hospitals work to limit their losses from unpaid medical bills, your credit history is more and more likely to be closely scrutinized by them.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
Another use for your credit report: Hospital bills