what is a fair way to reconcile debt? a patient owes my practice a few thousand dollars. he arranged to pay it off in installments of $100/mo citing need. i saw him getting out of his new escalade in the parking lot and i now know he is a member of the expensive local country club. is that fair to me? i thought i was helping out a needy gentleman. now when others ask for payment plans, i am tempted to ask about their lifestyles before agreeing to them.
Anonymous
I suggest you treat requests for unsecured credit with as much care as bank wo . . . with even more care than a bank would.
Patients who are asking for payment terms for services rendered are asking for loans. You are fronting the money for your overhead and your time. You are risking not getting paid. They, on the other hand, have your service, which cannot be repossessed if they default. So imputed interest is deserved: I recommend no discounts for those who don’t pay in full when services are rendered.
Now as to timing. Never let the debtor decide for you what they are willing to pay. You really should insist on getting as much of the charge up front as possible. Half or better at least as a down payment. If you are going to allow payments, insist that they be as large and as prompt as possible to satisfy the debt. Getting the payment in full in two installments is better than three, payment over two weeks better than one month. Never let payments stretch for months if at all possible. And get the patient to sign an agreement detailing exactly when and how payments are to be made. Have the agreement say explicitly that their payment is due in cash to be paid in person by a specific day and that they are not entitled to be “billed” for their payment. Also make clear that their payment plan is not a revolving credit account and they cannot add other charges later to the principal amount. I recommend that you stipulate that late payment is a violation that revokes the payment agreement and that for one occurrence, the entire balance is subject to immediate collection.
Of course, the better approach is to avoid becoming a consumer credit lender in the first place: when people come asking for terms, you should inquire whether they have any assets for which they could get collateralized lending (get something out of those jet ski’s in the off season). If they have a house, can they get a home equity loan? Placing their request among the terms used for other kinds of consumer transactions gives your service at least as much consideration as any other expense for which people borrow on assets. It may even be worthwhile suggesting that patients who need lots of ongoing care for which they cannot pay go to a medical school for care in the resident’s clinic. I think it is morally indefensible to expect to have other’s labor without payment, and offering availability to a teaching enterprise at least recognizes the value of contributing something, even at an inconvenience, that recognizes other’s work has value.
As to the case where the patient demanded easy terms on pleading poverty, then drove off in the Cadillac Escalade to the country club, that is someone worth doing a credit check on. Pleading poverty and demanding terms when you really do have money isn’t “clever negotiating,” it is fraud. People who do things like that deserve to find themselves being sued for fraud and misrepresentation.
Anonymous
As soon as someone is admitted to a hospital, that hospital becomes a major creditor, perhaps the biggest creditor that person has, and they have more legitimate need for a credit assessment than 90% of the enterprises that look at a person’s credit score.
For someone to put the hospital in that position by seeking services there, and then deny that information, is for them to demand a very one-sided relationship, and betrays a sense of entitlement. “You have to trust me to pay you but I don’t trust you to assess how trustworthy I am”.
I have found that there is no correlation between the claim of indigency and the actual ability to pay. It may be due to an inability to pay, or due to a simple failure to put an high enough priority on it.
For some, the priority is a last consideration after all other wants and desires are fullfilled. For others it is as long as it fits in the budget. Some will rework the budget and pull out some unnecessary items to pay the doc. Some people will deny other bills to pay the doc. Some will seek a second job or higher paying job. Others feel entitled to have all the benefits of a modern industrial economy while working 20 hours a week at a low-paying feel-good job that leaves plenty of time for developing their spiritual side.
