Suppose you had a business. A business that provided a much needed but expensive service. A business that can literally change the lives of people.
You strategically place your business in an area where you can expect optimum traffic. You are required by law to offer your services to anyone who needs them regardless of their ability to pay.
Some people who come in the door of your business will have unlimited lines of credit to pay their bill. Others will have only what is in their pocket.
Those with lines of credit will pay their bills at 50% of your going rate.
Those without a line of credit will only pay about 8 - 12% of billed charges.
Have you figured it out yet? Who am I?
I am a hospital.
Bad debts are increasingly driving a little-discussed vicious circle. Hospitals seeing more debt from insured patients can react by pushing insurers to help them offset it. This in turn can push insurers to charge higher premiums to employers, which can force employers to place more of the risk of healthcare costs on to their employees.
We are a nation who is overweight, over-stressed and have demonstrated an ability to take on more debt and save less than any prior generation.
We are also more lax in accepting personal responsibility for our debts.
When is this cycle going to stop?