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Selling Dental Services Like Chevrolets

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Mailers from a New York City dentist piqued my interest last week.'  The dentist was offering a $127 special for an initial visit including a comprehensive oral evaluation, full-mouth X-rays and a personal consultation. The mailer also noted that the while the practice accepted credit cards, '0% financing' was also 'available through CareCredit.'' '  Zero percent financing is the same come-on that car manufacturers have used for years to entice you to buy Chevys and Toyotas.

Lindy Washburn, a reporter for the Bergen Record, recently produced a fine expose about doctors and dentists who pressure patients to sign up for credit cards to pay for their care, recommend more expensive treatments than necessary and sometimes don't complete the treatments after they are paid by the credit card company.'  Washburn found that patients can end up paying much more than they bargained for.'  For example, one patient signed an agreement with the understanding that the loan would be activated only if she proceeded with treatment.'  Instead, the patient got stuck with a $6000 loan.

Dental care is expensive, and most people don't have insurance that covers the cost.'  Some of the biggest names in banking ' like JPMorgan Chase and Capital One ' have found a niche market for these single-purpose credit cards or lines of credit to be used for health care.'  GE Capital issues the CareCredit card, which tells prospective customers on its website that the card is 'the credit card just for your health and beauty needs.''  Site visitors also learn that the card 'removes the accounts receivable responsibilities from the doctor and allows them to focus on recommending and providing the best care to their patients.''  In other words, providers get paid right away, often before treatment is completed.

Since these are credit transactions, and good consumers should always be wary of credit deals and the fine print they come with, I stopped by the dental office to see if I could obtain a copy of their agreement.'  I told the receptionist I had received one of the practice's mailings and wanted to know more.'  He readily gave me one and said that obtaining credit was pretty easy: Once the dentist determined the extent of the treatment necessary, they'd work out a billing plan and I could apply for the CareCredit card.'  'Approval," he said, "was instantaneous.''  That did sound like a good deal, especially for anyone howling in pain with a sore tooth.

If getting the credit approval was simple, reading the contract was not.'  It was tricky and difficult to figure out what I was getting. For example, the contract described two promotional options.'  One option called for no interest to be paid if the account was paid in full within six, twelve or 18 months.'  It came with the caveat that not all doctors offer this option, but, more importantly, it noted that 'interest will be charged to your account from the purchase date if the promotional purchase is not paid in full within the promotional period, or if you make a late payment.'

The second payment option called for a fixed monthy payment schedule with a 14.90 annual percentage rate. ' The agreement disclosed that both options applied to 'purchases made with your CareCredit credit card account.''  However, another section of the document labeled 'credit card account agreement' noted a 26.99 APR.'  To the casual reader or patient, it's not clear how the promotional options link to the credit card agreement the consumer is signing.

What consumer protections patients have under various federal and state laws depend on particulars of agreements, so I showed the contract to one New York consumer credit expert who advised: 'Do not enter into these agreements.'  They are nothing but trouble.''  One woman Washburn interviewed who had signed an application while in pain at her practitioner's office put it a different way:'  'Even though you're in pain, you just ought to walk out the door and take some more Ibuprofen.'

While special offers and low interest rates have worked well for many car buyers, having special financing to string out health care costs is less likely to be a good value.'  In order for health care 'deals' and offers to work for consumers, patients first have to have access to a range of treatment costs from various providers, and then, if necessary, make choices about payment plans.'  Otherwise, it is all too easy to pay too much and get too little in return.

More Blog Posts by Trudy Lieberman

author bio

Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website, CJR.org, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.


Tags for this article:
Oral Health   Trudy Lieberman   Find Good Health Care   Pay for your Health Care   Make Good Treatment Decisions  


Comments on this post
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Wendy Delmater says
July 3, 2012 at 2:05 PM

I recently wrote the following post on my blog, The Mistress of Singularities, about GE Capitolâ??s CareCredit card.

GE Capitol Care Credit Scam

A few weeks back I financed a $6,500 pair of hearing aids via GE Capital's Care Credit. The audiologist assured me, and so did the "Welcome Package" for the loan, that there would be no interest if the full amount was paid in the stated time (two years). Hm. Would the $155 minimum payment pay it off in 2 years?

I ran the numbers: their minimum payment would cover a little over half the amount in two years, after which the accrued interest would be added at 14%. According to the fine print this interest was calculated on a 14-day cycle , which meant it would multiply rapidly. If I paid the minimum I would, literally, never pay it off! So I pulled some money out of my IRA, since doing that was surely cheaper than the interest would be on this monster loan.

When I got my first bill yesterday, there was already interest charged. What the heck? When I called to complain about the interest they blamed it on my audiologist, saying, "He must have chosen the wrong package," and I was told should take it up with him. (Wrong - I have the paper I signed with the rates, and Care Credit's welcome packet - which both say no interest if paid in full in two years. But I did not mention these facts.)

Imagine their shock when I calmly told them I was paying off the loan in full and closing the account. All of the sudden the bogus interest charges were "waived" and the $15 pay-over-the-phone charge was waived. I have a confirmation number, and a letter closing the account paid-in-full had better be coming, as promised. I also have the original welcome packet, the agreement I signed at the audiologist's both of which GE Capital did not honor, and the first bill with the bogus interest.

Two copies of each are going to the SC attorney general tomorrow. For tonight I will content myself with posting a complaint on The Ripoff Report online, and blogging and tweeting this. I think Care Credit preying on old and sick is unconscionable and intend to make sure they get as little business as possible.

http://safewrite.livejournal.com/531760.html?view=1135664#t1135664

Dentist says
February 28, 2013 at 2:41 AM

Wow, great article, I really appreciate your thought process and having it explained properly, thank you!

Dentist


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March 16, 2013 at 1:25 AM

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