“Mortgages” for Medical Care: A Good Idea?

OrthoBuzz occasionally receives posts from guest bloggers. This guest post comes from Chad Krueger, MD, in response to a report about healthcare loans that aired recently on Boston radio station WBUR.

How much is life-altering or life-saving treatment worth? People and the companies that insure their health are likely to have different answers to this difficult question. The same person may even have different answers at different points in his or her life. Because our ability to care for patients sometimes outpaces individual and societal economic resources, additional hypothetical dilemmas arise: Would you cash in everything you owned to help your child overcome an illness? What if you had two children with the same life-threatening condition but only had enough money for one of them to get treatment?

On the surface, the idea of commercial lenders granting mortgage-like loans to either individuals or insurance companies to pay for expensive treatments sounds reasonable. Such loans would spread out payments over five to ten years and, under a plan broached by Boston oncologist David Weinstock and MIT finance professor Andrew Lo, would protect borrowers from having to pay for treatments that do not work.

The example in the WBUR story focused on a very expensive hepatitis-C medication, but it begs many additional questions: For example, how would a lender decide whether a loan application for a specific treatment would be too risky? The WBUR story included comments by Boston College Law School professor Patricia McCoy, who noted that the home-mortgage market collapsed in 2008 largely because both lenders and borrowers were unable—or unwilling—to properly determine risk. How would that borrower-lender risk-assessment psychology play out in life-or-death healthcare situations, especially when the annual percentage rates for some of the healthcare credit cards currently available can exceed 25%?

Even if they come to pass, healthcare “mortgages” will not solve the underlying problem of having more medical and surgical options available than we, as a society, have the resources to pay for. Healthcare loans may help some people get the care they need, but ultimately they would do nothing to reduce the cost of care. Still, if we continue working hard to reduce healthcare costs, I think discussions about new and interesting ways to pay for healthcare should be encouraged.

Society may never be able to answer the question of how many dollars a certain treatment is worth, but questions about the costs (economic and emotional) of not being treated can be even harder to answer.

Chad Krueger, MD is a military orthopaedic surgeon at Womack Army Medical Center in Fort Bragg, NC.

For an in-depth look at healthcare loans, read this article in Science Translational Medicine.

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