Financial guarantees needed to protect hospitals

• Source: Global Times
• [09:06 October 23 2009]
• Comments

In the US, for example, a simple social security number can provide reliable information for a patient's credit history and help reduce the risk of defaulting. Most Western patients either have medical insurance to pay for expensive emergency care, or live in countries with universal healthcare. Even when they cannot afford the medical bills, there are other ways to compensate the hospital's loss, such as government funds and charity payments.However, in China, there is no such system to control the risks.

In cases of emergency care for severe illness or the longterm treatment of chronic diseases, defaulting is likely to happen. In these cases, hospitals have few ways to go after the patients rather than going through legal procedures. Most of the time, they have to bear the high cost of treatment.

Hospitals are likely to additionally ask patients to leave their identity cards, medical insurance numbers, or even personal bankbooks to ensure their ability to pay the fees. But even these items can't provide enough guarantees to hospitals to protect their interests.

For hospitals, fi nancial pressures are their major consideration in practicing "treatment first and settlement later."

Due to limited State fi nancial support in public hospitals, stringent restrictions on the prices of medical services and products, and the improper distribution of medical resources, a considerable amount of hospitals are facing a series of pressures. These include increasing clinic burden and operational costs, sluggish growth of investment and income, and a liquidity crunch.

Thus, implementing "treatment first and settlement later" widely without introducing an effective patient credit system and a hospital risk control system will inevitably have a negative impact on hospitals' financial condition, daily operation and management.

How to prevent defaulting on medical bills and avoid financial risks will be the key problems that hospitals should consider in practicing the new  system.

Therefore, we must develop a medical service management and payment system run by a third party.

The system, based on the existing medical insurance systems and personal credit management measures, will provide service on payment methods, reasonable assessment and risk control. The service will, in turn, dispel doubts and contradictions between doctors and patients, helping practice "treatment first and settlement later"e. ectively.

In the healthcare reform, both doctors' professional ethics and the lack of morality and weak credit in China's society should be considered.

In a society of increasing mobility, if there was no rational credit system to strengthen patients' consciousness of paying bills and to protect hospitals' reasonable interests, the humanitarian ideal of "treatment first and settlement later" will only remain a pilot program.

The author is director of a medical information center in Shanghai