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Friday, January 18, 2008

Medical FICO?

I hope everyone will indulge the peculiar interests of a mortgage broker with this story...

The folks who invented the credit score for lenders are hard at work developing a similar tool for hospitals and other health care providers.

The project, dubbed “MedFICO” in some early press reports, will aid hospitals in assessing a patient’s ability to pay their medical bills. But privacy advocates are worried that the notorious errors that have caused frequent criticism of the credit system will also cause trouble with any attempt to create a health-related risk score. They also fear that a low score might impact the quality of the health care that patients receive.

Fair Issac Corp., developer of the FICO credit score, is one of several investors in Healthcare Analytics, the Massachusetts start-up that is developing the hospital risk tool. Another investor is Tenet Healthcare Corp, one of the nation's largest hospital operators. Stephen Farber, who resigned as chief financial officer of Tenet in 2004, is the CEO of HealthcareAnalytics.

The article goes onto list some concerns most notably those of privacy advocates. I am not so impressed by the issue of privacy as regards to this matter. I don't think someone's payment history with a hospital is an issue of privacy. I don't believe that your being late with a medical payment is something you should expect privacy for.

The other problem brought up was this,

Dixon, however, was skeptical. While she didn't suspect the so-called MedFICO would be used to turn patients away in emergency situations, she said it could impact patients during follow-up visits or other non-emergency situations.

"If you had a poor score, you could be denied a hospital stay, for example," she said.

Obviously, if patients are deemed to be bad credit risks and that is used as a decision toward their care, that is a pandora's box probably left closed. It is important to note that this product is still in development and the company spokesman pointed out in the article that any criticism and analyses is premature.

As a true blue capitalist, I support any entrepeneur in their endeavor to bring a new product to the market. That said, what I don't understand is why this is necessary. The current credit reports already serve such a purpose. A patient's ability to pay a medical bill should be determined by examing the current credit reports.

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