This is another example of how the health care finance system is beginning to cannibalize itself.
From the Wall Street Journal
Hospitals Put Patients’ Debt Up for Auction
In a move that consumer groups say could increase pressure on people with unpaid medical bills, some hospitals are trying out a new tactic to recoup patients’ debts: They’re auctioning the debt online.
Hospitals have long relied on outside collection agencies to go after debtors. Under traditional arrangements, these agencies receive a percentage of any money they get from a debtor; the more they collect, the more they earn.
In a key paragraph the impact comes out: Winning bidders may “have to work harder” to make a profit from auctioned debt, says Michael Klozotsky, an analyst at Kaulkin Ginsberg Co., a collections-industry strategic-advice company. “Working harder means sometimes using strategies that are more aggressive.”
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