If you think that only banks and other traditional lenders get to gouge consumers with high interest rate loans, you're obviously behind on the evolution of American finance.
These days, just about any service provider can offer loans with what used to be criminally high interest rates. And that includes doctors and dentists, as the New York Times reports today.
In dentists’ and doctors’ offices, hearing aid centers and pain clinics, American health care is forging a lucrative alliance with American finance. A growing number of health care professionals are urging patients to pay for treatment not covered by their insurance plans with credit cards and lines of credit that can be arranged quickly in the provider’s office. The cards and loans, which were first marketed about a decade ago for cosmetic surgery and other elective procedures, are now proliferating among older Americans, who often face large out-of-pocket expenses for basic care that is not covered by Medicare or private insurance.
The ability of an ordinary healthcare provider to become a lender -- charging annual interest rates up to 33 percent, as the Times notes -- is testament to advances in the architecture of finance. Online systems allow nearly any business to easily collect financial information from a consumer, process a loan application, and set up a line of credit.
Of course, car dealerships and large retailers long ago discovered the joys of lending. Now, though, even a solo dentist practitioner can easily get in on the action.
That fact underlines the challenges of financial regulation. Protecting consumers is not just about regulating traditional lenders. It's about regulating anyone with an Internet connection.
Professional associations should be an important line of defense here for consumers. The American Medical Association and American Dental Association don't currently have ethical guidelines on lending. They should.
Among other things, ensaring a patient in a loan with a 33 percent interest rate would certainly qualify as violating the Hippocratic Oath to "first do no harm."