In what is believed to be the first program of its kind in the country, Huntington National Bank of Columbus, Ohio, is offering no-interest, no-fee loans to hospital patients to cover the unpaid costs of their care.
The Huntington Patient Payment Plan also lets hospitals reduce the overhead and administrative costs of handling patients' outstanding health care balances, the bank said. Hospitals pay a fee to the bank and refer patients to it.
Huntington will lend $400 to $5,000 to patients who have no insurance or big deductibles or who owe a lot even after insurance claims have been paid. Monthly payments can be as low as $25.
The bank does not expect to earn substantial revenue from the program but will receive Community Reinvestment Act credit if the hspital is in a low-income area.
Hospitals and other medical care providers have traditionally referred customers with unpaid balances to finance companies. But hospitals told Huntington they don't like to do this, said bank spokeswoman Natalie Kompa. "They knew the patients would be paying interest and fees on those loans at a time when they could least afford it."
Under the bank's plan, hospitals do some prescreening - assembling pertinent information such as the patient's job and income level - and then forward an application. "We take a look at it and can give same-day approval," Ms. Kompa said.
She said Huntington believes its program is the first of its kind.
"We had our attorneys do a pretty exhaustive search so we could copyright the marketing materials and the concept," she said. "They couldn't find anything that looked similar, or even close."
Small banks somewhere may be doing the same sort of thing locally, she said, "but we can't find them."
The program is being piloted at two Ohio hospitals, Samaritan Hospital in Ashland and Medical Center Hospital in Chillicothe. Plans are for a rollout later this year to hospitals in all Huntington markets.
Columbus-based Huntington Bancshares, with $19.4 billion of assets, operates subsidiaries in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia.
The product originated from Huntington's Community Centered Banking program, which offers banking services to low- and moderate-income consumers through community resources such as hospitals and churches.
"We started talking with hospitals, hoping to get them interested" in the community banking program, Ms. Kompa said. "They said, 'You know, what you can really do for us is get us out of the banking business.'"