Bartering For Health Care On The Rise
Cash, check or a cord of wood for that doctor visit? As health care costs climb, old-fashioned bartering has seen brisk growth since the economy soured.
Hillsborough, N.J.-resident Robert Josefs traded his Web site designing skills for nearly $1,000 in dental work last year when he had no insurance, and many other patients are learning that health care debts don't always have to be settled with sometimes-precious cash.
Health care bartering has risen dramatically since the recession began, as people lose their health insurance and consumer spending drops, said Allen Zimmelman, a spokesman for the Bellevue, Wash.-based trade exchange ITEX Corp.
ITEX Corp. has seen its health care business rise 45 percent over the past year. The exchange, which has 24,000 members, now fosters about $1 million a month in health care bartering.
The Web site Craigslist says overall bartering posts have more than doubled over the past year as the recession took hold.
People who barter for health care say the practice allows them to stretch their resources or receive care they couldn't afford. But bartering can be tricky, and not every health care provider will consider it.
Some doctors are open to bartering directly with patients. Others do their trading through an exchange like ITEX.
These exchanges allow people to trade goods and services with other exchange members generally for barter dollars. They can then use those dollars to pay a health care provider who also belongs to the exchange.
There are about 400 exchanges in the United States, Zimmelman said. The Web site barternews.com offers state-by-state listings.
These exchanges charge membership and transaction fees, and they also help members deal with tax implications of bartering. Hotel rooms, restaurant meals and services like plumbing are among the more popular items traded.
Direct bartering depends on the patient having a service or good the doctor needs. That's a wide range at The Barter Clinic on the edge of the Blue Ridge Mountains in Floyd, Va.
Johanna Nichols barters produce from her organic vegetable farm with Susan Osborne, an osteopathic physician. Nichols, a Floyd resident, said she barters less than $600 in care every growing season to help offset a high-deductible insurance plan that covers her family.
"We still are paying our health insurance premiums every month," she said. "It's just kind of an extra way to stretch our dollars."
Osborne's Barter Clinic also accepts clothing, firewood and has counted violin lessons and child care among other unorthodox forms of payment. About 10 percent of her patients pay by alternative means from time to time. People will suggest a trade, and her office does research to figure the local prices for the proposed barter before deciding whether to accept it.
Josefs, the Web site designer, found quick acceptance for his services. A dentist about an hour from his New Jersey home responded a few days after he posted a notice last year on Craigslist, the popular online classifieds site. He had chipped a dental veneer, but he had no insurance at the time.
"There's a lot of out-of-pocket expenses that I was really just hoping not to pay," he said.
Josefs had bartered successfully once before – by doing some Web design work for a sushi restaurant he and his wife frequent – and decided to try again. After calling an insurer to make sure his barter partner was an actual dentist, Josefs got about $900 in work in return for designing a Web site for the dental practice.
He and the dentist hashed out a price after Josefs showed some sample Web sites and explained their cost.
Web design is a popular bartering tool, but sometimes a specific skill isn't necessary.
New Sharon, Maine, resident Anita Allen is spending part of her summer volunteering at nearby Franklin Memorial Hospital to help trim her uninsured grandson's medical debt. Allen, 72, works in the hospital's kitchen and gift shop under its Contract for Care program, which pays her by reducing the debt, which she figures may be around $8,000.
She said her grandson took two trips to the emergency room for car and snowmobile accidents. He suffered no serious injuries, but the ambulance rides and exams that followed were pricey.
"It sure helps to give time and pay off a bill because those bills run up quite fast," she said.
Sarasota, Fla. resident Steve Armstrong said his wife is getting a $6,000 dental implant paid by barter dollars he piled up through his business, Steve's Termite & Pest Control.
Armstrong earns barter dollars by doing a few days of work each month for fellow members of International Barter Exchange.
"Then the word of mouth from them goes to cash-buying customers too," he said. "It's like free advertising."
Bartering to pay health care bills is generally limited to specialties like dentistry or smaller doctor practices that are less bureaucratic, said Andrew Whinston, a University of Texas at Austin professor who has studied bartering.
But it never hurts to ask whether bartering is possible. Osborne recommends writing a letter – not making a phone call – to ask if bartering for a bill is possible, either before or after a visit. She has request forms her patients can fill out.
If a care provider agrees to barter, patients should comparison shop to get a sense of fair prices before agreeing to a deal. Zimmelman said some providers will charge a different price for barter customers.
He also said patients should clarify how much bartering can be done. Providers rarely accept bartering as the only form of payment for expensive procedures.
Check on the quality of a potential barter partner's work before agreeing to trade. Patients who want to barter for their health care are already shrinking the pool of providers they can chose from because not every doctor is willing to do it. That can limit quality, Whinston noted.
No matter what is bartered, the transaction must be reported to the Internal Revenue Service. The fair market value of property or services received should be included as income on tax returns (For more information see ). http://www.irs.gov/taxtopics/tc420.html
Failing to do so can lead to headaches. Osborne said state officials once audited her barter accounts to make sure proper taxes were being paid.
"Several people ... had not realized that they had to report it on their taxes, and so they ended up having to redo their taxes and were angry with us," she said.