Kudos to the Nashville Business Journal Health Affairs Editor-in-Chief Susan Dentzer for her insightful comments on many issues surrounding healthcare at the recent Nashville Healthcare Council gathering.

The attention grabbing headline of her corresponding article about the potential for healthcare to be the next sub-prime mortgage crisis rings true though I’m not sure it can all be pinned on HSAs as she does in her article.

Compare the two industries and beyond the similarities in dollars paid out, there are some disturbing lessons begging to be learned.

Housing runs in the hundreds of thousands of dollars for a family. Healthcare has the potential to do the exact same.

Mortgages can easily hit $1200 per month in expense. And at $1200-1400/month for family healthcare coverage, average healthcare premium costs alone are comparable to the size of a mortgage note for many families.

And houses have to be maintained. You need a new roof or air conditioning (that’s where I’m living right now). Those are not small expenses running $5K-$10K per instance. Under all too common circumstances, a major illness can generate bills into the tens and hundreds of thousands of dollars beyond premium.

The financial implications of healthcare are clear. They are equal to if not greater than housing expenses for most Americans. But that’s where many of the the similarities end. And this is where it starts to get worrisome. It is potentially far worse than the mortgage crisis.

With housing, you can see it, feel it, touch it. Now ask yourself if you know what tests your doctor ran that last time you saw them.

With housing you decide when to buy. You decide what the right size house is and the best schools. Healthcare is often times unplanned or in a best case scenario, that pregnancy might give you 7-8 months forewarning, but the cancer did not nor did the broken leg (don’t tell me you were planning on breaking your leg unless of course you had a ski trip planned).

In buying a home, you do your research. Find out what other people are paying. Compare features. Ever tried to find out the price of a strep throat test? Pretty basic, but we’ve tried it, and it’s all across the board. For that hip replacement surgery, did your doc ask if you wanted a plastic of a titanium hip, or did he put in what your insurance would cover or simply what he was trained on and what he knows?

With housing you get all sorts of disclosure information about costs. In fact law requires it. Pardon the uncontrolled laughter, but do you have any idea what you are going to be charged walking into your doctor or the ER? There is no pricetag on healthcare for the most part. Cost transparency does NOT exist and what you pay and what someone else pays for the exact same service can vary dramatically.

In buying a home, you budget for it. It’s a big expense. You don’t go outside of your means and say “Damn it all, that’s what I want and by gosh I’m going to get it even if it’s five times what I can afford.” (OK so those days only recently ended in housing). In healthcare, other than premiums, do you have a budget? Are you on a plan with a deductible? Do you have a co-insurance that saddles you with 10 or 20% of the costs incurred? That can be an unbudgeted $500 or even $10 thousand dollars or more.

Which leads to the terms. For a home, you set up terms. You pay out over 30 years or so. Truth in lending requires them to show you how much you will actually pay out in interest, etc. over the 30 years (try to avoid passing out when you see that one by the way). In home-buying, you set up terms that you are (at least theoretically) able to meet with your income. Healthcare is potentially a home-sized expense. And it generally runs its course within 60-90 days. Not a lot of time for an expense that is potentially the size of your home.

So if you default on your home loan, they repossess it. That’s the pledged asset because on debts that size, no one is going to give you the money for the purchase without securing an asset. Healthcare is really different. They can’t make you take back that nasty gall bladder or break your leg again (though the collections tactics they use sometimes border on that). There is no asset pledged against the expense. Hospital wants the money? You don’t have it. their option is to try to force you to liquidate your assets - like your home. The one you lost in the mortgage crisis?

Does healthcare have the potential to be the next sub-prime mortgage crisis?

No, it has far more potential.