Hawkins on “Doctors as Bankers”

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Jim Hawkins (Houston) has posted to SSRN his working paper “Doctors as Bankers: Evidence from Fertility Markets.”  Here is a portion of the abstract:

In a variety of medical contexts, doctors play a prominent role as bankers, lending directly to patients or arranging for patients to obtain loans from third party lenders. This Articles offers evidence of this activity from fertility markets based on an empirical study of virtually every fertility clinics’ website in the United States and on interviews with key market participants. ***

Despite the prevalence of this conduct, the law does not generally regulate doctors as bankers. Patients are largely left unprotected by current regulations, but they face significant problems when doctors act as bankers. Patients, vulnerable to their physicians’ suggestions, often uncritically accept financial advice from their doctor. Instead of shopping of the best loan, they take the loan their doctor selects for them. But, doctors face a conflict of interest when choosing which lender to recommend because different lenders charge physicians different amounts when patients pay with loans. Also, patients are often left confused when doctors present piecemeal information about lenders, and patients end up taking out loans with unfavorable terms.

In light of these problems, I offer a potential regulatory framework to regulate doctors acting as bankers. I suggest that regulations should require doctors to disclose the basic loan information that the Truth in Lending Act currently requires that lenders disclose. ***

The full article is available here.

-Bridget Crawford

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