Credit crunch may effect healthcare financing

Implications: Changes in the credit market, specifically the subprime market, may impact companies clamoring to finance elective healthcare and cosmetic procedures. This may impact the number of patients ultimately undergoing these expensive procedures.

Analysis: The rise in available credit through the last decade has had influences on elective surgical procedures. Specifically, in the fields of cosmetic surgery, elective opthalmology procedures (LASIK), elective fertility procedures (IVF) and dentistry, financial service companies such as Capital One (COF) have been quick to offer low interest, short term loans with little or no collateral.

These options have been attractive alternatives to patients without the financial resources to afford a $5,000 to $15,000 procedure, many of which must be paid for in full prior to surgery. It seems likely that as credit tightens, these loans will become less available.

The implications of this under-recognized aspect of the credit crunch will likely effect medical device companies, laser companies and others who have come to expect a steady double digit growth in cosmetic and elective surgical procedures.