Bartering for health care is on the rise as the recession drags on

Jun 21 2009

CNN reports that bartering is booming and that "business owners with an eye toward cutting costs are increasingly viewing bartering as a viable option for obtaining medical services for themselves and their employees."

CNN reports: "Entrepreneurs frequently cite the cost and restricted availability of health care as one of their top business challenges. A recent survey by the Main Street Alliance, an industry group lobbying for health-care reform, found that just 34% of the small employers it polled offer employee health coverage." CNN also notes that "customers have shifted their priorities to more vital, basic services" (Peng, 6/19).

Kaiser Health News also reports on the rise of bartering, especially for health care. "Alan Zimmerman, a spokesman for ITEX Corporation, the largest network of barter exchanges in North America, says in the past two years the demand for health care has jumped by more than 20 percent. The company has 551 physicians and 618 dentists who participate in its 100 local barter groups." KHN notes: "Barter is little more than a stopgap solution for the uninsured. But with doctors, dentists, psychiatrists, chiropractors and even cosmetic surgeons offering their services, bartering is providing a temporary safety net of sorts for some workers who have lost their jobs and health coverage. And in some cases, people who have inadequate insurance are using barter to get critical services, such as dental and vision benefits."

KHN also reports: "There are two main types of bartering: direct and indirect. In the former, people engage in direct trades of goods and services without using money. In the latter, small-business owners and individuals accumulate credits, or barter dollars, by providing specific services ranging from painting a porch to putting on a dance performance. Those barter dollars can be used to buy the services of any other network member. That way, a barber with a toothache can barter for dental work, without having to find a dentist who wants a haircut. Many of these exchanges are designed for small business owners seeking to conserve cash. Nearly 400,000 businesses participate in about 500 trade exchanges in the United States, said Ron Whitney, executive director of the International Reciprocal Trade Association, which promotes the barter industry."

According to KHN: "The American Medical Association has no specific policy on bartering, but supports doctors' freedom to choose how they want to be paid, a spokesman said. The government only bars doctors from bartering for more than the cash value of their services from Medicare, the federal program for the elderly, and Medicaid, the state-federal program for the poor and disabled. Anyone who barters more than $600 in goods and services a year must pay taxes on the transactions." It also notes that "direct bartering is conducted mostly on Web sites" and that it "appears to be most common in rural areas and in the South" (Sharpe, 6/17).