As Bitcoins Gains Acceptance, Medical Practices Must Weigh Risks and Benefits

Doctors are in the business of constantly considering whether the benefits of a certain treatment or medication outweigh its side effects, health risks and costs. In order to run a successful practice, medical professionals should apply the same standards to their business processes.

Bitcoin was initially known as the currency of choice to conduct illegal transactions involving illicit drugs, weapons, stolen IDs and murder-for-hire. However, the synthetic currency has recently earned the trust of major retailers and customers in the United States and worldwide. Such reputable names as eBay, OKCupid, Overstock, TigerDirect, WordPress and myriad other companies have helped to legitimize bitcoins as a form of payment. Now, some medical practices are even accepting bitcoins.

Physicians suggest the following benefits of allowing patients to pay in bitcoins:

• Increase patient anonymity — The same feature that initially made bitcoins attractive to criminals is also a benefit to patients who want to maintain their anonymity. Patients who want to keep their medical treatment private and confidential can conceal bitcoin payments more securely than credit card purchases.
• Avoid credit card fees — Visa, MasterCard and American Express charge businesses a transaction fee that is typically one to three percent greater than the costs of converting bitcoins into U.S. dollars. In addition, patients may be able to avoid high interest rates on credit card balances by using bitcoins instead.
• Ease financial transactions from international clients — If a medical office conducts foreign consultations, money exchange can become cumbersome and expensive. Bitcoin provides an alternative method of making payments across borders.

Before deciding to accept bitcoins, health care professionals should consider a number of potential risks, including the following:

• Hacking concerns — Wired magazine warns, “because all transactions are recorded publicly on the bitcoin peer-to-peer network, once you know the Bitcoin address of the person you’re paying, it’s possible to track all other payments made to that address.”
• Volatility of the market — Bitcoin is not backed by gold, as dollars are, and its value tends to fluctuate wildly from one day, or even hour, to the next.
• Government interference — Because of the currency’s connection to crime, U.S. law enforcement agencies have raided bitcoin exchanges in the past and may do so again.

Before accepting bitcoins, physicians in New Jersey and New York should discuss the risks associated with this new type of loosely regulated currency with an experienced lawyer.

Tagged with: bitcoin as payment for medical services, health care provider attorneys, risks of bitcoin use

• Posted on: May 27 2014