• Posted November 15, 2022

Many Insured Americans Are an Injury Away From Bankruptcy: Study

One in 5 privately insured American adults hospitalized for a traumatic injury end up with medical bills they can't pay, a new study finds.

Among more than 3,100 working-aged insured adults who suffered a traumatic injury, the risk of incurring co-pays and deductibles they couldn't afford was 23% higher than among similar adults without traumatic injuries. These patients were also more likely to be hounded by collection agencies, the study showed.

"The amount of medical debt in America is $88 billion, and this is on top of what patients are already paying, so this is what they can't pay," said lead researcher Dr. John Scott. He is an assistant professor of surgery and a member of the Institute for Healthcare Policy and Innovation at the University of Michigan in Ann Arbor.

"And we accept this system where there's nearly $100 billion of excess debt on the backs of the sick and the injured, who are unable to pay -- that's just the normal everyday America that we live in," Scott said.

On average, those with outstanding bills owed more than $6,000 and had a 110% higher bankruptcy rate compared to uninjured patients.

For the study, Scott's team used Blue Cross Blue Shield and credit report data.

The study doesn't reveal patients' credit scores or how much debt they had before getting hurt, so researchers can't tell if their medical bills put them over the top.

"If we have multiple credit reports after their injuries, that would be more compelling to really prove causality," he said. "As it is, we can't say that it's causal, but it's really compelling and it also fits with what our patients tell us."

Insurance with high deductibles may be one of the problems, Scott said. "The whole point of deductibles is to keep people from using health care that they don't need," he said. "But no one's overusing care for traumatic injuries."

One solution would be to have no deductibles for traumatic injuries, he suggested. In lieu of that, deductibles could be based on the patient's ability to pay.

"My worry about people that can't pay is they're not going to go get more medical care," Scott said. "If we want people to really get their lives back after injury, if they have PTSD [post-traumatic stress disorder] or depression or anxiety after their car crash or after they were a victim of a shooting or a stabbing, those are the patients who are not getting the mental health care they need, because they already have so much medical debt that they can't afford it. Or maybe they're not getting the physical therapy they need, because they already have so much medical debt, they can't afford it."

Scott said doctors work hard to use every bit of medical science possible to get patients the best possible outcome.

"What these data suggest is that there are some policy solutions we can use to help patients not just survive their injuries but really thrive after their injuries," he added.

Dr. Stephen Kemble, a Honolulu psychiatrist who is a spokesperson for Physicians for a National Health Program, favors Medicare-for-all or some other single-payer system like most industrialized countries have. That would eliminate medical debt altogether and ensure access to care for everyone, he said.

"[Such programs are] much simpler to administer, and they're very popular, and they don't really cost any more than something that would have some kind of means testing," he said.

Deductibles and co-pays haven't benefited the system or have left patients with crushing debt, Kemble said.

"The attempt to control health care costs by raising deductibles and co-pays backfires and has very cruel consequences for large numbers of people, and it's not good policy," he explained.

The report was published online Nov. 11 in JAMA Health Forum.

More information

For more on medical costs, head to the Kaiser Family Foundation.

SOURCES: John Scott, MD, MPH, assistant professor, surgery, Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor; Stephen Kemble, MD, psychiatrist, Honolulu, spokesperson, Physicians for a National Health Program; JAMA Health Forum, Nov. 11, 2022, online