Medical care, medical costs

 

Thanks to the Affordable Care Act, something like 90% of Americans have some form of health insurance. Great news! That means we can all afford the medical services we need and nobody has to go broke because they get sick or are injured in a car crash or by somebody exercising their Second Amendment rights! Err, no. Sadly it does not mean that. In the first place, for the 50% of people who get their insurance through employment, it’s costing them more and more for the premiums – by three times the rate of inflation, since 1999.

 

 

 

 

With that, plus deductibles, copays, and payment denials by insurance companies, 0verall, spending by middle income families on health care increased by 25% from 2007 to 2014, while spending on other necessities declined.(1)  What is more, four out of ten insured adults surveyed in 2023 said they had skipped or delayed some type of care in the past year, and one in six said they had problems paying medical bills.(2) According to an investigation by KFF, more than 100 million Americans – 41% of adults – have debts for medical services. A quarter of those owe more than $5,000 and 1/5 of them never expect to pay it off.(3) The KFF investigation uncovered many depressing stories. A couple who were sued for $10,000 by a hospital where the husband’s leg was amputated; another who were left with $80,000 in debt after the premature birth of twins; innumerable people who have been denied services altogether because of outstanding debt. The New York Times reported recently on a large, not-for-profit hospital chain that had an explicit policy of refusing services to people with more than $4,500 in debt. The corporation’s CEO, according to the Times story, was paid $3.5 million in 2021.(4) 

In recent years, investigative journalists and legal advocates have documented the aggressive tactics hospitals use to collect debts from low-income patients. These tactics include sales of debt to third-party buyers, reporting of delinquent debts to credit bureaus, lawsuits, wage garnishments, seizures of bank accounts, property liens, fore-closures, refusals of care, and even arrests. Politicians on the left and the right have criticized these tactics and the inadequacy of charity care.(5) Much of this story is not new: media coverage of the problem of medical debt, the tactics used by hospitals to collect it, and political outcry have all happened before, often in waves of public attention that result in limited and short-lived re-forms. Lasting solutions require an understanding of deeper causes.(6)

 

A historical lens reveals that since the 1980s, medical debts have shifted from obligations negotiated by doctors, patients, and hospitals to assets bought and sold by people with no role in patient care. In part because of the proliferation of insurance plans with higher copayments and deductibles, hospitals have faced more delinquent payments. Hospital administrators have turned away from charity care and have opted instead for aggressive debt collection.(7, 8)

 

To summarize, high out of pocket spending can strain family budgets; many people have burdensome medical debt; and some people delay or forego needed care because of the cost. A study using the Medical Expenditure Panel Survey found that in 2018-2019, 27% of non-senior households experienced one or more of these problems. Using a more inclusive definition of financial strain, the figure was 45.4%.(9)

 

This is related to the problem of the high cost of medical goods and services in the U.S., although it is partially distinct. But understand, this just does not happen in other wealthy countries. We'll discuss the roots of the problem, and possible solutions, anon.*

 

*Yes it's true, physicians in the U.S. have higher incomes than physicians in Canada, particularly in certain specialties. So it isn't terribly surprising that some Canadian physicians would like to move to the U.S. and make more money. The question is which side of that equation is the problem. 

 

1.           Sussman AL. Burden of Health-Care Costs Moves to the Middle Class. The Wall Street Journal.  August 25, 2016.

2.           Pollitz K, Pestaina K, Montero A, Lopes L, Valdes I, Kirzinger A, et al. KFF Survey of Consumer Experiences with Health Insurance. Kaiser Family Foundation; 2023 June 15, 2023.

3.           Levey NN. 100 Million People in America Are Saddled With Health Care Debt. KFF Health News.  June 16, 2022.

4.           Kliff S, Silver-Greenberg J. This nonprofit health system cuts off patients with medical debt. The New York Times.  June 1, 2023.

5.           Levey NN. Hundreds of Hospitals Sue Patients or Threaten Their Credit, a KHN Investigation Finds. Does Yours? Kaiser Health News.  December 21, 2022.

6.           Messac L. Debt Collection in American Medicine - A History. N Engl J Med. 2023;389(17):1621-5.

7.           Messac L. Your Money or Your Life: Debt Collection in American Medicine. New York: Oxford University Press; 2023.

8.           American Civil Liberties Union. A Pound of Flesh: The Criminalization of Private Debt. New York; 2018.

9.           Bernard DM, Selden TM, Fang Z. The Joint Distribution Of High Out-Of-Pocket Burdens, Medical Debt, And Financial Barriers To Needed Care. Health Aff (Millwood). 2023;42(11):1517-26.