More than 50% of bankruptcies in the US stem from medical debts

[Guest guest]

http://www2.efamilypracticenews.com/scripts/om.dll/serve?action=searchDB & searchDBfor=art & artType=fullfree & id=aqf030331501 & special=hilite & query=%5Babstract%5D%28medical+bills%2C%29%5Bbody%5D%28medical+bills%2C%29%5Barticletitle%5D%28medical+bills%2C%29%5Bcontribs%5D%28medical+bills%2C%29

 

 

 

August 1 2003 • Volume 33 • Number 15

 

 

 

NewsHealth care financing woesMedical Bills Behind Many Bankruptcies

 

Bruce Jancin Denver Bureau

 

VANCOUVER, B.C. — More than 1 million American adults each year face bankruptcy because of medical issues, according to estimates based on a new survey.

Among all debtors filing for bankruptcy, 55% of those surveyed cited one or more medical causes for their bankruptcy, Dr. Steffie J. Woolhandler reported at the annual meeting of the Society of General Internal Medicine.

“I think this is an incredibly profound indictment of health care financing in the United States,” said Dr. Woolhandler of Harvard Medical School, Boston.

In 2001, 1,934,038 Americans filed a formal court petition for bankruptcy. That's 1 in every 110 adults. Personal bankruptcy filings are up 360% since 1980.

“Everyone in this room probably has someone who's filed for bankruptcy in their practice. The fact that most of you think you don't know anyone who's ever filed for bankruptcy is a testimonial to how painful and how stigmatizing it is,” she said.

Dr. Woolhandler and her associates conducted a study that required the cooperation of the chief judges in federal bankruptcy courts in California, Texas, Pennsylvania, Illinois, and Tennessee. The researchers administered a written questionnaire to 1,771 consecutive adults filing for personal bankruptcy in those courts in 2001, reviewed detailed court records of all 1,771 cases, and conducted in-depth phone interviews with nearly 1,000 of the debtors.

“We had more than 300 data points on each bankruptcy,” she noted.

Among the debtors filing for bankruptcy who cited one or more medical causes for their bankruptcy, 28% cited illness or injury as the major cause, 27% cited uncovered medical bills as the leading factor, and 21% pointed to loss of substantial income due to illness or injury befalling the debtor or spouse. Others cited a birth, death, addiction, or pathological gambling as a major cause of their bankruptcy.

No one diagnosis stood out as a cause of medical bankruptcy, other than trauma. Medical illnesses ran the gamut.

Mental illness was diagnosed in 11% of all persons filing for bankruptcy. That's a conservative figure; it's likely that the associated stigma leads some debtors to deny mental illness.

“We suspect but have no way of proving that there may be a fair amount of manic-depressive illness among people who go bankrupt. You'd have to do a diagnostic interview to get at that,” Dr. Woolhandler said.

The data underscore a fact familiar to every bankruptcy attorney: Bankruptcy is overwhelmingly a middle-class phenomenon. In fact, 94% of the filers were middle class as defined by home ownership, above-average education, and/or occupation.

The median age of persons filing for bankruptcy was 42, and 56% were women. Each bankruptcy involved an average of 2.65 people in the household.

“The very poor people we would usually think of as being disadvantaged in our health care financing system cannot get access to credit, and if they do get into debt they can't get access to debt relief procedures,” Dr. Woolhandler explained.

In the 2 years prior to filing, 53% of debtors went without needed physician visits, 42% failed to fill a prescription for financial reasons, 20% went without food, and 44% had their telephone service interrupted, she reported.

Among debtors with medical bankruptcy, 75% had health insurance at the start of their illness; most later experienced coverage gaps or lost their health insurance.

“If you have job-related insurance and you get sick or your child gets sick and you have to quit your job, you lose your insurance. It's that double whammy—that people have their insurance linked with their job—that makes people go bankrupt if disaster hits,” Dr. Woolhandler said.

“The problems with health care financing in this country go much deeper than the 41 million uninsured, as if that weren't bad enough,” she continued. “The fact is most of the rest of us have health insurance that will collapse and fail us if we get too sick to work. And this happens literally a million times a year in this country.”

That's not how things work in Canada. “We've reviewed the Canadian data. Medical bankruptcy issues are rather small there, maybe 2%-3% of all bankruptcies—nothing like the 50%-plus in the U.S.,” Dr. Woolhandler said.

 

 

 

 

2004 by International Medical News Group, an Elsevier company. Click for restrictions.

 

 

 

Send a seasonal email greeting and help others. Do good.