By David U. Himmelstein, M.D.; Steffie Woolhandler, M.D., M.P.H.; and Elizabeth Warren, J.D.
New England Journal of Medicine, June 7, 2018
To the Editor:
Dobkin et al.1 have made an important contribution in clarifying the relationship between health shocks and economic risk; like us, they have shown that health crises have major economic consequences for families and that even the insured are not adequately protected. However, in their Perspective article (March 22 issue),2 they mischaracterize our studies implicating medical problems as contributors to approximately 60% of personal bankruptcies,3,4 and their claim that medical bankruptcies are uncommon rests on methodologic choices that do not capture all medical causes of bankruptcy.
Contrary to their claim that our inferences about the causal relationship between medical bills and bankruptcy did not align with our respondents’ experiences, almost everyone we labeled “medically bankrupt” explicitly told us that medical problems caused their bankruptcy. For example, 41.8% of debtors interviewed specifically cited illness as a cause of their bankruptcy, 37.8% cited illness-related income loss, and 54.9% cited medical costs.4
Dobkin et al. estimate the share of bankruptcies attributable to hospitalization from the change in slope of bankruptcy-filing trends after an index hospitalization. Yet, their data show that the rate began rising before hospitalization. Since the rate of bankruptcy does not increase with age, the increasing rate of bankruptcy before hospitalization could well be due to previous medical costs. Estimated bankruptcy rates based only on a change in filings after an index hospitalization are probably underestimates. In addition, they excluded anyone hospitalized in the 3 years before the study period, thus omitting many people with frequent hospitalizations — a group likely to be at high risk for medical bankruptcy.
The authors assume that hospitalization is the sole indicator of a medical problem that could lead to financial distress. But families can drown in medical debts without a hospitalization — they may spend hours in an emergency department after an accident, followed by months of physical therapy, or have chronic conditions requiring drugs costing tens of thousands of dollars. The authors explain that most people who incur high total medical expenditures have been hospitalized. Yet out-of-pocket — not total — expenditures are most salient to bankruptcy risk; an analysis of 2015 Medical Expenditure Panel Survey data reveals that only 18.2% of out-of-pocket spending was incurred by people hospitalized during the year. In effect, the authors excluded the people who incurred 81.8% of out-of-pocket costs.
Finally, the analysis by Dobkin et al. is not designed to measure bankruptcy associated with a child’s or spouse’s illness. However, a child’s terminal illness or a spouse’s long-term care can bankrupt a family.
Although they acknowledge the limitations of their analysis, the authors assert that their results “suggest that medical factors play a much smaller role in causing U.S. bankruptcies than has previously been claimed.” Yet medical bills account for a majority of unpaid debts sent to collection, and many other studies confirm that illness often inflicts financial suffering.5,6
Debtors’ self-reports do have limitations. But hospitalization is only part of the story, and understanding medical bankruptcy requires multiple forms of empirical investigation, including asking debtors about their histories. Characterizing debtors’ self-reports as “myth” is demeaning to people struggling with health care costs, and artificially narrowing the definition of medical bankruptcy does not improve understanding of its causes.
6. Consumer Financial Protection Bureau. Consumer credit reports: a study of medical and non-medical collections. December 2014 (http://files.consumerfinance.gov…).