Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

Medical bankruptcies happen less frequently than you think

Peter Ubel, MD
Policy
October 15, 2018
Share
Tweet
Share

Elizabeth Warren describes medical bills as “the leading cause of personal bankruptcy” in the United States. She bases that opinion in part on her own research, in which she and her collaborators surveyed people who had experienced personal bankruptcy, asked them whether they’d experienced health-related financial distress, and concluded that 60 percent of all bankruptcies in the U.S. result from illness or injury.

An article in the New England Journal of Medicine this spring convincingly argued that Warren’s estimates were seriously exaggerated due to faulty research methods. I’ll briefly summarize that critique. But more importantly, I’ll explain why even revised bankruptcy estimates still overstate the contribution of health care costs to American bankruptcy rates.

Here is a quick review of the issue.

1. Warren’s team surveyed people who had declared bankruptcy, asked them if they’d experienced health-related financial distress, and then blamed bankruptcy on health problems for anyone who reported such distress.

2. That’s a problem because it assumes that, lacking such health-related financial distress, none of these people would have become bankrupt. But you could have asked all of these people about housing-related financial distress, and you’d probably find at least 60 percent reporting such distress, too. Would that mean housing costs were responsible for their bankruptcies? You could ask about other sources of financial distress too – car payments, food costs, etc. – and you’d be left wondering which of these expenses caused them to experience personal bankruptcy. But of course, for most people, it is the combination of expenses that puts them into bankruptcy.

3. A better methodology is to follow people hospitalized with a new illness or injury, and see how many end up in bankruptcy. In the New England Journal of Medicine study, researchers looked at people after they had been hospitalized for the first time in at least three years. They found that the rate of personal bankruptcy rose after hospitalization, causing them to conclude that 4 percent – not 60 percent – of bankruptcies are related to serious illness or injury.

Now 4 percent is still a big number, and the figure shows a steep and troubling rise in bankruptcy after hospitalization. But there is another thing we need to keep in mind.

4. Most people who become bankrupt after illness or injury are not necessarily bankrupt because of health care costs. Many people become bankrupt because they have lost income – they are too sick to work.

5. Reducing people’s exposure to health care costs won’t necessarily have a huge impact on bankruptcy rates.

I am passionate about reducing people’s exposure to unnecessary health care expenses. But I don’t believe more robust insurance coverage is a panacea for personal bankruptcy.

We need more robust health care coverage for people with serious illnesses or injuries. But even more importantly, we need to pursue policies that get Americans to save more money and that address the kind of income inequality that puts so many hardworking people one major life event away from bankruptcy.

Peter Ubel is a physician and behavioral scientist who blogs at his self-titled site, Peter Ubel and can be reached on Twitter @PeterUbel. He is the author of Critical Decisions: How You and Your Doctor Can Make the Right Medical Choices Together. This article originally appeared in Forbes.

Image credit: Shutterstock.com

ADVERTISEMENT

Prev

A physician's breakthrough against prior authorization

October 15, 2018 Kevin 30
…
Next

What the medical profession can learn from this patient

October 16, 2018 Kevin 4
…

Tagged as: Public Health & Policy

Post navigation

< Previous Post
A physician's breakthrough against prior authorization
Next Post >
What the medical profession can learn from this patient

ADVERTISEMENT

More by Peter Ubel, MD

  • Clinicians shouldn’t be punished for taking care of needy populations

    Peter Ubel, MD
  • Patients alone cannot combat high health care prices

    Peter Ubel, MD
  • Is the FDA too slow to handle the pandemic?

    Peter Ubel, MD

Related Posts

  • Why this physician teaches health policy in medical school

    Kenneth Lin, MD
  • Digital advances in the medical aid in dying movement

    Jennifer Lynn
  • Medical trainees need knowledge and education on health care systems and policy

    Daniel Arteaga, MD, MBA and Isobel Rosenthal, MD, MBA
  • How the COVID-19 pandemic highlights the need for social media training in medical education 

    Oscar Chen, Sera Choi, and Clara Seong
  • Should medical school encourage political thought?

    Faiz Kidwai
  • Uninsured medical students are at risk

    Zannah Herridge-Meyer, Melanie Langa, and Kelly Stewart

More in Policy

  • How the One Big Beautiful Bill could reshape your medical career

    Kara Pepper, MD
  • Why the U.S. Preventive Services Task Force is essential to saving lives

    J. Leonard Lichtenfeld, MD
  • Brooklyn hepatitis C cluster reveals hidden dangers in outpatient clinics

    Don Weiss, MD, MPH
  • Why nearly 800 U.S. hospitals are at risk of shutting down

    Harry Severance, MD
  • Innovation is moving too fast for health care workers to catch up

    Tiffiny Black, DM, MPA, MBA
  • How pediatricians can address the health problems raised in the MAHA child health report

    Joseph Barrocas, MD
  • Most Popular

  • Past Week

    • Why pain doctors face unfair scrutiny and harsh penalties in California

      Kayvan Haddadan, MD | Physician
    • Love, birds, and fries: a story of innocence and connection

      Dr. Damane Zehra | Physician
    • How a doctor defied a hurricane to save a life

      Dharam Persaud-Sharma, MD, PhD | Physician
    • Why physician strikes are a form of hospice

      Patrick Hudson, MD | Physician
    • What street medicine taught me about healing

      Alina Kang | Education
    • The silent cost of choosing personalization over privacy in health care

      Dr. Giriraj Tosh Purohit | Tech
  • Past 6 Months

    • Why transgender health care needs urgent reform and inclusive practices

      Angela Rodriguez, MD | Conditions
    • COVID-19 was real: a doctor’s frontline account

      Randall S. Fong, MD | Conditions
    • Why primary care doctors are drowning in debt despite saving lives

      John Wei, MD | Physician
    • Confessions of a lipidologist in recovery: the infection we’ve ignored for 40 years

      Larry Kaskel, MD | Conditions
    • Why taxing remittances harms families and global health care

      Dalia Saha, MD | Finance
    • mRNA post vaccination syndrome: Is it real?

      Harry Oken, MD | Conditions
  • Recent Posts

    • Who are you outside of the white coat?

      Annia Raja, PhD | Conditions
    • How hospitals can prepare for CMS’s new patient safety rule

      Kim Adelman, PhD | Conditions
    • Physician practice ownership: risks, rewards, and reality

      Paul Morton, CFP | Finance
    • How peer support can save physician lives [PODCAST]

      The Podcast by KevinMD | Podcast
    • Why AI in health care needs the same scrutiny as chemotherapy

      Rafael Rolon Rivera, MD | Tech
    • The humanity we bring: a call to hold space in medicine

      Kathleen Muldoon, PhD | Conditions

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 8 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

ADVERTISEMENT

  • Most Popular

  • Past Week

    • Why pain doctors face unfair scrutiny and harsh penalties in California

      Kayvan Haddadan, MD | Physician
    • Love, birds, and fries: a story of innocence and connection

      Dr. Damane Zehra | Physician
    • How a doctor defied a hurricane to save a life

      Dharam Persaud-Sharma, MD, PhD | Physician
    • Why physician strikes are a form of hospice

      Patrick Hudson, MD | Physician
    • What street medicine taught me about healing

      Alina Kang | Education
    • The silent cost of choosing personalization over privacy in health care

      Dr. Giriraj Tosh Purohit | Tech
  • Past 6 Months

    • Why transgender health care needs urgent reform and inclusive practices

      Angela Rodriguez, MD | Conditions
    • COVID-19 was real: a doctor’s frontline account

      Randall S. Fong, MD | Conditions
    • Why primary care doctors are drowning in debt despite saving lives

      John Wei, MD | Physician
    • Confessions of a lipidologist in recovery: the infection we’ve ignored for 40 years

      Larry Kaskel, MD | Conditions
    • Why taxing remittances harms families and global health care

      Dalia Saha, MD | Finance
    • mRNA post vaccination syndrome: Is it real?

      Harry Oken, MD | Conditions
  • Recent Posts

    • Who are you outside of the white coat?

      Annia Raja, PhD | Conditions
    • How hospitals can prepare for CMS’s new patient safety rule

      Kim Adelman, PhD | Conditions
    • Physician practice ownership: risks, rewards, and reality

      Paul Morton, CFP | Finance
    • How peer support can save physician lives [PODCAST]

      The Podcast by KevinMD | Podcast
    • Why AI in health care needs the same scrutiny as chemotherapy

      Rafael Rolon Rivera, MD | Tech
    • The humanity we bring: a call to hold space in medicine

      Kathleen Muldoon, PhD | Conditions

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Medical bankruptcies happen less frequently than you think
8 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...