Tuesday, September 01, 2009

Medical Bankruptcy in the United States, 2007: Results of a National Study

This is a great read regarding health care and it's correlation to bankruptcy. It points out the large increase in bankruptcies attributed to medical reasons and has significant and well thought out data to back up that conclusion. I'm not really surprised by that conclusion. But what does surprise me is the correlation between health insurance and medical bankruptcies.

Less than one quarter of debtors—whether medical or nonmedical— were uninsured when they filed for bankruptcy; an additional 7% had uninsured family members (Table 3). Medically bankrupted families, however, had more often experienced a lapse in coverage during the 2 years before filing (40.0% vs 34.1%, P = .005).

In multivariate analysis, being uninsured at filing did not predict a medical cause of bankruptcy, while a gap in coverage did (odds ratio [OR] = 1.35, P = .002). Other predictors included: older age (OR = 1.016/year, P = .0001), married (OR=1.59, P=.0001), female (OR=1.34, P=.002), larger household (OR = 1.97/household member, P = .01), and lower income quartile (OR = 1.30, P = .0001).

Medical debtors’ court records identified more debt owed directly to doctors and hospitals than did nonmedical debtors’, a mean of $4988 vs $256, respectively (P = .0001). Medical debtors with coverage gaps owed providers a mean of $8338, vs $2740 (P = .0001) for medical debtors with continuous coverage. Nonmedical debtors had few medical debts, averaging under $300 regardless of insurance status. (Medical debts financed through credit cards or other borrowing, or owed to collection agencies are not included because they cannot be identified through court records.)

(emphasis mine)

Now that really surprises me. In my anecdotal experiences, medical bankruptcies happen because people without insurance get into a catastrophic health predicament. The instances I'm familiar with are two babies being born with serious medical complications to families without health insurance and a life-threatening injury to a family without health insurance. I stand corrected. Whether or not a person has medical coverage has no correlation to their bankruptcy filing. Beware anecdotal evidence.

It does however bolster my firm belief that whatever we want to do to improve health care in the United States, forking over money to insurance companies is NOT the answer.

EDIT: purely cosmetic change to post


DADvocate said...

Interesting. Am I reading this right, that being married is a greater predictor of bankruptcy that a gap in health insurance?

Dante said...
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Dante said...
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DADvocate said...

I checked with a stats guy I work with and did a web search. Being married is a greater predictor of potential for bankruptcy than a gap in insurance coverage. Looks like we have a crisis here. Plus, look how bad a larger household is.

DADvocate said...

Dante's point is valid and would apply to larger households as well. The more people, the more likely a catastrophic, costly illness.

Dante said...

Sorry, I misread Table 2 and am redacting my above comment. But it's important to note that the bankruptcy could be for a spouse's illness making it more likely for married people to declare bankruptcy given all other factors are equal.

Cousin Pat from Georgia said...

This is a great link, with much to think about.

I also tend to see things from the probability angle: the more people in your immediate family, the higher your chances for medical catastrophe (ergo the higher your chances are for medical bankruptcy).

Also, with many marriages requiring dual incomes to maintain standard of living, the medical catastrophe to one member of two causes both an expenditure and a lack of income.