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Medical bankruptcies rise

E-mail | Print | Comments () Posted by Elizabeth Cooney June 4, 2009 09:41 AM

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Spiraling healthcare costs contributed to more than three of every five bankruptcies, according to a national survey conducted before the current economic downturn, even though most of the people had health insurance before they became ill.

Researchers from Cambridge Health Alliance and Harvard Law School analyzed a random national sample of more than 2,000 bankruptcy records in 2007, sent questionnaires to those debtors, and followed up with telephone interviews of about 1,000 of them. Unpaid medical bills or, to a lesser extent, illnesses that resulted in lost jobs contributed to 62.1 percent of bankruptcies, even though most had insurance.

Out-of-pocket medical costs averaged almost $18,000 for medically bankrupt families, ranging from about $6,500 for those with military or veterans coverage to about $26,000 for uninsured patients. Hospital bills accounted for the biggest expenses, followed by prescription drugs, doctors' bills, and insurance.

The study's results, which appear online in The American Journal of Medicine, show a steep increase in medical debt from 1981, when 8 percent of families filing for bankruptcy listed medical bills as a cause, according to research the authors cite. Their own five-state survey in 2001 tied illness or medical bills to just under half of all bankruptcies.

Because the latest survey ended before the current recession began last fall, the authors expect the climb to continue.

"Our findings are frightening," lead author Dr. David Himmelstein, a primary care physician at Cambridge Health Alliance, an associate professor at Harvard Medical School, and an advocate of a single-payer healthcare system, said in a statement. "Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy."

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About white coat notes

White Coat Notes covers the latest from the health care industry, hospitals, doctors offices, labs, insurers, and the corridors of government. Chelsea Conaboy previously covered health care for The Philadelphia Inquirer. Write her at cconaboy@boston.com. Follow her on Twitter: @cconaboy.

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