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Medical bills cause more than half of US personal bankruptcies
Debt due to medical bills is the largest single cause of personal bankruptcies in the United States, a newly published study on the Health Affairs web site reported. About half of those filing bankruptcy in 2001 did so because of medical bills resulting from illness or injury. What is most unexpected about the data is that most individuals or couples who went bankrupt were not part of the 45 million uninsured. Nearly 76 percent had health insurance at the start of their illness.
The report, “Illness and Injury as Contributors to Bankruptcy,” is based on research conducted by David Himmelstein, an associate professor of medicine at Harvard Medical School in Boston; Elizabeth Warren, a professor of law at Harvard Law School; Deborah Thorne, associate professor in the Department of Sociology and Anthropology at Ohio University; and Steffie Woolhandler, associate professor of medicine at Harvard.
In 2001, nearly 4 million debtors and dependents were involved in personal bankruptcy. The researchers surveyed 1,771 bankruptcy filers in five federal courts in 2001 and conducted in-depth follow-up interviews with 931. The study was the first to collect detailed information on medical expenses, diagnoses, access to care, work loss and insurance coverage.
Millions of working class and middle class wage earners obtain health insurance through their employers or must pay many hundreds of dollars a month for individual coverage. As medical expenses continue to soar, fueled especially by prescription drug costs and expensive new technology, employers are saving money by shifting more of the costs of coverage to employees and by cutting benefits.
The research showed that the median income in the year before filing major medical bankruptcy was $24,500. Increased costs for coverage and fewer benefits combined with a major, chronic illness of a family member or wage earner can create conditions in which no matter how the family tries, it cannot meet expenses. Debtors reported that in the two years before filing for bankruptcy, 40.3 percent had lost phone service, 19.4 percent had gone without food, 53.6 percent had gone without needed doctor or dentist visits, and 43.0 percent had not filled a prescription.
The employment-based health care system can produce a vicious downward spiral for someone with an illness. Taking time off work because of illness can lead to loss of a job, which leads to loss of health coverage, producing huge medical bills, leading to bankruptcy. A medical event that in Germany or Japan might mean someone taking a few months off for treatment and therapy before resuming work and normal activities, in the US can result in serious hardship and even financial catastrophe.
One example in the report describes a man who worked for a large national company that provided a high-deductible health plan. After suffering a broken leg and torn knee ligaments, he had to pay $13,000 for co-payments, deductibles and uncovered services. He was forced into bankruptcy as a result.
Compounding the problems of increased costs and fewer benefits is loss of work and income, since employers may not pay disability insurance or sick leave. This can take place because workers themselves become ill or because they may have to take time off work to care for an ill spouse or child. The cost of paying for someone else to take care of the ill family member is prohibitive.
When an individual cannot continue to work, there is frequently a lapse in health care coverage.
While medical debtors were similar to other debtors in many respects—the average debtor was a 41-year-old woman with children and some college education, most were home owners in the working and middle class—one major difference was that nearly 40 percent of medical debtors had experienced a lapse in coverage during the two years before the filing. Even though most medical debtors had insurance at the start of their illness, one devastating—and paradoxical—consequence of a serious illness can be to lose medical coverage.
Read More
http://wsws.org/articles/2005/feb2005/medi-f09.shtml
In 2001, nearly 4 million debtors and dependents were involved in personal bankruptcy. The researchers surveyed 1,771 bankruptcy filers in five federal courts in 2001 and conducted in-depth follow-up interviews with 931. The study was the first to collect detailed information on medical expenses, diagnoses, access to care, work loss and insurance coverage.
Millions of working class and middle class wage earners obtain health insurance through their employers or must pay many hundreds of dollars a month for individual coverage. As medical expenses continue to soar, fueled especially by prescription drug costs and expensive new technology, employers are saving money by shifting more of the costs of coverage to employees and by cutting benefits.
The research showed that the median income in the year before filing major medical bankruptcy was $24,500. Increased costs for coverage and fewer benefits combined with a major, chronic illness of a family member or wage earner can create conditions in which no matter how the family tries, it cannot meet expenses. Debtors reported that in the two years before filing for bankruptcy, 40.3 percent had lost phone service, 19.4 percent had gone without food, 53.6 percent had gone without needed doctor or dentist visits, and 43.0 percent had not filled a prescription.
The employment-based health care system can produce a vicious downward spiral for someone with an illness. Taking time off work because of illness can lead to loss of a job, which leads to loss of health coverage, producing huge medical bills, leading to bankruptcy. A medical event that in Germany or Japan might mean someone taking a few months off for treatment and therapy before resuming work and normal activities, in the US can result in serious hardship and even financial catastrophe.
One example in the report describes a man who worked for a large national company that provided a high-deductible health plan. After suffering a broken leg and torn knee ligaments, he had to pay $13,000 for co-payments, deductibles and uncovered services. He was forced into bankruptcy as a result.
Compounding the problems of increased costs and fewer benefits is loss of work and income, since employers may not pay disability insurance or sick leave. This can take place because workers themselves become ill or because they may have to take time off work to care for an ill spouse or child. The cost of paying for someone else to take care of the ill family member is prohibitive.
When an individual cannot continue to work, there is frequently a lapse in health care coverage.
While medical debtors were similar to other debtors in many respects—the average debtor was a 41-year-old woman with children and some college education, most were home owners in the working and middle class—one major difference was that nearly 40 percent of medical debtors had experienced a lapse in coverage during the two years before the filing. Even though most medical debtors had insurance at the start of their illness, one devastating—and paradoxical—consequence of a serious illness can be to lose medical coverage.
Read More
http://wsws.org/articles/2005/feb2005/medi-f09.shtml
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Excessive medical expenses
Study finds that half of health care dollars are wasted
Victoria Colliver, Chronicle Staff Writer
Wednesday, February 9, 2005.
About 50 percent of health care spending is eaten up by waste, excessive prices and fraud, according to a report set for release today by Boston University researchers.
Major sources of unnecessary spending include administrative costs and profit in the insurance industry, high prices of prescription drugs and health services and, to a smaller extent, theft and fraud, according to the study.
U.S. health spending is projected to reach $1.9 trillion in 2005. "If half of health care spending is wasted now, that's $950 billion this year. If we could save even a third of waste, we'd save over $300 billion this year," said Alan Sager, co-director of the health reform program at Boston University's School of Public Health and co-author of the report.
The report, which uses data collected by other researchers and from the government, warns that the nation's fast-growing health care tab is consuming an ever-greater share of the America's overall economic resources. Health care will consume 15.5 percent of the U.S. economy this year, up from 13.2 percent in 2002, the study notes.
Sager and co-author Deborah Socolar arrived at their 50 percent waste estimate by culling published material such as comparisons of U.S. medical costs with those of other countries and estimates of administrative expenses in the U.S. health care system.
Sager argued that waste needs to be curbed and doctors need to make more careful decisions to control runaway spending.
"We know there is enough money to take care of everyone, but not if we keep practicing blank-check mentality and using cost controls that have failed for decades," he said.
The report's criticisms of administrative expenses are based on a study last year by Harvard Medical School that determined that bureaucratic inefficiency on the part of insurance companies, doctors, hospitals, nursing homes and other institutions cost the country $399.4 billion in 2003.
A spokeswoman for the trade group that represents health insurers described administrative cost estimates for the industry as "very vague and generally exaggerated."
Susan Pisano of the America's Health Insurance Plans said it's difficult to calculate administrative costs because much of that spending benefits consumers by providing better quality care and finding ways to save money.
The report placed much of the responsibility for reform on doctors because it contends that decisions made by physicians determine about 87 percent of personal health spending.
"We certainly make decisions about what care or what treatment the patient needs ... but (we) don't control the prices charged by the pharmaceutical companies or the hospitals," said Dr. Michael Sexton, a Marin County physician and president-elect of the California Medical Association.
Sexton said doctors in general try to make the best and most efficient decisions on behalf of their patients. "Some of the solutions are going to require us as a nation to invest in technology that will help us learn what is the best care for the least cost," he said.
Cutting out the excess in health care doesn't solve problems for people who are not able to get enough care, said Gary Claxton, a vice president with the Henry J. Kaiser Family Foundation.
"There's no doubt that some of the things we do in the health care system we don't need to be doing," he said. "But we also know there's a whole bunch of things people need but we don't do for them. You just can't count one side of it."
Costs on the rise
A report released today by researchers at Boston University's School of Public Health found:
Health care costs absorbed a 24.1 percent share of the nation's economic growth between 2000 and 2005.
The rate of increase in U.S. health spending slowed for the first time in seven years in 2003, but the increase of 7.7 percent was still the third- fastest rise in the past decade.
U.S. health spending per person in 2002 was 2.1 times the average in Canada, France, Germany, Italy, Japan and the United Kingdom.
Source: "Health Costs Absorb One-Quarter of Economic Growth, 200-2005," Boston University.
Excessive medical expenses
Study finds that half of health care dollars are wasted
Victoria Colliver, Chronicle Staff Writer
Wednesday, February 9, 2005.
About 50 percent of health care spending is eaten up by waste, excessive prices and fraud, according to a report set for release today by Boston University researchers.
Major sources of unnecessary spending include administrative costs and profit in the insurance industry, high prices of prescription drugs and health services and, to a smaller extent, theft and fraud, according to the study.
U.S. health spending is projected to reach $1.9 trillion in 2005. "If half of health care spending is wasted now, that's $950 billion this year. If we could save even a third of waste, we'd save over $300 billion this year," said Alan Sager, co-director of the health reform program at Boston University's School of Public Health and co-author of the report.
The report, which uses data collected by other researchers and from the government, warns that the nation's fast-growing health care tab is consuming an ever-greater share of the America's overall economic resources. Health care will consume 15.5 percent of the U.S. economy this year, up from 13.2 percent in 2002, the study notes.
Sager and co-author Deborah Socolar arrived at their 50 percent waste estimate by culling published material such as comparisons of U.S. medical costs with those of other countries and estimates of administrative expenses in the U.S. health care system.
Sager argued that waste needs to be curbed and doctors need to make more careful decisions to control runaway spending.
"We know there is enough money to take care of everyone, but not if we keep practicing blank-check mentality and using cost controls that have failed for decades," he said.
The report's criticisms of administrative expenses are based on a study last year by Harvard Medical School that determined that bureaucratic inefficiency on the part of insurance companies, doctors, hospitals, nursing homes and other institutions cost the country $399.4 billion in 2003.
A spokeswoman for the trade group that represents health insurers described administrative cost estimates for the industry as "very vague and generally exaggerated."
Susan Pisano of the America's Health Insurance Plans said it's difficult to calculate administrative costs because much of that spending benefits consumers by providing better quality care and finding ways to save money.
The report placed much of the responsibility for reform on doctors because it contends that decisions made by physicians determine about 87 percent of personal health spending.
"We certainly make decisions about what care or what treatment the patient needs ... but (we) don't control the prices charged by the pharmaceutical companies or the hospitals," said Dr. Michael Sexton, a Marin County physician and president-elect of the California Medical Association.
Sexton said doctors in general try to make the best and most efficient decisions on behalf of their patients. "Some of the solutions are going to require us as a nation to invest in technology that will help us learn what is the best care for the least cost," he said.
Cutting out the excess in health care doesn't solve problems for people who are not able to get enough care, said Gary Claxton, a vice president with the Henry J. Kaiser Family Foundation.
"There's no doubt that some of the things we do in the health care system we don't need to be doing," he said. "But we also know there's a whole bunch of things people need but we don't do for them. You just can't count one side of it."
Costs on the rise
A report released today by researchers at Boston University's School of Public Health found:
Health care costs absorbed a 24.1 percent share of the nation's economic growth between 2000 and 2005.
The rate of increase in U.S. health spending slowed for the first time in seven years in 2003, but the increase of 7.7 percent was still the third- fastest rise in the past decade.
U.S. health spending per person in 2002 was 2.1 times the average in Canada, France, Germany, Italy, Japan and the United Kingdom.
Source: "Health Costs Absorb One-Quarter of Economic Growth, 200-2005," Boston University.
That story by SFgate or Chron was fabulous. It can be used as a basis for other stories.
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