Pretty scary word, right? Take a second to list all the things that could drive somebody to take the somewhat dramatic action of declaring bankruptcy. Most would guess out of control credit card debt, substance abuse, the housing crash or gambling debts. Well, the number one reason for bankruptcy is not being able to pay your medical bills. This is an issue for both the insured and the uninsured. This is less of a problem for the poor as they are covered by Medicaid. Please don’t think that those who are working or even have company paid insurance are immune from this issue.
Take a look at Dan Mangan’s CNBC blog that looks at this issue and note the various factors that lead to bankruptcy. He notes that 20% of the adult pre-Medicare population will grapple with these costs and 10 million with year-round health insurance will not be able to pay their bills this year. These numbers are staggering. It is also scary to see how people try to make ends meet by putting their bills on their credit cards, cutting back on food and housing payments and doing a variety of others things to be able to try to settle their medical debts.
Perhaps for the pharmaceutical industry, the biggest concern is the 25 million people who cut back on their prescriptions because they can’t afford them. This leads to huge lost potential revenue for the industry but also leads to even more medical bills for the total system. It is a death spiral that needs serious attention. Healthcare reform is not going to make this problem go away as the trend towards higher deductibles will continue. Removing the lifetime cap on benefits will help but that only impacts a small number of people. The real issue is the co-pays that mount and really hurt those people living on the edge.
The cost of medical bills is something we must all struggle with from both a moral and a practical standpoint. Perhaps it might be worth sitting down and determining how much you would have to pay if a medical disaster hits your family and where would that money come from. Then think about your relatives and friends and try to figure out how they would deal with this issue. I think you will see that this is a real problem and for many in America, bankruptcy is only one medical diagnosis away.
As leaders in the healthcare world, it is up to us to help come up with the solutions. Perhaps this needs to start with a thorough understanding of the issues and a realistic view of what is good and what is lacking in the current system. We can’t ignore this and think it is somebody else’s problem. We then need to think about solutions and recognize how everything we do in some ways impacts these issues. The solutions will come from a partnership of some kind between government and private industry and everyone must deliver their best thinking as the status quo is definitely not sustainable.