Rising medical debt spawns problems, fosters solutions

Kelley Weiss, of the California HealthCare Foundation’s Center for Health Reporting,  dug deep into the rising mountain of medical debt accumulating around American patients. Her package includes four pieces (one an extended forum, embedded below) on KQED as well as numerous companion stories online. Her stories consider both the causes of and solutions to medical debt, an issue which plagues hospitals as much as it does patients.

In her first piece, Weiss lays out the simple formula driving all that indebtedness: It’s “because health care costs continue to rise at the same time people are losing their jobs and health coverage.” She uses the story of an unfortunate, unemployed motorcyclist to show how the American billing, credit and insurance systems can quickly add debt to injury.

In the second piece, she looks at the debt from the other side, exploring the massive and largely ineffective lengths hospitals go to in order to collect what they’re owed. Since the recession began, even the most successful collections agencies have only been able to collect about 12 percent, one hospital official said. Confronted with this fact, Weiss asked the obvious question.

So why even bother, if you get such a low return? Maybe they could give those financially squeezed patients with no other options a break. Well, to a certain extent they can, and charity care is on the upswing.

But it turns out there are statutes in place that require hospitals to make collection efforts. Medicare is one of the biggest payers to hospitals and it says that hospitals must try to collect money from every patient. And if they don’t? Medicare won’t pay off its bills. Todd Nelson with the Healthcare Financial Management Association said that leaves hospitals in a tough spot.

As wallets remain tight and debt collection becomes increasingly difficult, both hospitals and patients are starting to take steps to become more up front about exactly how much their care is going to cost, Weiss writes in her third installment. Finally, when all else fails, Weiss finds in her fourth installment, patients can turn to California’s Hospital Fair Pricing Act, which “says hospitals must give patients who are at 350 percent of the Federal Poverty Level a discount on their bills if they’re uninsured or underinsured.”

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