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Oh, look, Elizabeth Warren is bringing up her work on medical bankruptcy! Of which I have been sharply critical! bloomberg.com/opinion/articl…
One thing that's really worth noting: Warren's work doesn't show that medical bills are pushing huge numbers of people into bankruptcy. It doesn't even claim to show that. Rather, it has been misinterpreted by people who don't understand how to read the papers.
That misinterpretation has been aided by her co-authors, who have tended, in interviews, to blur what the papers actually found--that many people who go bankrupt have some combination of illness and moderately large (>$1,000 or > $5,000) medical bills.
This is not the same thing as saying the bills caused the bankruptcy. Illness is an independent predictor of bankruptcy, because when you get very sick, you can't work. Which is why even Canada has "medical bankruptcies".
I've criticized Warren both for not-very-good methodology, and for publishing with people who strenuously encourage misinterpretation of the results. But tonight, SHE is encouraging that misinterpretation! This is, as far as I know, a first for her.
To be clear: there are people who get pushed into bankruptcy by medical bills. And more broadly, the American system of health care finance leads to a lot of stress over medical bills, even for those who can pay them. The fragmentation is inefficient and exhausting.
The one clear result from the Oregon Medicaid study is that it alleviated a significant amount of financial distress, which wasn't just good for peoples' wallets, but for their mental health.
However, there's no reason to think that medical bills cause half of all bankruptcies
However, there's no reason to think that medical bills cause half of all bankruptcies
One way you can know this is the stat cited by Elizabeth Warren: that having health insurance made little difference to whether you had what they defined as a "medical bankruptcy".
Her co-authors cite this as evidence that US health insurance is inadequate. I cite it as evidence that their results are garbage. The only way that having insurance could be largely irrelevant to whether you have a medical bankruptcy is if medical bills aren't causing those bks.
And indeed, a much better study with a better design, done by a top team of health care economists, found that the primary problem is income loss, not medical bills. Suggesting that the real issue is a lack of disability insurance. washingtonpost.com/blogs/post-par…
America's fragmented health care finance is a problem. Bankruptcies from illness are also a problem, albeit not as large as Warren et al claimed. But fixing the first won't fix the second.
