Thread by @asymmetricinfo

All right, circling back to the Medical bankruptcy debate one more time, to explain why 500k bks due to medical bills seems unbelievable to me. 500k is 2/3rds of all bankruptcies.

Did it really seem likely, I asked, that medical debt would dwarf every other cause: illness-related income loss, job loss, divorce, lawsuit, business failure, compulsive shoppers?

(No, I'm not saying compulsive shoppers describes most debtors. But report on bankruptcy for any length of time, and whoo boy, you'll discover they exist, and they make for some eye-opening reading.

Anyhoo, I'm not sure people understand why I think that medical debt dwarfing everything else is unlikely.

Answer: because we have pretty good figures for bad medical debt. Since 2000, hospitals have provided about $620 billion in uncompensated care.

Some of that is financial assistance from hospitals, not bad debt--but as the AHA dryly notes, the line between "financial assistance" and "bad debt" isn't entirely clear.

Now, this is computed at cost, not at what they billed. But again, the line between the two is not clear, since hospitals can and do negotiate on uninsured medical bills.

Let's be *insanely* generous to the medical-bills-cause-most-bankruptcy argument and double that figure. Let us also assume, absolutely incorrectly, that all of it remains outstanding, not having been settled or written off.

We get $1.24 trillion worth of outstanding medical debt.

Total outstanding consumer debt is about $14 trillion. newyorkfed.org/microeconomics…

Total non-housing debt is $4 trillion. Why would medical be driving *such* a disproportionate share of BKs? Because it's unsecured? Credit card debt is unsecured, as is the underwater balance on your vehicle.

I mean, you can make an argument for it--some people put medical bills on credit cards, medical debt is less likely to be planned for, people usually try to reaffirm their vehicle. But then you should also use a more realistic number for bad debt, which is $40 billion a year.

$40 billion a year is like a rounding error on new credit card originations. And yes, people do bankrupt credit card bills that aren't just for heart-lung machines.

You really have to stretch to argue that $40 billion a year--or even whatever you get grossed up for hospital markup and physician practices not included in that number--is driving 2/3 of the bankruptcy in this country, all by itself.

It's really ... quite unlikely. Quite, quite unlikely, and is an obvious check that Warren et al never made.

Let me close by addressing the question that a number of people have been lobbing into my mentions: *Why would I even write this*? Isn't *any* number of bankruptcies due to medical bills unacceptable? Don't I understand that it's just @$#! gross to quibble about exact numbers?

For starters, asking a journalist "Why would you write something that is true?" is a really weird question.

But beyond that: the whole debate started with a quibble over numbers.

The Bernie Sanders campaign wants to insist that it's reasonable to believe that 500k people a year declare bankruptcy because of their medical bills. Okay, if you want to put a number on it, it matters whether the number is true.

If it didn't matter, they wouldn't be putting a number on it in the first place!

Since it's important, I explained why I think that in fact, it is not true.

And the people attacking this explanation as, effectively, immoral, are basically arguing that we have a moral obligation to believe every bad thing that is ever said about the American health care system.

Like, if I blamed the American health care system for the civil war in the Congo, it would be morally wrong to contradict me.

You can think that the American health care system needs changing even if most bankruptcies are caused by something other than medical bills. You can favor single payer anyway! There are plenty of good arguments left! You don't need to aggressively protect the bad ones!

You can also believe that some bks are caused by medical bills, while still believing that most other bankruptcies are not--just as you can believe that some cancers are caused by smoking, and support a smoking ban, without having to believe that smoking causes almost all cancer.

It's not a binary. Treating it as one doesn't help anyone, and it especially doesn't help if you propose to tackle a big, complicated system like health care. That's going to require good data and careful analysis.

/FINIS