The 4 of us have been studying medical debt for 5+ years, including an exciting debt forgiveness experiment with @RIPMedicalDebt. Our initial goal with this paper was to establish a set of facts on medical debt that could inform policy and lay a foundation for future research.
We’re grateful to the editors who pushed us to be ambitious and write a paper that tries to paint a more comprehensive picture of the evolution of medical debt over the last decade. Here are some key takeaways:
1. Over 2009-2020, medical debt (as listed on credit reports) has grown to account for more than half of debt in collections, measured both as the stock of debt in collections (left) and the flow of debt in collections accrued in the last year (right).
That is, while financial distress has declined over the last decade due to the recovery from the Great Recession, medical debt has grown relative to non-medical debt and is now greater in total than debt in collections from all other sources combined.
If you have a debt collector calling you up or knocking on your door, it’s more often than not because of an unpaid medical bill. I've been studying medical debt for years and I still find this fact jarring.
2. Medical debt is disproportionately concentrated in the South and in low-income communities. The avg amount of medical debt is 3x higher in the South than in the Northeast (left). The avg amount of medical debt is 5x higher in poor communities than rich ones (right).
3. The ACA Medicaid expansions led to a (huge) 34 pp decline in medical debt in collections in expansion states vs non-expansion states (left). Non-medical debt did not trend differentially in expansion vs non-expansion states (right), reducing concerns about confounding factors.
4. Medical debt has historically been highest in the South. Because most states in the South have not expanded Medicaid, medical debt has increased the most in the places with the highest amounts of medical debt (a “poor gets poorer” type of result)
In expansion states, the gap btw the richest and poorest communities fell (left). In non-expansion states, the gap btw the richest and poorest communities grew (right). Strikingly, communities with the most medical debt in 2009 saw the largest increases over the last decade.
There’s more in the paper, including an estimate of the total amount of medical debt and a discussion of the limitations of measuring medical debt with credit reports.
In writing the chapter, we tried to put ourselves in the shoes of a 2nd year PhD student who is interested in learning about -- and potentially doing research on -- selection markets.
We provide a common framework, terminology, and notation that can be used to understand many of the recent wave of IO-related papers on selection markets, which has largely focused on insurance and credit markets
This spring, Congress set up a $175 billion Provider Relief Fund to provide support for hospitals, physician groups, nursing homes, and other health care providers. To date, HHS has allocated roughly $75 billion of these funds, with additional distributions in progress.
We are deeply grateful for the heroism displayed by health care workers. And we support Congress’s decision to set up the Provider Relief Fund. But we are concerned that funding has not been well-targeted.
A (longish) thread on tradeoffs and false tradeoffs during the COVID-19 crisis
With the unrelenting drop in the stock market and off-the-charts UI claims, there are growing concerns that the economic costs of the “cure” are worse than the health costs of the “problem”
Tradeoffs are central to economics. Many of our canonical models are designed to illustrate tradeoffs and we are quick to point out tradeoffs (aka unintended consequences) when they are ignored
Because of tradeoffs, reasonable people with shared goals can disagree simply because they have different views of the underlying elasticity of labor supply, degree of moral hazard, etc that determines optimal policy.
Rs seem to be finally acknowledging that a broad set of the electorate wants affordable health insurance, coverage for pre-existing conditions, low drug prices, etc.
The ACA is the most credible market-based approach to expanding health insurance. The basic structure has its origins in right-wing think tanks and was first implemented by R governer @MittRomney. Obama adopted the approach in a (perhaps naïve) attempt to find common ground w Rs