Industry Voices—Let's stop calling it medical 'debt'

The term ‘debt’ carries judgment. It varies by degree, but the presumption is that those in debt made a choice. You knew what you were charging to the credit card. You knew the tuition when you took the student loan. But no one chooses medical debt. It happens to you.

In the US, patients agree to receive treatment — often in life-and-death situations — and they get the best medical attention in the world. In exchange, they agree to pay the cost, whatever it is. The healthcare system has you over a barrel and it knows it.

Even if you have comprehensive health insurance, you can easily be a one-car accident or cancer diagnosis away from six-figure debt. That’s why medical debt is the leading cause of bankruptcy in the United States and affects nearly one-third of working Americans.

Describing this phenomenon as “medical debt” diverts accountability from the major players in the system. We need to change the lexicon. “Medical debt” implies the patient did something wrong—instead of being wronged themselves.

The current system has created a state of healthcare oppression with $140 billion in medical debt shouldered by millions of victims of healthcare profiteering.

Our system of privatized healthcare produces innovation and quality of care that no other country can achieve. But there must be limits. We need a fair cost of care and a commitment to end the shameful practice of healthcare oppression euphemistically called medical debt.

The reason this problem is so hard to solve is that every player in the healthcare system shares the blame. Nothing will change until we stop wrongly pointing the finger at the patients. Here’s the role each type of organization plays in healthcare oppression.

Health plans profit billions of dollars every year. How much of that comes from medical debt? No one knows. They aren’t keeping track. Protecting customers from debt isn’t on the agenda. Trust me—I used to be a health plan executive.

The surprise medical billing act may have an impact but today, out-of-network charges are a cash cow for providers that exploit this system. Do you think it intrinsically costs 10 times more to receive care from an out-of-network provider? Of course not. 

Hospitals have wild swings in price for the same procedures and make their financial assistance programs difficult to apply for or even find. The recent price transparency rule reveals how absolutely ridiculous hospital markups are on medications, but the general public still lacks a way to process this information and comparison shop.

For drugs dispensed at retail pharmacies and via mail order, PBMs use rebates and purposeful obfuscation of the actual price of medications to inflate drug costs to four, five or even six figures and pocket the spread.

Drug manufacturers who heroically came to our rescue with the COVID-19 vaccines also come for our life savings with compound and high-cost generics priced far above the market rate for drugs that cost pennies to produce.

If you are part of the healthcare industry, understand that it’s up to us to fix this. Most people in this complex industry can see some small way to make it better. You owe it to yourself and to our country to bring those ideas to life, whether that’s within your current role or by finding or creating a new one. We can do better. We have to. And it starts with taking responsibility.

Michael Waterbury is CEO of Goodroot, a community of companies committed to reinventing healthcare one system at a time.