JAMA study finds medical debt a predictor of housing and food insecurity

A new study has found a link between patients' medical debt and a higher risk of experiencing housing and food insecurity.

Of the 142,000 adults surveyed, 18% held medical debt. Such debt was found to be a predictor of worsening social determinants of health, a recent JAMA study found. Decreases in health status and coverage loss left those surveyed with a 1.7-fold to 3.1-fold higher risk of worsening housing and food security.

These individuals were less likely to pay off debt or seek additional care, therefore leading to financial distress for health providers and pharmacies. The study found that improved and expanded health coverage could address financial strain on households.

“Our findings suggest that incurring medical debt leaves many unable to pay for utilities and worsens housing and food security, key SDOH associated with adverse health outcomes, including frailty at birth,” the study authors wrote. “Hence, unaffordable medical bills may constitute an SDOH in their own right and contribute to a downward spiral of ill-health and financial precarity.”

Of over 142,000 adults represented in the U.S. Census Bureau 2018, 2019 and 2020 survey of income and program participation, 1 in 8 had medical debt. Hospitalization, disability and having private high-deductible, Medicare Advantage or no coverage were risk factors associated with medical indebtedness. Residing in a Medicaid expansion state was found to be protective.

The study authors stated that their findings regarding Medicare Advantage may seem counterintuitive but could be tied to the plan’s low upfront costs but high out-of-pocket payments for out-of-network care, prolonged hospitalizations and specific services to treat serious illnesses. Patients with cancer diagnoses were at especially high risk for medical debt and employment loss.

The majority of all unpaid bills on credit reports were delinquent medical bills, the study noted. This assessment did not account for medical debt placed on credit cards or paid with mortgages or loans.

“This is a problem in the interest of providers to solve,” said Ian Manners, chief strategy officer and head of life sciences at TailorMed, a technology company working to decrease medical debt. “For organizations taking the more proactive approach, they have a significant impact on the patient's overall experience and ability to receive the right care. They also actually see an improvement to their bottom line because they're able to avoid sending bills to patients in the first place, which end up being time consuming to collect and potentially result in debt that they have to write off. For a lot of those organizations, that's a way to fund this work.”

TailorMed designs software that matches and enrolls patients in funding opportunities based on their insurance, clinical and demographic data. Programs that patients can be matched with include financial assistance programs, government plans, free drug programs and even nonmedical assistance programs.

According to the study, insurance coverage did not provide a guarantee of avoiding troubling medical debt. One-fifth of insured adults between the ages of 18 to 64 years acquired unaffordable out-of-pocket costs in 2020.

Within the Medicare beneficiary group in 2016, out-of-pocket costs averaged $5,460 with half of beneficiaries spending at least 12% of their income and one-quarter spending at least 23%.

“What we've noticed is that this is something that providers can really be proactive about by connecting patients upfront with financial resources that are available,” Manners said. “The proactive and technology driven approach has a big impact on equity as well. A lot of times, those who are better able to navigate a complex process are the folks that get access to resources even when they're available to everyone.”

Organizations like TailorMed can also analyze patients’ insurance coverage to maximize their benefits and identify the most opportune plan for their specific healthcare needs.

Hospital forbearance in collecting debts and financial assistance programs can be upgraded to avoid mounting medical debts, the study suggested. Clinicians can also increase efforts to screen for adverse social determinants of healths and increase referral efforts in financial and medical support programs.

“When we work with provider organizations like health systems, and they deploy our technology in order to solve this problem, they're able to see which patients are at highest risk in form of affordability challenges, and then are able to connect those patients with the resources that are already out there,” Manners said. “If that doesn't take place, patients will end up with medical debt that probably could have been avoided if their provider had been more proactive.”