Palin Speaks

[TimG]

Do you have a different estimate of the number of medical bankruptcies per year? Is there some number that you would consider to be acceptable?

Do you mean: is there a number I could agree upon as fact? Or, do you mean: is it acceptable for there to be medical bankruptcies in an advanced society?

 

If the former, probably not. I don't imagine most bankruptcies have a single cause, but rather many contributing factors. One of the criteria for inclusion as a medical bankruptcy was at least $1000 in unpaid medical bills in the last two years. At that sort of low threshold, many bankruptcies would qualify as a "credit card bankruptcy" a "housing bankruptcy" a "tax bankruptcy" and probably a whole host of other type bankruptcies.

 

If the latter, I think my answer is "yes, it's acceptable". Note that I believe this is very much different from saying anyone should be denied medical treatment because they cannot afford to pay for it.

[kenberg]

Good article in The Washington Post

 

http://www.washingtonpost.com/wp-dyn/conte...9082101778.html

Is this really true:

In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills.

That seems very high to me even if it were possible to link a bankruptcy to a single cause.

I am always surprised when this type of information isn't universally known because it is not at all new. And I certainly don't understand how it could be considered shocking.

Usually statistical data is not universally known, or even widely known. This is partly because it's hard to keep track of whether it is 70,000 or 700,000 or maybe 7,000,000. One can try. 700,000 works out to about 1 in 500, but of course bankruptcy is a family matter we need to think there are, perhaps, 150,000 family units in the US meaning that 700,000 bankruptcies would be about 1 in 200 families. That's probably a more memorable figure.

 

 

But there is also the issue of credibility. The people whi cite such figures can always find some data somewhere that adds up as they say. Looking more carefully often shows that the figures, when you see what they are actually counting, are ot the sort of ting that you would like to base any action on.

 

If you have the time and inclination, here is a lengthy story to illustrate.

 

As my father became older he transferred his assets into my name. He developed an aneurysm, had an operation that appeared to have gone well, then it turned sour, there was a flurry of effort to save him, he died (this was more than thirty years ago). I figured I should get a lawyer to make sure matters were handled right (the money involved was not large at all but enough to not screw it up). The lawyer explained that since the money was in my name, and I wasn't the patient, I didn't have to pay the hospital bills.

 

Well of course I paid the bills. The purpose of transferring the assets was to avoid probate and all the crap that goes with it, not to stiff an honest doc making a living. But consider: Suppose that my father had lived and suppose we decided to screw the doctors. He files bankruptcy, we keep the swag. I imagine this happens fairly often.

 

Further

There was one doctor who did not get paid, and this also illustrates the point.

 

 

My father was on medicare and the doctors agreed to accept payment from medicare. The effect is this, as you probably know. The doctor sets the charge at y, but medicare resets it to x and pays a fraction, usually 80%, of x. The patient is then responsible for the rest (20%) of x. y is, supposedly, a non-starter. The doctor has some benefit here. He is assured of this 80%, and usually gets the remaining 20%. But he gives up the claim of getting y. Some doctors, inadvertently perhaps, billed for y minus the 0.8x instead of the 0.2x. Good try. Mostly they corrected this but one guy never did. I would phone (long distance), they would agree, next month I would receive an unchanged bill. After about three rounds of this I wrote and told them that if they ever sent a correct bill they would get a check by return mail, but I would not be making any payment on an incorrect bill. They never sent a correct bill, I never sent a check.

 

My thought at the time was that the guy is a moron. Maybe, maybe not. Perhaps far-fetched but: The patient was deceased with no estate to attach. If the doc can claim (not rightly but successfully) that y-0.8x is a bad debt then he can perhaps deduct this from his income, and if this amount is significantly more than 0.2 x (it was) then he may get more of a savings in taxes than if he gets the 0.2 x from me. Whether he was being clever or (my guess) incompetent is unknown but again you see that any claim that "oh, my poor father died bankrupt and the poor doctor never got paid" should be looked at skeptically.

 

 

Statistics, in honest and capable hands, can be very helpful. Newspaper people tend to repeat the most bizarre numbers as if they had been delivered directly from God.

 

 

Sorry about the length of this, but I tend to reflect back on my personal experience in judging the credibility of claims.

[Winstonm]

Usually statistical data is not universally known, or even widely known

 

I should have clarified. I did not mean the data point of 700,000 was widely known, only that the general information that health care bills were a leading cause cited by those filing for bankruptcy was widely known.

[TimG]

Usually statistical data is not universally known, or even widely known

 

I should have clarified. I did not mean the data point of 700,000 was widely known, only that the general information that health care bills were a leading cause cited by those filing for bankruptcy was widely known.

If you look at the data that Richard linked, you will see that in only 27% of bankruptcies were there "uncovered medical bills exceeding $1000 in 2 years before filing". The data does not give any indication what percentage of the debtor's unpaid bills were uncovered medical bills, nor whether bankruptcy could have been avoided were it not for these uncovered medical bills.

 

The Washington Post article said "we force 700,000 Americans into bankruptcy each year because of medical bills". I took that to mean 700,000 bankruptcy filings when I should have understood it to be 700,000 bankruptcy filers plus dependents.

 

On the basis that "uncovered medical bills exceeding $1000 in 2 years before filing" equates to "forced into bankruptcy because of medical bills" and that the numbers include bankruptcy filers and dependents, the 700,000 figure becomes easy to understand.

[kenberg]

In short, the 700,000 figure is bullshit.

[Winstonm]

It seems there is indeed a great amount of doubt about the accuracy of the claim that medical bills account for nearly half of bankruptcies.

 

http://www.factcheck.org/askfactcheck/what...l_personal.html

 

I stand corrected.

[kenberg]

So I guess the number is 700,000 or else it's half or else it's nearly half or else it's more than half or perhaps really lots or something. Actually the report you cite claims 27%:

"uncovered medical bills exceeding $1,000 in the past two years (27 percent)"

 

 

It says

"It determined that 46.2 percent of bankruptcies were attributable to a major medical reason."

but that is quite different from saying that it was the unpaid doctor bills.

The "illness or injury (28.3 percent of respondents)" is different. To once again invoke my father as an example, he had a stroke in 1953 that kept him from working for an extended period. He did not go bankrupt, but of course there were problems. The main issue was that he could not work, it was not the cost of the doctor's bills. This distinction seems relevant as I read the numbers in the article you cite.

 

I don't want to get consumed by this, since obviously there are problems out there whatever the numbers might be. But Obama is in serious danger of totally losing control and I think some precision in what is being suggested, who it would help, and what it would cost has to be put out there where we can all see it, and then the numbers need to hold up without a lot of revisions and explanations.

[Lobowolf]

So I guess the number is 700,000 or else it's half or else it's nearly half or else it's more than half or perhaps really lots or something. Actually the report you cite claims 27%:

"uncovered medical bills exceeding $1,000 in the past two years (27 percent)"

 

 

It says

"It determined that 46.2 percent of bankruptcies were attributable to a major medical reason."

but that is quite different from saying that it was the unpaid doctor bills.

The "illness or injury (28.3 percent of respondents)" is different. To once again invoke my father as an example, he had a stroke in 1953 that kept him from working for an extended period. He did not go bankrupt, but of course there were problems. The main issue was that he could not work, it was not the cost of the doctor's bills. This distinction seems relevant as I read the numbers in the article you cite.

 

I don't want to get consumed by this, since obviously there are problems out there whatever the numbers might be. But Obama is in serious danger of totally losing control and I think some precision in what is being suggested, who it would help, and what it would cost has to be put out there where we can all see it, and then the numbers need to hold up without a lot of revisions and explanations.

$1,000 is a pretty low threshold...I'd imagine that most of those 27% would be filing regardless of the medical expenses. If your bankruptcy application says you have $1,200 in medical debt and $20,000 in consumer debt, you're in the 27%.

[Winstonm]

This is the section to which I was referring:

 

In fact, the study said that the out-of-pocket costs cited by those interviewed were "often below levels that are commonly labeled catastrophic." The authors hypothesized that other related factors, such as the loss of a job, helped push families into bankruptcy: "Presumably, such costs were often ruinous because of concomitant income loss or because the need for costly care persisted over several years."

 

It appears to me that the issue of medical expenses as a cause of bankruptcy may be too complicated to quantify precisely.

[helene_t]

It appears to me that the issue of medical expenses as a cause of bankruptcy may be too complicated to quantify precisely.

Suppose one could find a formula that expresses the probability of going bankrupt as a function of relevant variables such as income, nett debt, gross debt. Then if we have some data for a sample of citizens including those variables as well as medical debt. Suppose the formula said that Alice has a 36% chance of going bankrupt, but if we removed her medical debt the chance would only be 22%, that would mean that for that person alone, removing medical dept would prevent 0.14 bankruptcy. Then one could compute that number across the whole sample and add the numbers together.

 

Something like that. I am sure Echognome can tell us how to do it. Whether the necessary data are available is another question.

 

What one should not ask is how many bankruptcies were caused by medical debt. At least to me, it is not quite clear what that would mean in the context of lots of people going bankrupt due to a huge debt and it is not clear exactly who would have avoided bankruptcy if they had no medical debt. The proper question to ask is how many bankruptcies could be prevented by eliminating medical debt.

 

Of course there is no such thing as a free lunch. Suppose tax payers were to pay medical expenditures of people at high risk of bankruptcy. Then the increased taxes would have some adverse effects, including bankruptcies. Which leads me to think the (academic) exercise isn't very interesting after all. I am not arguing for or against any policy here. But I don't think the bankruptcy issue is interesting.

[Trinidad]

How about job loss for medical reasons (and subsequent bankruptcy)? The medical bill may be relatively low, but the mortgage still needs to be paid.

 

Does this count as medical bankruptcy? Should it?

 

Rik

[helene_t]

How about job loss for medical reasons (and subsequent bankruptcy)? The medical bill may be relatively low, but the mortgage still needs to be paid.

 

Does this count as medical bankruptcy? Should it?

I think that's a different issue. The proposed bill does (I think?) not address compensations for loss of income.

[TimG]

How about job loss for medical reasons (and subsequent bankruptcy)? The medical bill may be relatively low, but the mortgage still needs to be paid.

 

Does this count as medical bankruptcy? Should it?

It counts as a medical bankruptcy in the study cited earlier in this thread.