How the accumulation of medical debt compromises health outcomes

By Naveed Saleh, MD, MS | Fact-checked by Barbara Bekiesz
Published January 15, 2024

Key Takeaways

  • Much of the literature on medical debt indicates cancer and diabetes as the primary drivers of debt, but a new study finds that heart disease, chronic lung disease, asthma, and hypertension are just as culpable.

  • Medical debt can worsen health status and exacerbate hypertension, anxiety, and depression in all patient populations, but especially those experiencing healthcare disparities.

  • Physicians and healthcare institutions can screen for medical debt and offer cost-conscious care for their patients, expanding prior focus beyond cancer and diabetes.

The staggering accumulation of medical debt by individuals in the US is not a new problem, but one that continues to worsen. Today, 58% of all third-party debt collections are due to medical debt, according to authors of an article in Preventive Medicine.[] 

Medical debt exerts a psychological and physical toll on patients, compromising health outcomes in myriad ways. It also affects the ability to save for retirement and other milestones on the road to a secure financial future. At the same time, the distribution of medical debt further exacerbates healthcare disparities, with Black and Hispanic adults, as well as individuals with lower incomes, burdened most.

Health consequences of financial sacrifices

The KFF Health Care Debt Survey (based on data collected February to March 2022) found that almost half of all adults harbor some level of debt due to medical or dental bills.[] 

Of course, the accumulation of debt can lead to bankruptcy. The Preventive Medicine authors note that between 2013 and 2016, nearly two-thirds of bankruptcies were associated with healthcare expenses, representing a significant increase from 1981, when only 8% of bankruptcies were due to such debt. 

Findings from the KFF Survey revealed that adults with debt “report making a number of sacrifices and enduring substantial financial consequences.” These individuals are delaying things like going to college and buying a home, and their sacrifices have led them to feel as though they are unable to provide a "good life” for their families.

It is well documented that financial stressors can trigger and exacerbate anxiety and mood disorders. Individuals experiencing medical debt are more likely to have hypertension, worsened health status, compromised mental health, and decreased life expectancy.

Moreover, because people with increased health needs require more care and generate larger medical bills—and exact higher levels of debt—a vicious cycle forms. 

Debt’s public health effects

Medical debt can also adversely impact health behaviors, according to an Evidence Review from the Sycamore Institute.[] “Debt and debt-related collections practices can cause stress that can lead to risky health behaviors like smoking, increased alcohol consumption, and poor nutrition,” the review authors wrote. They note that threats of legal action and jail time may be used as an intimidation tactic by some collectors, even when there may be no legal basis for a lawsuit. “These and other aggressive debt collection practices—garnishing wages, property liens, and home foreclosures—can further increase stress," they continued.

Another problem with medical debt is that people with such debt may avoid necessary healthcare or prescriptions because they are reluctant to incur additional debt. Their access to care may also be affected if HCPs refuse to offer services to such patients until past debts are paid.

According to the KFF Survey, 15% of adults who carry debt claim to have been denied care by a hospital or dental/medical provider. This experience is more common among Black adults than White or Hispanic adults. About 20% of adults living in households that make less than $40,000 per year report being denied care by a medical provider vs 13% in higher-income households.

Conditions driving medical debt

The treatment of any number of conditions can result in healthcare debt, including cancer, diabetes, heart disease, arthritis, chronic lung disease, asthma, smoking, mood disorders, and anxiety. Medical debt is a burden on many households—not only lower-income ones, as the authors writing in Preventive Medicine discovered. Many of the conditions in this list are associated with debts of $2,000 or more.

The authors found that medical debt affecting lower-income households was generally related to heart disease and anxiety disorders, whereas higher-income households experienced debt related to chronic lung disease and mood disorders; debt in higher-income households often involved smoking.  

What physicians can do

The authors writing in Preventive Medicine note that, although screening patients for debt occurs in cancer and diabetes care, they recommend that it be extended to other conditions as well. To date, even well-heeled academic centers fail to offer comprehensive financial navigation services. 

“Outside of diabetes and cancer care there is a critical need for patient-centered financial navigation and assistance programs available to individuals with varying income levels and medical needs who are seen in other settings,” they wrote.

"Our analyses suggest that many individuals with asthma, anxiety disorders, mood disorders, lung disease, and heart disease and those in tobacco-treatment programs are in dire need of financial assistance."

Authors, Preventive Medicine

An editorial published in the AMA Journal of Ethics argues that, despite physicians’ training to consider all relevant interventions regardless of cost, financial realities make cost considerations in care an imperative.[] 

“It is apparent that the physicians of tomorrow will be increasingly compelled to consider costs and recognize their role in protecting patients’ wallets. It is time we give them the skills, training, and support they need to do so,” stated the author.

To this end, a nonprofit called Costs of Care offers an Affordability Accelerator to help develop cost-cutting strategies. It also offers training on how to decrease costs of quality care.

The federal government offers patient-facing resources that help individuals find financial assistance for medical care. The assistance programs include Medicare, Medicaid, the Children's Health Insurance Program (CHIP), the Health Insurance Marketplace, and the Consolidated Omnibus Budget Reconciliation Act (COBRA). The resources also present options for obtaining help with the cost of vaccines and prescription drugs. Clinicians can direct patients to these educational materials, regardless of their perceived or confirmed socioeconomic status.

What this means for you

Medical debt commonly affects individuals from marginalized communities who are unable to afford the cost of care for their illnesses. The stress of mounting debt further undermines their  health status. Health problems can become exacerbated when patients with medical debt forego needed medical care for fear of accruing additional debt. Physicians can help by screening patients for medical debt and offering cost-conscious care. Patients can also be directed to resources that can help defray further debt.

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