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More Chronic Conditions Leads to More Medical Debt

Analysis  |  By Jay Asser  
   September 01, 2022

Nearly one-third of patients with seven or more chronic diseases face medical debt versus 7.6% for individuals with no chronic conditions.

Patients with chronic conditions have a higher likelihood of facing adverse financial outcomes and incurring medical debt, according to study published in JAMA Internal Medicine.

The research used medical claims data from adults enrolled in Blue Cross Blue Shield of Michigan from January 2019 to January 2021 and linked it to commercial credit data in January 2021.

Of the 2.85 million adults studied, the predicted probabilities of having medical debt, nonmedical debt, delinquent debt, a low credit score, or recent bankruptcy were all significantly higher when more chronic conditions were present.

Individuals with seven to 13 chronic diseases had medical debt 32% of the time, compared to 7.6% for those with none. The split between the two groups was also wide and skewed heavily to adults with seven or more chronic conditions when it came to nonmedical debt (24% vs 7.2%), delinquent debt (43% vs 14%), a low credit score (47% to 17%), and recent bankruptcy (1.7% vs 0.4%).

Among those with medical debt, the estimated amount increased with the number of chronic conditions, from $784 for individuals with no chronic conditions to $1,252 for those with seven or more.

Related: 23M Americans Owe 'Significant' Medical Debt

The findings featured sizeable variation between each chronic condition and its risk of creating medical debt. The chronic conditions associated with the greatest adjusted increases in medical debt were severe mental illness ($274), substance use disorders ($268), stroke ($235), congestive heart failure ($234), and liver diseases ($228).

The study notes that the variation between conditions could suggest some conditions are more costly to treat with higher out-of-pocket expenses, while others may lead to an individual's inability to work and earn income.

Regardless, the results of the research show that worsened financial health is associated with worse physical and mental health outcomes.

"If poor financial well-being leads to additional chronic disease, policy makers should consider new social safety-net policies to reduce poverty rates and should explicitly incorporate improvements in physical health—and correspondingly reduced health care spending—as a benefit of antipoverty programs," the study concluded.

"If, in contrast, chronic disease diagnoses are directly leading to adverse financial outcomes, then improving commercial insurance benefit design would be warranted to provide additional protection from out-of-pocket medical expenses, particularly for conditions identified as being costly for patients."

The implications of patients accumulating debt puts stress on providers as well.

According to a report from Crowe Revenue Cycle Analytics, hospital collections decrease dramatically when out-of-pocket bills reach $7,500.

Patient statements with balances of more than $7,500 have only increased in recent years, from 5.2% in 2018 to 17.7% in 2021.

Jay Asser is the contributing editor for strategy at HealthLeaders. 


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