A just-released survey by LendingTree reveals that 60% of Americans have had medical debt. Of those surveyed, 33% said they currently have medical debt between $5,000 – $10,000. Medical debt is also prevalent across age groups. Today, nearly half of millennials (48%) and 42% of Gen X’ers currently have unpaid medical debt. What’s most striking? Nearly 3 in 4 respondents reported that their debt has prevented them from reaching life milestones, such as buying a house or saving for retirement. For 1 in 10, medical debt has prevented them from having kids.

Solving healthcare’s affordability crisis is tricky because the top drivers of medical debt are often unavoidable, unplanned procedures, according to the LendingTree survey. Emergency room visits are the top source of medical debt, accounting for 39% of medical debt. Additionally, medical debt is not a new problem for most Americans. In 2008, The Commonwealth Foundation reported that 79 million Americans (about 41% of Americans at the time) had medical debt. With deductibles and out-of-pocket obligations up 150% in the past decade, the burden of medical debt continues to grow.

How Americans are Managing Medical Debt

Unexpected medical debt without flexible payment options can derail household budgets. As a result, many patients have to get creative with managing their expenses. Here’s how Americans typically manage medical debt:

  • 33% used money from their savings
  • 23% worked with their healthcare provider on a payment plan
  • 23% took on credit card debt
  • 16% cut other expenses from their budgets
  • 13% took on another job
  • 10% took out a personal loan
  • 9% borrowed from a loved one
  • 5% tapped into their retirement savings

Patients have even resorted to crowdfunding their medical debt. According to a study from the Journal of the American Medical Association between May 2010 and December 2018, nearly 27% of the 1,056,455 fundraisers on the crowdfunding site GoFundMe were for medical debt.

However, some Americans are unable to come up with the funds needed to cover their debt at all. A recent survey conducted by Salary Finance found that over half of Americans, 54%, who had medical debt defaulted on it and according to the LendingTree survey, 8% have declared bankruptcy.

Patientco Sheds New Light on the Affordability Crisis

Patientco’s annual State of the Patient Financial Experience Report sheds more light on the problem. In this year’s survey report, more patients revealed that they had skipped recommended healthcare treatment because of cost concerns than fear of COVID-19. In other words, patients fear medical debt more than being exposed to COVID-19. Also, the survey found that 45% of patients would need help to afford a medical bill over $500. That number jumps to 66% for medical bills that exceed $1,000. These stats illustrate just how easily medical debt can become unmanageable.

As healthcare policy analyst, Paul Keckley states in a recent edition of The Keckley Report, “Coming out of the pandemic, Americans face escalating costs for their basic necessities (housing, food, transportation) which consume 62% of the average household’s spending and more than 80% of those with lower income. They’re not keen to spend the rest for their healthcare.”

Clearly, patients need a better way to deal with rising out-of-pocket costs and medical debt. The health systems that adapt and meet patients where they’re at financially will build revenue resilience and jumpstart their recovery from the pandemic.

What actions should health systems take?

  • Make sure patients can sign up for affordable payment options, including payment plans and financing online. If a patient gets a new bill before an existing payment plan is completed, allow them to add the new balance to their current payment plan. This helps prevent medical debt from becoming unmanageable.
  • Keep in mind that what works for one patient, may not work for another patient. Therefore, offer a variety of tailored payment options that factor in a patient’s bill balance amount.
  • Ensure patients can access personalized payment options before they receive care. By offering upfront, affordable payment options on a price estimate, patients are more likely to keep their scheduled appointment instead of canceling because they didn’t know if they could afford their treatment. 

For more recommendations like these based on recent survey data, check out Patientco’s 2021 Patient Financial Experience Playbook. The recommendations in this playbook are based on survey responses from over 3,000 patients and nearly 50 revenue cycle leaders at large health systems, so don’t miss these timely insights. 

Meet the Author: John W. Mitchell’s job titles have ranged from sailor in the U.S. Navy (broadcast-journalist aboard an aircraft carrier) to COO and CEO for several hospitals. In 2009, HealthLeaders Media named John and his senior executive team the Top Leadership Team in Healthcare for turning around a 90-bed, regional Washington hospital. In 2012, he started his own business, SnowPack Public Relations. John is widely published as a freelance reporter and writer in the hospital, healthcare, and medical sectors. More recently, his projects include writing content on behalf of Patientco. John is also the author of the novel Medical Necessity (four stars on Amazon), and he is a commercially successful landscape and wildlife photographer.