A new study about the astouding level of medical bankruptcy in the USA should lead to pause for thought for policy makers elsewhere in the world when considering how to provide health care for their citizens. Dr Raj Persaud, Consultant Psychiatrist writes.
IS THE NHS GOING TO BANKRUPT US? OR IS IT GOING TO SAVE US FROM BANKRUPTCY?
RAJ PERSAUD, CONSULTANT PSYCHIATRIST AND EMERITUS VISITING GRESHAM PROFESSOR FOR PUBLIC UNDERTANDING OF PSYCHIATRY EXAMINES SOME ALARMING NEW RESEARCH WITH STARTLING IMPLICATIONS FOR THE FUTURE OF THE NHS
With the prospect of a change in Government looming following the next General Election, those who work in the National Health Service, like myself, and the rest of the population, who depend upon it, are increasingly worrying about its future.
We know the huge debt which was used in an emergency to transfuse the terminally ill bankers saved their lives (hooray?), but all that expensive life support and intensive care needs to be recouped somehow. Cut backs in public services appear inevitable. Political debate appears to be about whether the cuts will resemble more a butcher’s machete than a surgeon’s scalpel. Or whether, basically, the wound can be dressed so it looks better than it is.
Proposed reform of the NHS will be a key electoral battleground. After decades of re-launches which party has genuine solutions to the predicament our health care represents?
Long lauded as the best healthcare system in the world, it now ever increasingly resembles to many tax payers a financial gravity field – a veritable black hole into which the rest of the nation’s resources are gobbled up never to be seen again. The proportion of national GNP that it consumes is relentlessly increasing, as it is in most developed nations.
Political wisdom holds that it is in fact The Labour Party which is most likely to display the electoral courage to introduce radical reform, and in contrast it’s the Conservatives who need to get the receptionist to constantly reassure the anxious pacing public outside the clinic, that the NHS is ‘safe in its hands’. Yet deep down; sink an oil well into the psyche of the middle class voter, deeper than any opinion poll or journalist is ever likely to penetrate, and you will hit lingering suspicions of the Conservative leaning electorate, in particular, would do better if the NHS was dis-assembled and resembled more a private system, as in the USA.
The thought goes something like this – it’s not the abstemious and disciplined ‘us’ who are clogging up NHS arteries by descending on Casualty Departments after a nights carousing or requiring endless interventions for obesity. Why then should we pay for all those who don’t take responsibility for their own lives or that of the state’s finances?
However a new research paper about to be published by a team of researchers specializing in Public Health analysis, based at the Department of Medicine, Harvard Medical School, lead by Dr David Himmelstein has produced some alarming results which should give those middle class voters pause for thought.
The paper is entitled ‘Medical Bankruptcy in the United States, 2007: Results of a National Study’ and is one of the most comprehensive attempts to analyze what proportion of bankruptcy in the USA is brought about by medical bills which are too excessive for the individual to pay.
This study is a follow up from a 2001 study in 5 states where the same researchers found that medical problems contributed to at least 46% of all bankruptcies. However, as the authors of this paper point out, since then, health costs and the numbers of un- and underinsured have increased in the USA, and bankruptcy laws have tightened. For these reasons the study sought to re-ask the same question in order to investigate how the predicament has changed. After a decade of political effort and healthcare being top of the US political agenda, surely things should have improved?
The current survey involved investigating a random national sample of 2314 bankruptcy filers in 2007, and using a conservative definition of bankruptcy down to medical bills, the study found that 62% of all bankruptcies in 2007 were medical. Furthermore 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. But it’s not just the direct impact of a big bill which can kill you financially. The rest met criteria for medical bankruptcy because they had lost significant income due to illness, or mortgaged a home to pay medical bills.
It’s possible of course to see that requiring a lot of medical help is a kind of triple whammy on you financially – you are least able to work when you most need to in order to pay the doctor. Once you get too ill to work and lose your job, you then lose your health insurance cover, as most of it comes in the form of a work benefit. Then the stress of all this can’t help you recover. Indeed one of the founding values on which the NHS was first constructed was the idea that taking the financial worry out of being ill was a key assistance the state could bestow on its citizens.
What Conservative policy makers should become keenly aware of is that this study, published in the prestigious American Journal of Medicine, found most medical debtors were well educated, owned homes, and had middle-class occupations. Perhaps amazingly to the British, unaware of how healthcare works in the USA, three quarters of these bankrupts due to medical bills, actually had health insurance!
Health insurance always has limitations on its cover. It shares with car and home indemnity and indeed all cover, it’s most pernicious qualities, which are that the more you actually need it, ie the bigger your crisis, the least likely it is to indeed protect you.
To be strictly fair to a privatized health care system, although it may linger in the small print, at least such systems in theory make explicit what they will and won’t cover. The NHS has always historically fudged this, and the fact that rationing does, and indeed must occur, has always been rendered somewhat obscure to the public.
Even more alarming, this study in the American Journal of Medicine compared the findings from their previous study in 2001 with this new one in 2007 and discovered that the share of bankruptcies down to medical problems rose by 50%.
Another piece of evidence that this personal and medical crisis is dramatically increasing in the US, and has stealthily reached pandemic proportions without being noticed, is that the authors of this current study point out previous research found as recently as 1981, only 8% of families filing for bankruptcy in the USA did so in the aftermath of a serious medical problem.
Himmelstein and colleagues marshal other data which collectively serve to condemn the US system of health care. They point out that the number of under-insured
increased from 15.6 million in 2003 to 25.2 million in 2007. Of low- and middle-income households with credit card balances, almost a third now use credit card borrowing to pay off medical expenses over time. Debt collection agencies contacted
37.2 million Americans about medical bills in 2003. The irony here is that you are paying for the fees of these debt collection agencies through your insurance premium….
This American Journal of Medicine study also reports that between 2005 and 2007, the proportion of non-elderly adults reporting medical debts or problems paying medical bills rose from 34% to 41%.
The authors of this study conclude that illness and medical bills contribute to a large and increasing share of US bankruptcies. Whatever is wrong with our NHS, it’s certainly the case that one of the boons of living in the UK, which we take for granted, is that we are protected from this nightmare that increasingly haunts the ‘land of the free’.
To summarise, according to this important study in 2007, before the current economic downturn, an American family filed for bankruptcy in the aftermath of illness every 90 seconds; three quarters of them were insured.
Medical Bankruptcy in the United States, 2007: Results of a National Study
The American Journal of Medicine, In Press, Corrected Proof, Available online 8 June 2009 David U. Himmelstein, Deborah Thorne, Elizabeth Warren, Steffie Woolhandler
Dr Raj Persaud is a Fellow of the Royal College of Psychiatrists and practices both in the NHS and in private practice in Harley St. He was voted one of the top ten clinical psychiatrists in the UK by a poll of psychiatrists published in the Independent on Sunday Newspaper and is Consultant Editor of the best-selling introduction to psychiatry for the lay public produced by the Royal College of Psychiatrists ‘The Mind: A Users Guide’ published by Bantam Press. Amongst his numerous academic awards and distinctions include a First Class Honours Degree in Psychology, the Royal College of Psychiatrists’ Research Prize and Medal, The Royal College of Psychiatrists’ Morris Markowe Prize, The Osler Medal and The Denis Hill Prize.