The idea that half of all bankruptcies are caused by medical debt has become part of the common folklore.  But where did the idea come from?  What is the evidence for it?  The claim, first made in a 2005 Health Affairs article, is at variance with four decades of economic research, including a finding that even large medical bills have no impact on family living standards.

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The Employee Benefits Research Institute and Commonwealth Fund have come out with their third annual survey of "Consumerism in Health." This edition is an improvement over earlier versions, though the commentary is every bit as negative as before. Under the headline, "Enrollment remains low," they say that consumer driven health plans (CDHPs) now cover 2% of the population. Yet, they also say that last year's survey found only 1% of the population being covered by CDHPs. This is a pretty amazing finding that should probably be headlined, "Enrollment in CDHPs Doubles in One Year!" more

I used to think that last year's EBRI /Commonwealth study of consumer directed health care (CDHC) was the worst study either organization had ever produced.  I was wrong.  This year's redo takes the honors.

But hey, give them a break.  If all of your health policy views were continually proved wrong, what would you do?  Fall on the sword?  Or produce another study?

For those of you who have not been following the bidding, the latest E&CW report says that people don't like CDHC plans relative to conventional insurance and those who have one are more likely to forgo needed health care.

Here's how the two organizations can save money next year and save a few trees in the process:

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What could be worse than having to pay for your own mammogram?  Being told you can't pay for one, of course.  Especially if the wait for a "free" government scan is measured in months.

Case closed, right?  Not if you're Steffie Woolhandler, who along with her husband, David Himmelstein, has spent years urging Americans to adopt Canada's healthcare system.

A new Woolhandler study finds women are punished by high-deductible, Health Savings Account plans because they have expenses men don't have: mammograms, pap smears, prenatal care, etc.  The study is not available for public inspection.  But for those who can't wait, Woolhandler explained the bottom line to an AP reporter this way: "High-deductible plans punish women for having breasts and uteruses, and having babies."

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Ask silly questions and you get silly answers. This is confirmed by a recent Kaiser poll.

We live at a time when employers are making changes - sometimes radical changes - in their health plans to control health care costs. Many of these changes reduce benefits; but other changes give employees opportunities to manage some of their own health dollars and gain financially from making prudent purchases.

Indiscriminate polling will catch people at different phases of this process. Some people answering the poll will have plans with fewer benefits. Others will be working for employers whose benefit cuts will not come until next year or the year after that. Failure to distinguish among these differences will produce little more than people confirming that more is better than less.

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The idea that more than half of all bankruptcies are caused by medical debt comes from a study by Harvard associate professors David Himmelstein and Steffie Woolhandler, published on the Web in February 2005 by the journal Health Affairs. Both Himmelstein and Woolhandler have long advocated creating a single-payer system of national health insurance in the United States. The purpose of their study was to convince middle-class voters that they need socialized medicine to truly be secure from health-related financial catastrophe.

When the article came out it generated much controversy because the authors used a very broad definition of medical-related bankruptcy. In response, Health Affairs published more than 30 letters to the editor - as well as a follow-up study by researchers critical of the Himmelstein-Woolhandler study's methodology.

Fortunately, a new study by Aparna Mathur surveys the literature and puts matters straight. Dr. Mathur, a research fellow at the American Enterprise Institute, found that only about one-quarter of bankruptcy filers have debts that are primarily medical in nature. Far more common are bankruptcies related to credit card debts.

Read the complete AEI Study.

Read the Harvard/Health Affairs study.

A Commonwealth Fund study in the current issue of Health Affairs finds that high-cost patients with Health Savings Accounts (HSAs) actually spend less out-of-pocket than they would under traditional health plans.  A Bloomberg wire service story treated this as a newsworthy discovery of a “flaw” in design, since if less is spent out-of-pocket, incentives to conserve costs under HSA plans must be weaker. 

The Answer:  There is no news and there is no flaw.

HSA type-plans have been on the market for a decade in the United States and for more than a decade in South Africa.  Everyone familiar with the plans knows that they typically lower out-of-pocket expenses for high-cost patients.  This fact is not only well documented, it has been hashed over in the trade literature, at health care conferences and in numerous think tank pieces, including studies by the RAND Corporation, the Urban Institute, the National Bureau for Economic Research (NBER) and the National Center for Policy Analysis.

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