If a healthcare organization wanted to help patients in financial difficulty, what would be the best route?
Should they be asking patients to demonstrate financial need by filling out forms and sharing tax returns, then waiting to hear if they qualify?
Or could they just find out what medical bills these patients already have and pay them off?
Last week, SCAN and CareOregon went the latter route, granting $345,000 to RIP Medical Debt, a national nonprofit that works to pay off the debts of those with financial burdens. The 2 health plans, which announced their intention to combine as HealthRight Group, specifically targeted debt in the areas they serve in California, Arizona, Nevada, Oregon and Texas. According to a joint statement from the plans, the effort targets those with household incomes at or below 400 percent of the federal poverty level or those with health care debts that account for 5 percent or more of their annual income.
The move helps affected patients, but also highlights what is wrong with healthcare right now, said Sachin Jain, MD, MBA, president and CEO of SCAN Group and Health Plan. While SCAN and CareOregon have consciously chosen to retire debt in the areas in which they operate, the debt that is paid off may or may not involve its own patients.
How the debt was incurred is not the issue, Jain said.
It’s meant to be a wake-up call for our industry, Jain said in an interview with The American Journal of Managed Care. Somehow we landed in this place, where people are really scared to access medical care; they forgo necessary medical care because they fear they might get a bill they can’t pay.
His claims are confirmed in a recent Gallup poll and research by the Kaiser Family Foundation; a KFF survey in March 2022 found that 43% of adults reported that they or a family member had put off medical care due to cost issues. Such dysfunction in the health care system has both moral and clinical consequences, Jain said, because people who forgo preventive care or delay care until symptoms are severe end up costing the health care system more money.
We have a real accessibility crisis in America right now, Jain said. Even those of us with really good insurance are a little wary of going to the doctor or hospital, due to the messed up medical billing system and aggressive tactics many healthcare organizations are using.
In discussing why SCAN and CareOregon have pursued this initiative, Jain referred to reports in The New York Times about non-profit hospitals that have been chasing patients to pay off balances that should have been eligible for charitable assistance programs. This kind of cheating isn’t why he went to medicine.
As an industry, most of us who started in healthcare, most of us who work in healthcare, didn’t get into these professions to put people in debt, he said. We enter these professions to help people. And so that’s what we’re most excited about.
When the idea of medical debt relief was floated by a plan executive as a way to help patients in SCAN and CareOregon’s service areas, Jain said the reaction was uniformly positive. As soon as it was the rumor, it was, yeah, we have to do this. This is an issue that confronts us every single day, both as healthcare executives, but also as people who understand how difficult it is to access the healthcare system.
She continued, just think about what situations put people into medical debt. It’s not like someone goes to a health institution and says: I want these services. And then they say, I don’t want to pay for them.
Ordinary people are in emergency situations and need treatment, Jain said, and then, 6 to 8 weeks later, they get a bill for an astronomical amount that they simply aren’t able to pay.
Jain pointed out that today many Americans are enrolled in high-deductible health plans (HDHP) through their employer, with the idea that they should be encouraged to be better health care consumers. But in many cases, she said, people don’t have the knowledge to be good health care consumers—they don’t understand, for example, that when they see billed charges they can call and get a better rate.
Instead, they’re loaded with bills, and then sometimes they’re sent to collection, and then they’re sent to second-degree collection, Jain said. And then the next time that person needs treatment, he might think twice because he doesn’t want to repeat the cycle.
Healthcare is one of the biggest expenses people have in their lives, she said. It is also one of the most likely reasons they fail. We have to fix this.
Indeed, the link between medical debt and bankruptcy has been documented for a generation. In 2005, authors publishing in Health affairsincluding Harvard law professor and now US Senator Elizabeth Warren, found that about half of bankruptcies were the result of illness or injury, and especially out-of-pocket costs. The Affordable Care Act eliminated cost sharing for many preventative services to remove barriers for patients; however, other costs must initially come directly from the HDHP, which can be a deterrent to seeking treatment if the HDHP is not combined with a health savings account.
One appealing aspect of the SCAN/CareOregon initiative is its simplicity. While financial assistance or Medicaid programs often require patients to qualify in intervals, this action simply pays the bills and sends patients a letter. And it comes at a time when the end of the COVID public health emergency is causing many low-income patients to fall out of Medicaid rolls because states are restoring barriers to entry.
Patients of color and those on low incomes are more likely to have medical debt, Jain said, and these actions won’t help.
Medicaid is one of the most important public programs we have and it’s a huge source of coverage, he said. There are some states that are intentionally trying to make it difficult for people to enroll in Medicaid. Our hope is that we take a careful look at this as well, as this is a big part of how people actually end up with medical debt. They are not covered, either by the public program to which they have access, nor are there any unnecessary barriers to effective access to these programs.
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