Patients with multiple chronic conditions are more likely to have high medical debt

Even when eligible for social services, patients rarely recoup the income they have lost due to illness

A study from the University of Michigan looked at the association between financial health and physical health and found that those with more medical debt forgo medical care at higher rates and have higher rates of poor physical health, psychiatric disorders, and all-cause mortality.

Researchers found an association between chronic disease diagnoses and adverse credit report outcomes across all examined outcomes. The more chronic conditions the patient had, the more likely they were to have medical debt in collections, nonmedical debt in collections, delinquent debt, low credit score, and recent bankruptcy. Not surprisingly, they also had significantly greater amounts of debt.

According to the report, medical debt varies significantly across different chronic conditions. Substance use disorders, serious mental illness, congestive heart failure, dementia, and stroke were the conditions with the largest increase in the probability of having medical debt in collections. Among individuals with medical debt in collections, severe mental illness was associated with the largest increase in debt burden, followed by substance use disorders, stroke, congestive heart failure, and liver disease. A cancer diagnosis conferred the smallest increase in rates of medical debt in collections and had less associated medical debt in collections than other chronic conditions.

Researchers also found a negative association between age and adverse credit outcomes, with younger age groups experiencing negative outcomes more often. Women were also slightly more likely than men to have an adverse credit outcome.

The study notes that not all causality can be shown. “Some portion of this association is likely explained by poor financial health leading to the development of additional chronic conditions, while another portion may be due to chronic disease causing additional financial burden and worsened credit outcomes,” the study reads in part. “We find that both medical and nonmedical debt in collections rise with increased chronic disease burden, although medical debt in collections rises faster, suggesting that both direct costs (the out-of-pocket expense of medical care) and indirect costs (effects of illness on an individual’s ability to earn income) may have important associations with adverse financial outcomes.”

Researchers note that if further research shows that 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. “If 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 study reads in part.