It is presently in vogue to blame most any problem or set back on health care costs. And why not? After all, telling Americans that they are one illness from being bankrupted and landing on the street is an effective strategy for getting them to support your solution. A couple weeks ago, I explained in depth why you should not trust statistics that claim that more than 62 percent of bankruptcies in the US are medically linked. But there is another statistic that is popping up here and there, that 1.5 million Americans will lose homes this year due to medical costs.
This number comes from an article by Christopher Tarver Robertson, Richard Egelhof and Michael Hoke published last year. You shouldn’t be surprised that the authors thank Elizabeth Warren, one of the authors of the flawed studies on bankruptcy and medical bills, because they have made precisely the same mistakes.
First, the authors report that 49 percent of the people surveyed, all of whom were on the brink of foreclosure, said that the situation “was caused in part by a medical problem” (emphasis original). Of this group, 32 percent cited illness or injuries, 23 percent pointed to high health care costs, 27 percent indicated time off from work, and 14 percent mentioned time spent taking care of someone else in their family.
The authors then add those who meet a host of other criteria to reach a total reported figure of around 7 in 10 foreclosures being caused in part by health care costs. Again a low threshold of medical bills ($2,000) and being out of work for two weeks in the last two years are among the criteria used to classify addition foreclosures as medically linked.
To begin with, it is unclear what exactly the first category, “illness or injury,” covers since both the costs and the lost wages that are the financial consequences of ill health are included separately. The $2,000 threshold is far too low to meaningfully measure whether medical bills were a serious contributor, especially in the absence of information about other debts and costs. Nor is this above the average out of pocket health expenses for a typical American family. And, as I have argued before, time spent out of work, whether for one’s own illness or to care for someone else, is not directly linked to the health care system but to larger social policy issues.
Second, the study also includes gambling, addiction, birth, and death in at least some of the calculations of which foreclosures are health care related. The health care expenses associated with the latter two belong with other medical costs. The expense of treating the former two could arguably be included as health care costs, although this is debatable, but the money squandered on such habits certainly should not be.
Third, the study relies on self-reporting by the home-owners and had a very low response rate (about 7 percent) or 128 responses, creating significant potential for bias or over reporting. Attempts to control for this were inadequate and rather cursory. Finally, the article looks at only four states and then generalizes from them.
As in the case of bankruptcies, other studies have shown significantly different results and the authors admit that “most debtors cited one, two, or three other, completely distinct causes of foreclosure.” Given that the people surveyed are those already stretched by multiple debts and expenses, placing blame on medical costs is simply inaccurate in many, many cases.
You can read the whole article here.
