Financial Toxicity and the Cost of Hospitalization

In healthcare, we use the word “toxicity” when it comes to taking a new medicine, especially a strong therapy to cure cancer. The concept of “financial toxicity” for cancer patients was raised by concerned clinicians at Sloane-Kettering Medical Center, who discussed the topic on 60 Minutes in 2014 and have published papers on the issue.

From Health Populi:

Beyond strong medicines, a new financial toxicity has emerged for patients due to hospital inpatient admissions. A new article in the New England Journal of Medicine studies Myth and Measurement – The Case of Medical Bankruptcies written by four economists from UC Santa Cruz, MIT, and Northwestern University.

The “measurement” named in the title is graphed here as the proportion of people who filed for bankruptcy relative to years before or after hospitalization. The data points come from one-half million people who were hospitalized in California between 2002 and 2011 and tracked in credit reports which included information on whether and when the patients filed for bankruptcy.

The graph illustrates the effect of hospital admission on bankruptcy, with the rate of bankruptcies increase in the years after hospital admission, both one and four years after the admission.

As a result, arguing that health insurance coverage doesn’t improve health is simply inconsistent with the evidence, the three researchers conclude.

For more information on the issues surrounding medical debt, please contact RIP Medical Debt.