From MIT News:
Being hospitalized is tough enough strictly as a health matter. But now a study co-authored by an MIT professor reveals its painful financial impact as well: On aggregate, hospitalization and the health problems that cause it lead to a 20 percent drop in earnings and an 11 percent drop in employment for adults between ages 50 and 59, among other negative effects.
Moreover, job troubles are merely one of the financial costs that follow hospital stays. As the study shows, adults who have health problems leading to hospitalization have worse subsequent access to credit — as well as larger unpaid medical bills and more out-of-pocket medical spending.
And while medical insurance does temper some of these outcomes, the long-term financial hurt of a medical event serious enough to cause hospitalization is significant even for the insured.
The paper, “The Economic Consequences of Hospital Admissions,” has just been published in the latest issue of the American Economic Review.
The findings are striking:
The average hospital admission in the study lasted four days. While the length and long-term effects of any one medical event can vary widely, the aggregate effects were striking. Consider the employment numbers: Having medical problems that require a hospital stay reduces employment by 8.9 percentage points in the first subsequent year, on average, and 11.1 percentage points by the third year after admission.
That corresponds with an average decrease in earnings of $6,445 in the first year after a hospital admission, and $11,071 in the third year. Over the whole three-year span, earnings drop an average of $8,753 annually, a decline of 20 percent.
Three years after their hospitalizations, employees also face a decrease in annual time worked by 228 hours, and self-reported retirement increases by 10 percentage points. All the employment numbers are striking, the researchers say.
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