Podcast: Authors of ‘End Medical Debt’ Discuss the Problem — And Their Solutions

Quick business and health question: How much medical debt exists in this country? Keep in mind, the U.S. is one of the wealthiest countries in the world. In fact, the U.S. spends more per capita on healthcare than any other country. Well, the amount according to RIP Medical Debt will blow your mind: $1 Trillion.

What can be done about it? That’s the subject of this conversation and a new book, End Medical Debt: Curing America’s $1 Trillion Unpayable Healthcare Debt. The book is an extraordinary exploration of not only how this problem evolved, but also how it brings down the individuals and families burdened with unpayable debt. The authors explain how the system works or, more often than not, doesn’t work. They also offer their own views on how we can get out.

The authors come from wildly different perspectives, all in the business or healthcare field. Jerry Ashton brings more than 40 years of experience in the credit and collections industry. Robert Goff spent an equal amount of time in the healthcare industry itself. Craig Antico is a financial industry leader in collections, debt buying, outsourcing, and consulting. They are the cofounders of RIP Medical Debt, which locates, buys, and forgives medical debt on behalf of individual donors, philanthropists, and organizations who provide financial relief for people burdened by unpayed and unpayable medical bills.

Here’s how it works. RIP seeks out distressed medical debt in the collections industry and the community of medical providers, including hospitals and medical practices. RIP offers to buy this debt for pennies on the dollar, which is how RIP can make such a significant impact. The average ratio is 1 to 100. That means a donation of $50 can buy back as much as $5,000 in medical debt. $1 million can buy $100 million in debt.

Here’s the punchline. Once this debt is in their possession, it’s abolished as a gift from RIP to the patient, no strings attached, a gift made possible by complete strangers, people bailing out people. It’s a simple, powerful solution to an incredible problem. Check them out at ripmedicaldebt.org. Now here’s my conversation with Jerry Ashton, Robert Goff, and Craig Antico on their book, End Medical Debt.

Transcript: Jerry Ashton, Craig Antico & Robert Goff on ‘End Medical Debt’

Chris Riback: Jerry, Robert, Craig, thank you all for joining me. I want to dive right into the book, but I want to start with the extraordinary subtitle: Curing America’s $1 Trillion Healthcare Debt. How in the world is there $1 trillion in healthcare debt in this country, and how in the world is it unpayable? Jerry, why don’t we start with you?

Jerry Ashton: Well, actually, the person that’s really good at this is Craig Antico, given our background in the collection industry. The word “cure” has a particular ring to it with how it’s applied, right?

Craig Antico: The interesting thing is, even if you look at this past year alone, the amount of medical debt that was created by the hospital systems that is unpayable and is not paid, it’s about $220 billion just this year alone.

Chris Riback: Wow.

Craig Antico: The way that’s calculated is after the insurances have been paid and you just have the amount that’s left that you owe, or if you didn’t have insurance, the self-pay part. If you take that full amount, only about 55% of that amount is paid each year. That’s all that can be paid of it. What remains is the unpayable part that gets placed for collection and placed for collection and placed for collection. That adds up to, just the hospitals alone, $220 billion a year. So it doesn’t take many years, $220 billion to add up to $1 trillion.

Jerry Ashton: Yes. And if you take a look at the word “cure,” from the collection agency point of view, that’s a euphemism that they use for actually collecting that debt.

Craig Antico: Or crediting it. Right.

Chris Riback: Or figuring out some way to capture it. This seems like such a simplistic question, and I don’t mean it to be. But how in the world can a system exist, how can a system go forward, when either the costs are that out of whack with what people can pay or where there aren’t appropriate payment mechanisms to compensate for the costs that are required? I mean, as Craig just said, 220 billion a year, pretty soon that becomes real money.

Robert, how does a system like that exist?

Robert Goff: Well, it exists because of what’s known as cost shifting. What you have is those people who are unable to pay incur the debt, which is a drag, obviously, on them. Those providers who provide those services have that unpaid debt. It’s a drag on them. Now, some of the providers, in particular the hospitals, have access to funds to help offset that in their governmental reimbursements, and funds are made available in their rates as those are being set up, as well as, for those hospitals that are fortunate enough to have large commercial bases, they will demand higher reimbursement rates from the commercial plans to make up the difference and to give them margin.

Let me explain it this way. A hospital is paid principally by Medicare, Medicaid, and commercial insurance. Medicaid is set by the state. The hospitals really … They will say they lose money, and they’re probably losing a little money on their Medicaid rates. Medicare rates, government set. Most hospitals are making a little, breaking even on that. The difference, then, is what the hospitals are able to demand and command from the commercial payers. What they demand is not only to cover deficits they have from the others but also to create their margins.

So what you see is those hospitals who run into financial trouble are those who do not have a big commercial base where they can demand additional funds. The fallacy, of course, is as hospital rates go up, that’s passed back on to the insurance companies, which turns into higher premiums, which makes it harder for the purchaser, be it the employer who’s buying it for the employees or the individual, to then maintain a good-quality benefit plan, pay affordable payroll deduction, or even copays and deductibles on the individual.

For the physician who is not employed by a hospital system … Employed physicians of course have their costs going through the hospital. But those in private practice, this is why you see physicians abandoning certain communities: because there isn’t enough of a commercial base where they can offset losses from non-paying patients.

Chris Riback: Craig, as you look at the numbers and the problem that Robert just described, the core of it, the structure and how this is even possible, as you look at the numbers and that 220 billion a year that you just mentioned, is it getting worse? Are these numbers getting worse over time if we looked back 5, 10, 20 years ago?

Craig Antico: Oh, certainly. Certainly. Certainly, these are much worse than they were 10 years ago. We’re doing more cost shifting, as Robert was talking about. And the deductibles, for example, are much higher as a percentage of their outstanding expenses. So people actually are taking plans that are low cost at the front, but their deductibles are so high that they end up paying or having to owe every dollar of their expense in a year. Many of these people are not even hitting their deductibles. Before, you used to hit your deductible.

Now, maybe Robert knows the number, but there are a lot less people are hitting their deductibles. I hear it from the doctors all the time: “We can’t even get paid because people haven’t even hit their deductibles yet.”

Robert Goff: Let me pick up on what Craig just said because I think it’s a very interesting point.

What we’ve done is, with the reintroduction of deductibles and now sizable deductibles … So health reform expanded Medicaid. Terrific. Wonderful. More people became covered by Medicaid, supported by taxpayer dollars. Medicaid has no copays, no deductibles, and the most wonderful benefit package around. Unfortunately, to maintain the affordability of the taxes that support it, the payments to providers are on the low side, which means there are many providers who don’t want to take Medicaid.

People with money have never had a problem. But what we did is health reform brought that, endorsed, and, if you will, normalized deductibles for the working middle class of this country. We used to have employer-based health insurance which had nominal deductibles, $200 a year, $500. The normal deductible now up there is about $2,000. And you have employers that, to keep the premium down, they put in 5 and 10 thousand dollar deductibles. That’s hitting the middle class, which used to be protected by largely employer-based insurances.

Now, those deductibles, it used to be you didn’t get the deductible into those higher dollars until you ended up in the hospital. Now the care that’s being provided by physicians before hospitalization is all subject to the deductible, which has taken that collection process and dropped it on the physician and is actually one of the reasons that many physicians are pulling out of private practice: because they’re chasing patients for dollars. They can’t collect. They say, “Gee, let me go become an employee of a hospital, and then it’s the hospital’s problem to collect because then I don’t have to worry about it.”

Jerry Ashton: I’d like to add to that that no doctor ever went into a medical practice to become a bill collector. And because of the onerous system that we have … And, by onerous, I can describe it statistically as being a medical system that will allow 60% of all bankruptcies to be medical debt related. I can describe it as being a system in which 15 million Americans this year will deplete their savings to pay off medical bills, and the poor doctor who’s doing his best to serve the public and to cure people ends up having to surrender his practice or turn into a bill collector, much like Craig and I were when we first entered into our business life.

Craig Antico: You talk about unpayable and you look at the word unpayable, and you say, “What does that mean, that it’s unpayable?” People can actually pay even more than they’re paying now. What happens, though, is they go into hardship or they go into what we call material hardship. Hardship is where you’re just not able to pay your bills.

Now, those bills could be, “I don’t want to go to the doctor to pay that bill.” “I’m not going to pay any past bills.” It could be, “I’m not paying my rent,” or, “I’m not eating as much.” That’s the only reason these people can’t pay, is because there’s other necessities that are precluding them or they’re a higher priority than paying these medical bills.

Robert Goff:  Echoing what Jerry and Craig said, there are a couple of figures that just came out recently. People with diagnosis of cancer, 43% of those people expend their entire financial resources within two years of having the diagnosis of cancer. And a person diagnosed with cancer is nearly three times as likely to file for bankruptcy.

Craig Antico: It’s not uncommon, for example, with the toxicity of debt related to cancer, for people to be paying 5, 10, 15, 20, 30% of their gross income, gross income, on out-of-pocket expenses for the care or the pharmaceuticals that they’re using. There’s research that shows when people go start spending two and a half percent of their gross income that they become in hardship. Can you imagine what kind of hardship we’re talking about when you get to be 20 and 30% of your gross income going toward that illness or accident?

Chris Riback: Well, it’s untenable when you get to those types of numbers, and it’s what you described. You just described the percentage of bankruptcies that are related to medical debt, and you’ve described the number of people who are in that type of debt and the amount of debt that they face. It’s no surprise that the three of you have come up with a couple of ways to try to address this.

One, of course, is RIP Medical Debt. That is your nonprofit that is doing the work to try to help people pay off their medical debt. And another is the book that you’ve written. That’s what we’re discussing today, this book, End Medical Debt. If you would, I think it’s worth taking a moment because you’re giving the context here, and you’re giving the framework. Part of the framework that matters in this story, as well, is your stories, the three of you and how you came together.

Jerry, maybe you start. How did the three of you come together on this problem?

Jerry Ashton: Well, somehow, by divine providence, the three of us found each other, and primarily in the world of collections. In my case, I had a consulting firm called [TFO 00:14:35] Advisors, which was joined by Craig Antico, who himself came from a family background … His family was in the collections industry. Both of us served people such as Robert Goff, who at that time was the executive director of the NYU Physicians’ Association.

So here are two bill collectors joining in with a man with significant credentials in hospital and caregiving who’ve decided to write a book called End Medical Debt. It sounds almost impossible that, number one, we would join forces in this, but even more importantly, that we actually feel that medical debt can be abolished. So I’d like to have Craig tell you a bit about his feelings and then Robert. And this is why we came together to do the book.

Craig Antico: Well, as Jerry said, Jerry and I worked together in the early 2000s. We were innovators then. Jerry is a visionary himself, and he just came up with a way of collecting accounts and just making sure that they don’t even go into collection if they didn’t have to. And it just resonated with me. Jerry decided after about five or six years of working with me that he’d better retire. So he retired.

He was the one that introduced me to a group of people that came up with this idea. Do you think collectors could have ever come up with the idea of abolishing debt? That’s out of our thought! There’s no possible way we are going to think of, “Let’s abolish people’s debt that can’t pay it.” We’re just trying to figure out how to get people to pay.

So when Jerry came to me and said, “There’s this nonprofit group called Occupy Wall Street, and they have an idea. I want you to listen to what they have to say.” I’m like, “Jerry, I’m not interested. I don’t want to come down there. I’m not a volunteer for them.” Well, I decided, “Let’s come and help see what I can do.” I went down to this meeting with these groups of people that came up with this idea, and I did think it was a crazy idea. I probably had different words to put to it.

But once I started to help them … And I’m using the same systems I used before. I’m using my collection system. I’m using data to identify the people that need the help. I’m working with all the relationships that I’ve had for 25 years of debt buying, and I said, “Would you mind selling us that debt that you’re having trouble collecting, but I know you’re going to try to collect on for the next 5 to 10 years? Why don’t we just buy it from you?” We got a few people to sell, some companies to sell it to us.

Jerry Ashton: I’d add, Craig, at that time, the organization was called The Rolling Jubilee. The jubilee was taken after the ancient practice of having a celebration every 5 years or every 50 years. It was people were relieved either of debt or relieved of being slaves. So when Craig heard about this and the fact that what The Rolling Jubilee wanted to do was to create a 501(c)(4) so that they could buy and abolish medical debt, that was a bit astounding to begin with. But he is the one who brought the technical expertise as well as the professional contacts that made it even possible.

Craig Antico: But we thought they were only going to raise about $1,500, $1,000 dollars. Instead, they raised over $700,000.

Chris Riback: Wow.

Craig Antico: It really resonated with people. Now, the people are angry with the system, and I sure can understand why they’re angry. If there’s so much debt and you can’t pay it, there’s two things that are at play here. One is it’s private. Your debt is private and your illness is private. And now you have nowhere to go. You can’t ask friends for help. A lot of times, you won’t ask. So you suffer. You suffer yourself. But it resonated with people.

We ended up abolishing almost $40 million of debt. After about the second year, they came to me and said, “Craig, we’re going to close down shop.” I’m like, “What?” Jerry and I looked at each other and we said, “We can’t let this happen.” So the why is that we were doing so much good, but it was going to be taken away from us. We weren’t going to be able to help people.

Jerry Ashton: That’s how we managed to drag Robert Goff into the thing.

Chris Riback: How did you get involved, Robert?

Robert Goff: Jerry was trying to sell me collection services over a period of time, and he had a little different approach. I was working with a group of 2,500 physicians in Manhattan, largely associated with NYU and probably the most remarkable group of physicians I’ve worked with in my career because their interests were so much so patient care that they were suffering from a problem that we ended up naming head and heart.

In their heart, knowing these patients, treating these patients, knowing not only the stress of their illness and what that was doing to them and their family emotionally, but also what was happening financially, physicians were having a great deal of difficulty pursuing patients with the balances. “How do I pursue the patient to get paid? But I don’t want him to stop coming in and see me because I’m more concerned about their health than I am the dollars.”

On the other hand, in private practice, the expenses are going up. The reimbursements are going down. “If I don’t collect this money, I’m not going to be able to remain in practice.” So physicians have struggled with the head and heart problem, and Jerry and I had some long conversations about, could you structure a collections methodology that identified those patients who had the resources to pay and were just dodging it from those who would be glad to but didn’t have the resources, since the physician would know, “Gee, these are people I’ll accept the hit on because that’s part of my belief system, my responsibility, and obligation to them as patients, to myself as a physician”? And to those that do have the resources, great. We’ll try to collect from those.

That became how I got involved with Jerry and Craig was, could you create that more intelligent way of collection rather than trying to just beat up and threaten people who couldn’t afford to pay even if they wanted to?

Jerry Ashton: That’s where the creation of RIP Medical Debt came into existence once Robert and Craig and I looked at what we were able to do with what limited resources we had. So on July 25th, 2014, we founded RIP Medical Debt as a 501(c)(3). It was founded on the principle that people truly had to be in need of charity and not just forgiven for any reason whatsoever. It wasn’t like they went out and bought a wide-screen TV and decided not to pay on it. These are people that came down with serious diseases or accidents. They needed the help, but were they really able to pay or were they in need of help?

So we had three criteria. If they meet one of the three, or all three in some cases, we do our best to raise money to go out to debt markets to buy their debt and then forgive it at no obligation to them. The three criteria would be, number one, are they two times the poverty level or below? Number two, are they insolvent? Or, number three, as Craig described it, are they in hardship, meaning that they’re paying, say at a minimum, 5% or so out of pocket of their annual income just for medical expenses?

Craig can elaborate on that a little bit more.

Craig Antico: Yes. It’s not necessary to elaborate. It’s pretty clear.

Chris Riback: I agree. Let’s move from that, and it’s remarkable work that you guys have done in such a short time, as well, since just 2014. In terms of the book, which is a prescription or many of your views in terms of how to tackle this problem and how to … You’ve set the bar pretty high. The goal is, as the title says, end medical debt. You’ve taken a unique approach. Each of you have written different chapters, although I understand that you all then read each other’s work after it had been written but that you wanted each of you to take your own turns at the various sections that you address.

I’ve got a question for each of you around something that you wrote that really struck me. Craig, I’ll start with you. You wrote that debt mountains cause healthcare deserts. I think I might know what you mean from that by what Robert said earlier about folks leaving areas and regions where they can’t get paid. But why don’t you explain what you mean by that, that debt mountains cause healthcare deserts?

Craig Antico: Sure. It originally didn’t have anything to do with the healthcare deserts caused by fleeing doctors, but I think we could add that to it because it makes a tremendous amount of sense. There are so many doctors that can’t afford to even practice. They have the same amount of student loans that the guys that are specialists have, or the gals. And yet they’re in the hardest-hit areas, the highest poverty levels. And it’s a danger.

What this was really working toward is talking about the social determinants of health. Now, social determinants of health might be something like, are you isolated and have no resources? Are you impoverished? Do you have no food? A food desert is a social determinant of health, meaning are you not near healthy food, for example? That’s a play on words, saying a healthcare desert. Is it, are you not accessing care? It’s not even about there’s no physical doctors or not many hospitals in your region.

Chris Riback: Wow.

Craig Antico: Are you now precluded from reaching to them? Do you have access to them anymore? If you owe a hospital $10,000, do you have a second thought before you go to the hospital? What if it is the only hospital in the region? Does that mean you’re not going to go? Yes, unfortunately. It does mean that. If the doctor that you’ve been working with for three or four years, now you have a gigantic bill there, not only might they not be willing to take you in, you might even be willing to call them. So that healthcare desert means access to care.

Debt mountains, well, kind of like the debt spiral except that the debt just keeps piling on and piling on. People talk all the time about, “I got this bill and then I got another one. I thought I had already paid all the cost of this healthcare visit.” Well, no. You didn’t pay the anesthesiologist. That might be a surprise to you. You didn’t pay the … The doctor charges separately. That doesn’t come from us. “Well, I thought he worked for you.” “No. He’s in his own private practice.” So it’s a confusion.

So this debt mountain starts to increase. The reason I use “debt mountain,” it was more of a physical thought. But is debt itself … And we’re caring about medical debt. Is it a social determinant of health? Does it determine your health, your wellness? We think we’re going to find out because we’re doing research with some of the top universities in the country, MIT, University of Chicago, UCLA, and UC Berkeley. They’re doing an impact study.

At first, it’s an impact study of this access to care we talked about. Is the debt causing a problem with access to credit? Is it causing access to care as a problem? Eventually, we’re going to find out whether it’s actually causing illness. We think it does already. We know that if you get too much debt and you can’t pay it, it causes such stress and it affects your health. We need evidence of that. But that’s where we came from with that, is debt mountains and healthcare deserts.

Jerry Ashton: Well, that’s true. And, if you notice, the emphasis that Craig and I and Robert Goff have in our chapters differ, a little bit like our own personalities and even our own philosophies in life and sometimes politics. Craig is certainly more interested in a system which doesn’t create hardship, which means we do something about changing the system. Robert is oriented more towards the fact … and this could be misquoting him, and he’ll tell me … that no matter what you do about the system, nothing’s going to change if you can’t address the issues of healthcare cost.

In my case, I look at the socialist issues because I’m more of that orientation. What is the impact on society? What does it mean to have billions of dollars of income loss because people have become caregivers and can’t even work? What does it mean for a society in which people have to make a decision as to whether or not they want to fill that prescription or pay the bill collector? So those impacts are of interest to me.

Chris Riback: What’s your answer, Jerry? What do you believe, from what you’ve seen, is the impact on society?

Jerry Ashton: Any system … Well, let’s take a look at the United States. We’re the only industrial nation that does not have universal healthcare for its citizens. We’re the only country in the world which allows its citizens to go bankrupt just because they got sick or injured. If you take a look at where we stand in relationship to cost versus benefit, if you take a look at where we stand as being a healthy nation, when you take a look at the life expectancy of Japan being seven years more than here in the US, if you take a look at the happiness factor that people search and research, and they’re always in countries in which people do not have the stress of medical debt, the stress of student loan debt, the stress of debt of necessity. This is a perfect time to cue up Robert Goff.

Chris Riback: Yes. In fact, it is, because, Robert, a line of yours that you wrote that I wanted to ask you about is you wrote that medical debt is the enemy of everyone. A lot of folks might think that, well, medical debt is a terrible problem, but it’s a terrible problem for people who have it. You write that it’s the enemy of everyone. What do you mean by that?

Craig Antico: We view healthcare services as a vital resource in the community. So for the individual … And we have an odd thing because we fund that vital resource by making it an individual responsibility to fund it when they become sick. Well, if we in this country don’t believe people should die on the street, therefore our healthcare system takes care of … A bill is created. If they individually cannot afford to pay it, do not have the resources, then that debt becomes everybody else’s problem.

It may result in the closure of a hospital or the closer of a physician practice, in which case the community loses. Even if it doesn’t, the cost that has been provided in care has to be borne by everybody else. So it really comes back to haunt everybody because we believe this is a vital service that should be available to everybody. Now, there’s a line that’s used in healthcare: healthcare is one of those things which everybody wants everything and nobody wants to pay for it.

Well, I won’t go that far. But we all want the services to be available. When the individuals who use them can’t afford to pay for them, that cost is borne by everybody else in the community, or that resource is abandoned, is lost.

One interesting thing, what Robert was saying, he’s talking about everybody supporting each other but in a different way. It’s like Jerry might say, “Let’s have it all paid by taxes,” so that when someone does have a problem, it’s there for them, and that they don’t have to have an undue shock to pay them. It’s paid for all along.

We know that there’s a big disparity between some people that have resources and others that don’t. That’s why $55 billion as lenders are given to friends and family for medical expenses each year. But the other side of the coin is there’s a lot of people that don’t know how to access that, don’t have ability to access that, so they need support. We can’t let people just go without any support and then expect them to pay the bill. It’s too stressful.

Chris Riback: One of the groups of Americans that are not getting support … And what you guys have put together and revealed and connected is shocking and disturbing to anybody. But there’s a group that you’ve focused on, as well, that I think induces particular anger and frustration, and that’s about veterans. Jerry, you wrote about this in the book. I know you all have been active in it and in caring about this.

Most of us wouldn’t consider that veterans could have a problem with medical debt because, after all, we all might think, “Well, they have access to the VA.” But, instead, veterans face extraordinary levels of debt. Jerry, how does the system not work for them?

Jerry Ashton: I don’t think we have enough time in the podcast to list them all, so I’ll just hit some high points. Let me tell you also that this is one of the chapters that I had a hard time writing because I was so angry. I’m a veteran myself. Spent four years in the navy, a navy journalist. Discharged, did my job, went back to civilian life, went on to college. I never thought about whether or not I earned or deserved any medical care in the future. I was simply busy taking care of myself. I was fortunate enough to have an income for many years in which I never had to concern myself with medical debt.

Well, Craig Antico and I, when we were starting out RIP Medical Debt, began to notice that a lot of people mentioned that they would like to see medical debt taken care of. Or were we addressing veteran medical debt, debt for the military people? I didn’t understand what they were talking about, and I was a veteran. So he and I had a reason to go down to Washington, DC, a couple of years back. And we had the chance to meet with a House subcommittee on veterans’ health.

Craig and I sat in a large room with only one person that they assigned to us, and it looked like there wasn’t much to talk about until, at the end when we were going to leave, she says, “Oh, by the way, the VA just happens to have a practice of not paying for emergent care, and then veterans are subject to paying emergent care.” Craig and I looked at each other and said, “What does emergent care mean?” Well, emergencies. If I’m picked up by an ambulance and I’m taken to a hospital and I’m a veteran, if I’m not taken to the VA, that is going to be denied. If I go to a hospital on a weekend … And, by the way, the VA does not have emergent care, much less on a weekend. So if I go on an emergency trip to a hospital as a veteran, that bill that comes out of the emergency ward is my problem.

That happens to be, over the last 10 years, $6 billion of medical debt burdening American veterans right now.

Chris Riback: Yes.

Robert Goff: It happens every year. Over 90,000 vets a year, to the tune of about $3 billion a year now, have their emergency room visits denied. It’s even gone to veterans’ court. So it’s official. They’re not paying. And who pays? Well, the sophisticated places actually eat it. They don’t bill it out to the VA member. But in many, they don’t have a choice. They have to get paid somehow, and they’ll go to the veterans.

Chris Riback: My speculation is that anybody listening to this is asking themselves, “What can I do?” What can people do to help? Robert, why don’t we start with you? Obviously, there’s one answer, that folks are of course free to support RIP Medical Debt. So maybe that’s a thing. But, broadly speaking, because this is such a systematic, systemic, societal problem, healthcare problem that you’ve identified, what can people do?

Robert Goff: On an individual basis, there are a number of things people should be doing because when I come across individuals and get involved in individual situations, I find that it starts, to a large degree, with a lack of understanding of the limitations of their health insurance plan. What is their coverage? What does it cover? What doesn’t it cover? What are the copays? What are the deductibles? What are some of the nuances? So that when an individual says, “Gee, I went to the doctor and I didn’t know I was responsible for the bill,” well, you’ve got to know those things.

It also means that if you have a plan that has a deductible, you have to plan for it. I realize some of these deductibles are very large, but you have to plan for adverse situations in your life. Now, the idea and the recommendation used to come up to try to put aside three to six months of income in the event of unemployment or something else. Well, that’s a very real and personal financial plan.

The second part in terms of knowing that benefit plan is, know what you can do within it to protect yourself from inappropriate costs. For example, many plans have limited access networks where you must go to in-network physicians to have coverage. Well, then, I hate to say it and I know how hard it is. When somebody’s sick, they want to become well. They want to get what they need immediately or for their children immediately.

You have to watch out and make sure that the physicians and the hospital or whatever the provider is in your network. That means ask. That means look it up on the website, on the health insurance plan. Make sure that you don’t inadvertently put yourself in the position where someone says, “Oh, I’m not part with your plan. Therefore, it’s your problem, not your insurance’s plan.” And the insurance company says, “Okay. Your benefit plan doesn’t cover it.”

Also, be very much aware that you can reduce the cost of healthcare that you are exposed to, such as when it’s a recommendation for laboratory work. Make sure that you do it in an in-network lab that is not a hospital lab. Hospital laboratory costs can be 300% and higher than a private clinical lab. Same outcome of information. Same thing with imaging practices. Now, if you go to the hospital’s outpatient radiology department and you have a copay associated with that, you’re going to pay much more than if you go to a participating non-hospital owned.

So you have to become a real consumer and watch these things and question these things. Most physicians look to treat you and treat you according to their historical pattern of referrals. You need to challenge that. When you do, most physicians immediately will say, “Sure. We’ll be glad to help you find a participating radiology group other than the hospital I usually go to.” But you have to become aware of that.

And, of course, we have to take a look at ourselves and what we do to ourselves to avoid sickness. There’s a lot we can’t do because it’s genetic, but whether it’s smoking, abuse of alcohol, abuse of drugs, other unsafe practices, we’ve got to get smarter about that because the best way to avoid the healthcare costs is not to get involved in the healthcare system by staying well.

Craig Antico: Considering that about 30% of the accounts that we buy from the debt buyers that buy debt … It’s qualified for charity care. Now, people don’t even know that they are able to get help for a bonafide illness. They go to the emergency room. They can’t pay. They get charity care. They have to qualify for it. It’s very similar to the qualification that we use, which is are you making less than two times the poverty level or below?

33% of the country makes less than two times the federal poverty level. That’s like a third. So a third of the people that go to the hospital, or maybe more, actually qualify. And a third of those people that go don’t get it. So it’s odd that they don’t choose to take the charity care. You have to know right now, today, what is my federal poverty level? Bingo. Go to Google. Look it up. We make $60,000. We have four children. We’re right on the poverty level. Holy cow. We could even qualify for charity care. We got to know it. You got to know your charity care.

The other part is people should not pay more out of pocket than will make them fall into hardship. It’s their responsibility to not pay a bill that they’ve incurred. Don’t pay more than you can pay. My wife is a Yoga teacher. Don’t stretch more than you can stretch. You have to be true to yourself. Don’t spend more than 3, 4, 5% of your gross income on out-of-pocket expenses. It’s your choice.

Chris Riback: Fantastic.

Robert Goff: If I could chime in as well, I think two things that I would add to Craig’s comment. Never put your medical expenses on a credit card. Don’t do that. I know people will be pushed to, but don’t. You just turned that into a different kind of a debt and one that carries a very high interest rate. The second is hospitals don’t do a good job of promoting access to the charity care, and so much so that charity care given by hospitals is actually dropping in this country.

Hospitals, that’s … They’re really not interested. They’ll post a sign in a clinic or in an emergency room, but when the bill comes, there’s nothing that says, “Oh, by the way, we think you might. How about applying for it?” So there may be a little bit of push there. And if you’re feeling financial stress, talk to your physician about it. Most physicians will work with you to try to keep the cost down or to spread out payments or to work something out with you. But you got to advocate for yourself.

Jerry Ashton: Well, this is where I step in to cause a little bit of furor because I’m furious. And that is, if you take a look at all of the elements that go into creating healthcare costs … I was just reading today about a Connecticut hospital that was negotiating with the CEO, who wanted to have a million dollars a year rather than three-quarters of a million dollars a year, and he was complaining about the fact that that wasn’t sufficient for all the preparation and education that was needed to do that job.

Yes, a million dollars for a CEO. You take a look at the insurance companies that have the largest, the largest profits they’ve ever had in the last couple of years, and yet they’re the ones that delay and deny. You take a look at big pharma, you take a look at the hospitals that whenever a doctor goes from a private practice into working for them, will then take and add a third of a cost to the patient because of that change in location.

So I would say that the next place that people need to go in order to manage their healthcare cost is to the polling booth. And that is make sure that when the next election cycles, you better find out who has your best interests in mind. Are they working for you, or are they working for that lobbyist? That’s what you need to ask yourself. Are you taking care of your family by allowing somebody to be in a position of authority that’s going to deny you access to affordable and reasonable healthcare because someone is paying for their next election campaign? That’s my two cents.

Robert Goff: One quick comment, if I might. Profit margins for many hospitals are greater than the profit margin of insurance companies right now. What I think people miss out on insurance companies is, with health reform, they actually have been turned into public utility type financing. They must spend 85% of what they take in in premiums on medical services or refund it. That leaves them 15% for administration, for everything else, advertising, whether you feel it’s right or wrong. But the profit margins now with insurance companies on health insurance is lower than the general sized hospitals. Shows you where the power shift has been.

Chris Riback: It’s a remarkable set of information that you’ve provided. It’s remarkable work that you do with RIP Medical Debt. Thank you for that. And it’s a terrific book that outlines much of the problem and offers solutions as well.

Jerry, Robert, Craig, thank you. Thank you for the work that you do, and thank you for taking the time with me today.

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