Berkeley Talks: The transformation of US medical debt collection

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Seth Holmes: … to today’s event, “The Transformation of Medical Debt Collection and the Financialization of Health Care Delivery,” with Dr. Luke Messac. I’m Seth Holmes, professor of society and environment and affiliated faculty with anthropology and public health and co-chair of the Berkeley Center for Social Medicine, which is sponsoring today’s event. I want to thank our co-sponsor for this event, the Berkeley School of Public Health. Before I go any further, I want to acknowledge that UC Berkeley sits on the territory of Huichin, the ancestral and unceded land of the Chochenyo Ohlone. This land was and continues to be of great importance to the Ohlone people. We recognize that every member of the Berkeley community has benefited and continues to benefit from the use and occupation of this land since the institution’s founding in 1868. Consistent with the university values of community and diversity, we have a responsibility to acknowledge and make visible the university’s relationship with native peoples. By offering this land acknowledgement, we affirm Indigenous sovereignty and our commitment to hold the university more accountable to the needs of American Indian and Indigenous peoples.

The format of today’s event is that after I introduce him, Luke Messac is going to talk about his work for about 30 minutes. Then we’ll have a discussion. If you have a question, please use the Q&A feature and Charles Briggs, the Berkeley Center for Social Medicine co-chair, will ask those questions on your behalf. Now it’s my pleasure to introduce Luke Messac, who’s an emergency medicine physician and social historian. He’s an attending physician in Harvard’s Brigham and Women’s Hospital Department of Emergency Medicine and instructor at Harvard Medical School. He received his B.A. from Harvard University, his M.D. and Ph.D. in the history and sociology of science from the University of Pennsylvania, and completed his residency in emergency medicine at Brown University’s Rhode Island Hospital.

His research focuses on the history and political economy of healthcare. In addition to many scholarly journal articles and book chapters, he’s written two books. The first, No More to Spend, is a history of medical neglect in colonial era Southern Africa, and today he’s going to discuss his second book, Your Money or Your Life: A History of Medical Debt Collection in the United States. The first time I heard him speak from this book, I was deeply moved and now it is the book that my family in our family book club is reading. He’s also an influential public scholar and shares his research in numerous public outlets including the Nation and CNBC. He serves on the board of Dollar For, a nonprofit dedicated to helping low income patients access hospital financial assistance, and we’re thrilled that he’s been a collaborator on two projects with the Berkeley Center for Social Medicine, including the New England Journal of Medicine: Case Studies in Social Medicine and The Lancet’s Global Social Medicine Case series. Welcome, Dr. Luke Messac.

Luke Messac: Thank you so much. Thank you so much for having me. Seth has been a great mentor and friend for many years and so I’m really honored to be here today. I’ve admired Charles’s work for a long time as well, though I don’t know if I’ve ever met him in person or even over Zoom, so I’m really grateful to be here. First, can everyone see my slides? We’re good with that?

OK, great. We’re going to start out talking about medical debt, but first I actually want to open up a bit broader onto this landscape of financialization of medical care. Financialization has a few different definitions, but you can think of it as the use of financial instruments and basically the colonization of financial logics into healthcare. This subject has garnered a lot more interest in recent years in the literature of sociology, political science, history. A lot of different social scientists and humanists working in this field.

Two particular works that I’ve learned a lot from and I think are definitely worth a read if you haven’t seen them, Capitalizing A Cure by Victor Roy, who’s an internist and sociologist. I think he might be at Penn now, but he has an amazing book about the history of sofosbuvir, the cure for hepatitis C and the way that it was priced, basically all the machinations that went into deciding about its price. He shows you that the reason why the medicine is so expensive has nothing to do with the cost of R&D. It really is a deliberate attempt to figure out the maximum price that could be charged for this medicine before Medicare and other public payers just would give up and wouldn’t cover it at all. So the financial logics were front and center to the crisis of pricing that we have today.

Colleen Grogan’s Grow and Hide. Grogan is a political scientist who is a professor at UChicago. She wrote about the history of healthcare, basically history of hospitals largely, and focusing on the way that public funding has always been a huge, huge part of making our healthcare system work. But at the same time, the benefits tend to accrue to private actors, just a few concentrated private actors. She talks, for instance, about the rise of tax-exempt bonds. This is the kind of stuff that you don’t really think you’d get into when you go into medical school or public health school, but tax-exempt bonds finance the growth of America’s hospital since the 1960s. It’s not really the donors you see on the atrium walls when you walk into the hospital. But these have some of the same pathologies as the redlining we saw in the 1930s, 1940s in American housing. The best rates go to the most well-heeled hospitals with the best pair mixes, and so public financing essentially of nonprofit hospitals is still perpetuating the race and class-based disparities even in hospital facilities today.

This is the kind of amazing stuff that you’ll find in this literature and I hope that I could add to it. I came to it honestly because I’ll give you a brief account of why I came to it. I was working as an emergency medicine resident at Rhode Island Hospital in Providence, where I still live. This is a great hospital. I love the place. It was a great place to do my training. It was a great place to work and it’s essentially a safety net hospital for much of southeastern New England.

But I was finding a lot of patients who would come to me concerned about costs. I imagine it’s the same for doctors everywhere, nurses everywhere. They would worry about my recommendations for them to stay overnight. Some of them would question my motives when I asked them to undergo a specific test, maybe an X-ray or CT, MRI, would ask whether I was trying to get a buck out of them. A few of them presented way too late in the course of their illness for fear of cost. And I’d started to hear about some aggressive debt collection practices being undertaken at hospitals around the country, specifically at Hopkins, where some of my friends were. I just wanted to make sure my hospital wasn’t involved in them. I wanted to make sure my hospital wasn’t doing these things I was hearing about, including suing poor patients.

So I went down to my county courthouse, this is the county courthouse, Kent County Courthouse, in this working-class community in Rhode Island, and I walked in and asked to be seen to the case files. When I typed in the name of my hospital, I found that I was being inundated with what I thought were pretty horrific cases of low-income single moms, people living on disability, recent immigrants who were facing thousands of dollars of bills and court fees and interests fees. And if they did not pay and if they did not settle their suits quickly, then they could have their wages garnished. They would be charged double-digit interest rates. This was the kind of thing I was afraid of, to be honest.

And so I didn’t know what to do at the time. I took the somewhat drastic and in some ways inadvised step of writing about it in my local blog that was run by this muckraking journalist in Rhode Island, and he was the only one willing to run this article about my hospital suing patients. Fortunately, they did stop after a little bit of bad press, which is really usually all it takes to stop the worst of the practices. But this got me interested in or really obsessed with trying to figure out what was going on. Why is it that hospitals, nonprofit hospitals, these institutions begun out of almshouses and religious orders and ethnic associations, why did they become such aggressive collectors of unpayable debts from their own patients?

I started looking into the history and came across this plaintive poem out of the St. Louis Medical Journal, then subsequently quoted in a book about how to collect debts from your patients from the 1890s. This basically sums up how doctors felt about medical debt during the 19th century. They were so despondent, many of them, about their inability to collect medical debts. They were expected to care for patients. It was part of the ethos of care to care for patients who could not necessarily afford to pay. But more than that, they worried that they were being taken advantage of, that there were patients who could afford to pay who weren’t paying them, and they didn’t know how far they should go and seeking to collect. Most of the time some agreement would be made interpersonally between the doctor and the patient about what would be done. Would the relationship be severed? Would they come to some sort of payment agreement? Would they forgive the debt entirely? Would they take them to court? All were possible, but it really was an interpersonal relationship, not intermediated yet by any financial institutions. Sometimes of course, but pretty rarely, pretty rarely.

Hospitals began to change over the course of the late 19th and early 20th century. They became places that were no longer just places where you would send the poor and isolated without any hope of familial care in their own home. But people would seek out hospital care. New techniques of antisepsis and surgery and technology like X-rays made hospitals places that even the well-to-do would go. And so the question of what to do with debts then then became a more central issue to hospitals, and the almshouse tradition began in some ways to fade. But really the seminal moment, and one of them that I’m going to discuss here is the passage of Medicare and Medicaid in the 1960s. In some ways you’d say, “Well, why would that make the medical debt problems worse?” Well, in many ways it didn’t. It made medical debt problems better for millions and millions of Americans who now benefited from, in the case of Medicare, a single payer healthcare system for America’s seniors; in the case of Medicaid, for a small portion of America’s poor.

But it changed the way that hospitals talked about their debts, and they started to say that there were no unpayable debts anymore. The American Hospital Association and other large institutions started to argue that there was no reason that they should be expected to be providing charity care any longer or to be forgiving debts because if people needed that sort of assistance, then the state was there to provide it for them and everyone else should be able to pay. And they succeeded in convincing the IRS actually to change the standard for nonprofit hospitals from what was known as the Charity Care Standard, where hospitals could lose their nonprofit tax exemption if they did not provide charity care to the extent of their financial ability, and a much debated concept to what’s now known as the Community Benefit Standard.

It’s still the reigning standard where hospitals are essentially treated … even nonprofit hospitals, not too differently from other institutions in our for-profit society. And they’re expected to provide some measure of community benefit broadly defined, but charity care is not necessarily at the same point on site. Charity care does not have to be the central focus of that. Research, education, other manners of community benefits qualify and allow them to retain their nonprofit status even if they provide, and many do provide very little in the way of charity care.

We’ve started to look into this outside of the book and I’m working with Dollar For, an organization that helps patients for free without asking for a penny, helps patients go through the often arduous process of applying for charity care at hospitals. And they have amassed the database of the charity care policies at hospitals around the country, basically all 6,900 or so hospital facilities around the country. We found that the Charity Care Standard, there really is no standard. It’s a wide variety of qualifying criteria. If you want to get free care or if you’re seeking to get free care at a given hospital, you might qualify if you make $180,000 a year as a family of four at some hospitals. And at others, you’d only qualify if you make $22,000 a year. At a few hospitals, you won’t qualify at any level of income. There are a huge variety of charity care policies and there’s really no standard other than a few state laws that do require some minimum.

After this passage of Medicare and Medicaid, the changes in charity care provision at nonprofit hospitals, you did see increasing coverage about medical debt and the things it caused people to do. This is one of the more salacious stories from the seventies where a man named Heinrich von George from Massachusetts, a former insurance salesman. His son had sought care for a cardiac defect, a congenital abnormality, at Massachusetts General Hospital, and as a result of some of the bills he had there and the loss of his job and his insurance, he was in some dire financial straits. He ended up hijacking a plane and seeking a ransom using the exact playbook that D.B. Cooper had used the year before. But D.B. Cooper had jumped out of a plane after getting the ransom and was never heard from again. Heinrich Von George tried to land and make his way into a vehicle, but he was shot and killed by an FBI agent before he could make it. This is some of the press began to amass around the problem of medical debt, but usually in the form of these kinds of “if it bleeds, it leads” stories.

Another huge change came in the ’80s. The ’80s were a tremendously difficult time if you were seeking to get Medicaid coverage or you were a Medicare patient. In an effort to penny-pinch, in an effort to push austerity policies, the Reagan administration and the Congress at the time decreased reimbursements for Medicaid and Medicare and didn’t allow them to keep pace with inflation. In part as a result, the number of people living in poverty, while it increased, the number of people on Medicaid actually decreased during the course of the early 1980s. As you can imagine, this was actually difficult for hospitals too. It’s not the first thing you think of, but it was difficult for hospitals too because now they had a huge pot of patients who had no insurance coverage at all. And so they were faced with this increasing burden of self-pay, what they call self-pay patients, patients who had no insurance to pay for their large medical bills.

One of the things that arose from this was the problem called patient dumping. For those of us who didn’t practice during the ’80s, this is something that’s hard to imagine or hard to stomach. The problem was that when patients would show up at private nonprofit hospitals, they would be summarily sent away, often shipped to the nearest public hospital prior to any stabilization. So this was in emergency departments, people showing up with trauma, people showing up in active labor, and they would either be denied care or immediately sent in an ambulance to the public hospital and many died on route. As a result, Pete Stark, a Democrat from California, he passed …

Actually this was after a pretty terrible death of a young man in Oakland, relevant to the audience here, helped pass what was known as the EMTALA, the Emergency Medical Treatment and Active Labor Act of 1986, which was rolled into this Omnibus bill signed by Reagan, which said that basically people have to be stabilized before they are transferred. That’s really all it gives you. If you show up in extremis, if you show up in an emergency situation, you have to be given a screening exam, you have to be stabilized before you are transferred elsewhere. It didn’t provide additional money for hospitals to live by this new mandate, and so hospitals were pretty upset by it. It’s really an example of the really threadbare right to healthcare such as it is in this country. You have the right to a screening exam and a modicum of stabilization.

Hospitals, though, continue to try to find ways to collect debts from patients who could not pay. Because of some of the changes in financing and reimbursement in the ’80s and ’90s, the rise of managed care that pushed reimbursements even lower, hospitals really got aggressive in trying to seek to collect. One of the things they would do was to start taking patients to court.

This is Quinton White, whose wife sought care at Yale New Haven Hospital in the early 1980s related to a cancer diagnosis. They accrued about $16,000 from two hospitalizations and were put on a payment plan by the hospital to try to pay it off. Twenty years later, Ms. White, Quinton’s wife, had died. He had paid off the entire amount of their initial bill, even though he was now 77 years old and was a retired dry cleaning worker. The hospital was not satisfied. They put a lien on his home, they’d emptied his bank account, and were threatening further legal action.

When his story was uncovered by Grace Rollins, who was an SEIU organizer looking to organize the food service workers at Yale New Haven Hospital, some of the people facing some of these large bills, and eventually Lucette Lagnado of the Wall Street Journal covered his story. The hospital eventually forgave the remainder of his $40,000 bill, which was basically just interest charges from the 20 years he’d been working to pay it off. He became somewhat of a cause celebre. It went from the small local newspaper in New Haven to the pages of the Wall Street Journal and then Congress, which held hearings on the problem.

But the problem hasn’t gone away, unfortunately. There’s still hospitals around the country, including my own, as I saw, who are suing patients, taking them to court, and pursuing all manner of aggressive debt collection practices. How does this work? There’s basically three steps to this. You can’t pay your bill. The hospital has its own internal collections department. For much of the 20th century, that’s where the story would end. The hospital would hold a bill for years, even decades, if you couldn’t pay and they might send you letters, they might make phone calls, but they wouldn’t seek to pursue it that much further. Starting in the ’80s and ’90s, medical debt collection agencies, these third parties, started to sell themselves more and more to hospitals and say that we can collect this debt for you. If you send us a share of the bill, that we collect their contingency fee, then we will collect for you. You don’t have to worry about it.

Sometimes hospitals wanted to get rid of the debt entirely and just collect what they could and so they could sell the debt. You can sell the debt outright to a third party and then the debt buyer will then seek to collect and they’ll pay the hospital maybe a few cents on the dollar to collect that debt. That’s actually how John Oliver was able to forgive $15 million in medical debt in what he called the largest TV giveaway in TV history, in 2016. He paid $60,000. $60,000. So about a half penny on the dollar for this debt of medical debtors in Texas. The idea is that these folks are so poor and so unable to pay that you’re going to collect very little no matter how aggressively you seek to collect, and so it can be purchased very cheaply.

But that doesn’t mean it’s not a disaster for the patients who have this debt. Some of the things that can be done to you if you have this debt are the following. Wage garnishment, so the hospital or its collector garnishes or takes a part of your take-home pay every month, often up to 25% of your take-home pay. This is often used for child support, delinquent child support, but it’s also used for medical debt. Bank execution, which is what happened to Quinton White, where the hospital or the debt collector just seizes your bank account. The judge gives you permission to seize the bank account, empty your savings. There’s a property lien where the hospital gains a legal claim over the patient’s home. Yale New Haven Hospital and a few surrounding hospitals had medical liens on the homes of 8% of owner-occupied homes in the New Haven area in the early 2000s. This was a tremendously common practice. Still is done around the country.

If the hospital isn’t satisfied with your ability to repay the debt after it obtains a lien, it can foreclose on your home. There have been pretty salacious stories of that happening. And then body attachment. Perhaps the worst is if you don’t show up to a post-judgment hearing to ascertain what kind of assets you have, then the judge can seek a warrant for your arrest. They can and do seek a warrant for the arrest of patients. While debtor prisons are illegal and unconstitutional in the United States, if you are too poor or don’t have the wherewithal or health to show up to your court hearing, then you can indeed end up in jail.

The practice of seeking to collect debt, though, is an interesting one, and I think there needs to be way more ethnographic work on this, to be honest. I’ve found some, but I’d love to see more. There are call centers in the Philippines, in Central America, in the United States and the Caribbean, in India, that seek to collect medical debt from patients in the United States. Even in America, the people on the other end of the phone definitely aren’t seeing their lives getting any easier too. The median wage for a debt collector about a decade ago, it was $11 an hour, which was $2 below the median wage in the United States. These firms have a turnover of 75 to 100% a year in part because of the pay, in part because of the arduous work it involves making thousands of calls a week to patients who are in dire straits.

That doesn’t mean it’s not a lucrative industry though. Some of the people who are at the helm of medical debt collection firms include Tom Gores, who through his private equity firm, Platinum Equity, owned Transworld Systems International, which was a large medical debt collection firm that garnered a lot of complaints on the CFPB database. He’s actually the owner of the Detroit Pistons. He’s on the board of the UCLA Medical Center. He’s a noted philanthropist in Detroit and in LA. The man on the right is Tom Reed, who was a U.S. Congressman from New York, from Corning, New York. He was a noted opponent of the CFPB and of the Affordable Care Act. He ran a debt collection firm that sought to collect debts from his own constituents in upstate New York. There’s some very connected and very powerful people at the helm of this industry.

You’ll see that medical debt in the United States is not evenly distributed. This is a great paper from a couple of years ago from some researchers looking at debt held on credit reports. You’ll see that in the South and the Mountain West, it really is a much, much higher burden in large part because Medicaid has not in many of these states, still not been expanded in line with the original intent of the Affordable Care Act. You’ll see that in states that expanded Medicaid, this graph on the left, you saw a rapid decrease in medical debt.

This is a problem that lived in the shadows. There are waves of interest in medical debt and debt collection. You saw some in the early 2000s with the articles in the Wall Street Journal, but then it faded away for a time. It wasn’t really until Occupy Wall Street, at the start of the last decade, where you saw increased interest in medical debt, in large part because the Occupy gatherings were so focused on consumer debt and what it was doing to everyday Americans. David Graeber’s book Debt: The First 5,000 Years was a catalyst for this focus on debt. Two other people who are notable in this story was Thomas Gokey, and the man on the left here was a sculptor who was in the Occupy gatherings in New York.

He was one of the first people to try and succeed at buying and forgiving medical debt on the secondary market. This was a market that isn’t easy to break into if you’re not a known quantity, and so he worked for months to try to figure out how he could get in on the practice of buying medical debt. But in his case, not for the purpose of seeking to collect, but to forgive. He and Astra Taylor, a noted writer and activist, started a group called Strike Debt along with a bunch of other activists that sought to make debt collectives or debt unions an organizing tactic. They’re still around. They’re still working. They’re still trying to make the abolition of medical debt an essential focus.

There are other groups that are working on similar veins, some with different politics, but all with interesting strategies. Dollar For, like I said, is an organization that helps patients apply for charity care and they do it for free. If you ever have a patient, if any physicians or healthcare providers out there who have a patient who wants some help getting through the overly complicated charity care applications, you can send them to this website, Dollar For, and someone will help them fill out the application, and they’ll never be asked to pay for it.

Physicians for a National Health Program is a group dedicated to single-payer healthcare and have been around for many decades. Some of their initial organizing efforts were around patient dumping and medical debt, so they’ve been at this for a long time. And the Debt Collective, as I mentioned, is a group of Americans, not just healthcare workers, but Americans of all stripes working for the abolition of medical debt. That’s it for now. That’s all I have. I’d love to take any questions or comments, and thank you so much for having me.

Charles Briggs: This is Charles Briggs, co-director of the Berkeley Center for Social Medicine. Thank you so much, Dr. Messac. That was an amazing talk. A little depressing, but absolutely eye-opening, and thanks also for thinking about some of the efforts that have been made to be able to grapple with this. I think you’re absolutely courageous for actually taking on your own hospital along these lines. Now we do have a number of questions. My role here is simply to read them off and then pose them to our speaker. There’s one that is from an anonymous attendee, and I like the way it’s framed. Maybe this is a stupid question, but why can’t the consumer buy their own debt? Who can buy the debt if it’s so cheap?

Luke Messac: Yeah, that’s a question that always comes up. I spoke with a lot of debt collectors, a decent number of debt collectors in the course of writing this book — anyone who would speak to me. It is one of the strange things that you can’t buy your own debt. Even the debt collectors themselves, the best they can do is buy the debt of a specific area or a specific institution and forgive that, but just the way that these secondary markets have been set up, they don’t allow for people just to call up and buy their own debt.

What you can do is negotiate your own debt with the hospital, them realizing that they can’t expect to get full freight out of you. You can go back and forth with the hospital about how much you’re willing or able to pay, really realizing that they still have these tremendous carceral powers over you essentially if you don’t come to an agreement that they like. But yeah, it’s unfortunate. Well, I guess it wouldn’t be a panacea, but it would be nice if you could buy your debt for half a penny on the dollar and just get rid of it.

Charles Briggs: In another tie-in to potential activism here, an attendee asked, how can we be sure that our local hospitals are holding to their community benefits standard?

Luke Messac: This is remarkably difficult actually, to be honest. There’s a few things you can do. One is go to your hospital’s charity care policy. Since the Affordable Care Act was passed, these have to be published online, at least for nonprofit hospitals, and you can see what the criteria are to qualify for free and discounted care. The average hospital will provide free care to anyone making underneath 200% of the federal poverty level, about $60,000 for a family of four. If your hospital is less than that, as my hospital is, then they’re not being generous enough probably and could be doing more.

But there’s more to it than that. Some hospitals make it extremely difficult to apply with citizenship requirements, residency requirements, asset investigations, all sorts of things that make it difficult to qualify for charity care. And then when they report their community benefit activities, they lump all sorts of things together and it’s hard to know exactly what they’re doing for whom and what kinds of community benefits it provides. So it can be challenging, but they do file reports with the IRS every year detailing in some degree of detail what they do.

Charles Briggs: Thank you. We have a lot of questions coming in, which is great. It shows the amount of interest in your talk. From Michael Schoenenbeck: Hi, thanks for the interesting talk. It brings back bad memories. I worked in the healthcare business in the 1980s and ’90s. I recall using Hill-Burton to forgive a lot of patient debt. Do you think it did or still does have a significant effect on individual payment patient debt, or is it really not that big in the scheme of things?

Luke Messac: That’s very interesting. I can’t say I know too much about the use of Hill-Burton to forgive medical debt. That would be, honestly, news to me. Hill-Burton was a bill passed in the ’40s in order to finance hospital construction, but I didn’t realize it had implications for patient debt. I’d be very interested in learning more about that, to be honest with you.

Charles Briggs: Great. I presume that probably that he might be able to reach you through your website or your email.

Luke Messac: Yeah, I can post my email. I’m happy to share it with the group.

Charles Briggs: Kind of you. Our Berkeley Center for Social Medicine affiliated, Deborah Gordon, asked, what is the average percent of interest charged by hospitals?

Luke Messac: It varies. This has been the subject of some recent state legislation that has sought to limit it. In fact, some federal legislation may be reposed soon to try to limit it as well. At my own hospital, it’s 11%. It’s really usurious essentially. Some states have limited it to 3, 4 or 5%, but it varies pretty widely across the country.

Charles Briggs: Another question here that’s come in is, what can our politicians do particularly at the state level to help this problem? Are there any interesting bills that are out there?

Luke Messac: Yeah, there are for sure. You guys are in California. California does have some protections for patients as you might expect. Some of the best though, like Oregon just passed a law that requires hospitals to screen patients for financial assistance … charity care is also known as financial assistance. I use charity care, it’s a historical name, even though I know it’s not necessarily the way that people want to understand this practice. But financial assistance for patients, they have to be screened for it before the hospital undertakes any collections actions. Exactly how that’s being done is still being worked out. But North Carolina just did a similar thing where every nonprofit hospital in the state signed up for a policy in which their patients will all be screened for eligibility for financial assistance, and a number of these aggressive debt collection actions are basically being taken off the table.

It’s interesting both the Senate and the House in the United States are both working on this. Kamala Harris actually was the point person in the Biden White House on medical debt and has made it somewhat of a focus of her campaign to the extent she’s published any policy. She has written a bit about medical debt. And so there is movement in federal legislation to try to address this issue, but it’s unclear what form that will take.

I actually testified before the Senate a couple of months ago, before Bernie Sanders’ Senate HELP Committee. As avowed a democratic socialist as Bernie Sanders is, the bill he was proposing was a debt forgiveness bill to buy and forgive the debt. It’s the kind of stuff that is really bipartisan, uncontroversial in many ways, but doesn’t really get at the root of the problem. I mean, you can buy and forgive all the medical debt that exists today without making much of a dent at all in the federal budget, but it’s going to start reoccurring the minute you do. Unless we get at the source of the problem as well as the existing debt, you’re really not addressing it. And so that’s why groups like the Physicians for a National Health Program or others pushing for a single-payer healthcare are really getting at the root and branch of it.

Charles Briggs: Absolutely. Here’s a creative idea. What about setting up an exchange where people buy each other’s debt? This would be very much like a meshing problem, like a kidney exchange.

Luke Messac: The closest that exists for this is this organization that used to be called RIP Medical Debt. Now it’s called Undue Medical Debt. They changed their name. They will allow you to … Say you’re a church and you want to have a fundraising campaign and you say, “I want to forgive all the debt in my town.” They can help you do that. They can organize that for you. They were started by debt collectors who wanted to stop collecting debt and start forgiving it. Jerry Ashton was one of them. And they helped John Oliver do his debt forgiveness scheme for that community in Texas. There are ways to target it a bit, but I haven’t seen the exchange idea yet. But getting your hospital to change its policies around debt collection and financial assistance would accomplish some of the same stuff.

Charles Briggs: Thanks. You may have answered this in talking about single-payer, but question is, if you could create a health system where medical debt is nonexistent, what steps would you take?

Luke Messac: There’s changes from the very reformist small moves to … not radical, but large scale changes that would change it. Single-payer would address the problem in that if you did single-payer with first dollar coverage, no payments at the point of care, the original vision of the NHS, then that would do it. You don’t have copays, you don’t have deductibles, you don’t have coinsurance. You don’t have any of it. And so if it’s covered by the state or some other party to begin with, then you wouldn’t have to worry about medical debt ever occurring again. Now, that is kind of what Medicare is, but Medicare does have coinsurance and copayment. It’s certainly not perfect. It’s definitely closer to it than other systems we have. I mean, the VA is essentially the NHS, but just for veterans. We say it’s good enough. It’s the system we want to give the people who we ostensibly think are most deserving, but not anybody else. That might be the focus of my next project, by the way, the VA, because I think it’s a really fascinating and much misunderstood institution. So that’s the largest scale thing you could do.

But there are other steps you could take, and I think I touched on this. There’s something called presumptive eligibility, which is basically you screen every patient at the point of care to see if they qualify for financial assistance. And so basically, say everyone under 200% of the federal poverty level shouldn’t have to pay for care. Well, right now, a lot of those people are being sued. They’re being taken to court. They’re having their garnished because they didn’t successfully apply for charity care themselves. But if you put the onus instead of on the patient, on the hospital and said, “You have to find out whether this patient qualifies,” there’s easy ways to do that.

Say they’re in a state program that also has means testing, like SNAP benefits or the heating assistance. Anything like that that has means testing. If they qualify for one, they should qualify for the other as long as the threshold is low enough. And then there’s even private companies like Experian and TransUnion that will do some of the screening for you. Better than that even is the IRS has your tax data, and they give it out to other people all the time. Well, they give it specifically to mortgage underwriters. So if you’re trying to get a home, then the IRS will give, with your permission, your tax data to the mortgage underwriter to try to figure out whether you qualify for that mortgage. They could do the same thing with hospitals. If you just give the hospital permission to get a summary of your tax data, not everything, just basically your income data, and that would allow the hospital to know right away at the point of care this patient qualifies for financial assistance; we should never bill them ever. Those are the kinds of changes I think we can make pretty expeditiously to alleviate this problem, not get rid of it, but ameliorate it.

Charles Briggs: Fascinating. How does medical debt get paid if you are on Medicaid? Do Medicaid users have to eventually pay for the debt if they gain or report assets?

Luke Messac: This is a bit … How does medical get paid if you’re on Medicaid? Qualifying for Medicaid can be challenging. You often have to pay … You have to basically lose all your assets to qualify for Medicaid. But once you’re on Medicaid, Medicaid is actually really pretty good coverage that doesn’t often require much in the way of copayments or deductible. Some states have tried to institute copayments, often in the American South, to say that … It’s a whole debate over worthiness about we got to get people off the dole and get people working for basic medical care. And so there are some places where you do pay copayments even with Medicaid coverage, but in many states you don’t. Medicaid is actually the closest to first dollar coverage we have in most places.

Charles Briggs: The question here, what advice would you give to people in the Bay Area who themselves are facing crushing medical debt?

Luke Messac: There are organizations out there that can help, like Dollar For. I would say, reach out to them and see if they can help you negotiate for a lower bill or even wipe it out entirely. You can talk to your provider. If it’s a private doctor, private doctors, like solo practitioners, the kinds who would negotiate your bill with you, they increasingly don’t exist in the United States. I mean, most of us work for large corporate entities that have taken over these functions from us. But if you do happen to have one of those providers who negotiates the bill with you, you can talk with them. But it can be a negotiation. I would say, yeah, work with your doctor and then get in touch with one of these organizations. Medical-legal alliances can help as well, but really, you don’t have to go through this alone.

Charles Briggs: One questioner wants to relate potential political proposals to get at this problem, local level, national level, but also reaching out to international movements for health for all. What do you see as a broader coalition to deal with this tremendous problem?

Luke Messac: That’s a great point. I started my work in … My research for the first decade of my professional life was in southern Africa. When I started thinking about medical debt, it actually wasn’t in the United States context. I started to read about medical detention, basically the practice of holding patients against their will until they pay their debts, a practice that … I first read about Uganda, but saw it in the Philippines and some countries in West Africa. Oftentimes mothers who had just delivered, they would be held in hospitals and detained until their family members could find the payment for their bills. This is a problem that manifests in different ways in different contexts. And I do think a transnational movement would be a powerful way to address it. In some ways, certainly among OECD countries, the United States has the worst problem, but I don’t think we need to limit ourselves to … As Sanders and some others do, we don’t need to limit ourselves to the rich world and say we’re too good to make alliances with other countries, other movements facing some of the problems.

Charles Briggs: We certainly have a lot to learn from other medical systems. Here’s a question that wants you to put on your doctor hat and also your historical and analyst hats. What role does fear of medical cost play in patients delaying or avoiding care? And how does this affect public health outcomes coming from the view of farm workers? Not only do their citizenship status affect access to care, but also cost.

Luke Messac: Yeah, I mean, I’m sure … I think I got some of the sense of this in Seth’s book about what leads migrant farm workers to seek care or not seek care. Yeah, it’s a huge problem, and I honestly think we need more on this. There are some papers that suggest that people with medical debt are somewhere between three and six times more likely to delay care than patients who don’t have medical debt. There’s some literature on this, but not nearly enough.

One of my projects going forward is looking at people delaying presentations for emergent conditions for fear of medical debt. So things like stroke symptoms or chest pain. We know that low-income patients, patients who fear medical debt are less likely to show up in a timely fashion with chest pain. But some of these emergent conditions, we in emergency medicine see them as truly, truly time-sensitive. I mean, time is muscle. Time is brain. We spend all of our time trying to make sure that once a patient gets in the door, that they get definitive treatment as quickly as possible. But we’re losing the battle because patients aren’t showing up. I think it’s a massive problem. It’s one of the reasons I’m most interested in this, and whoever asked that question, I hope we can have more work on just that question.

Charles Briggs: It reminds me of a time living in Berkeley when my next door neighbor was walking on the sidewalk in front of my house. I noticed that he was short of breath and I knew that he had suffered from congestive heart failure. I said, “Listen, you need to get into an ambulance now.” And he said, “I can’t do that because I’m an air conditioner technician and I would bankrupt my family.” Eventually we did get him into an ambulance, but at that point he didn’t live very long. What an amazing problem. Here’s another question. Why do so many individuals find themselves entangled in the net of medical debt even if they’re under the safety blanket of large health systems?

Luke Messac: You mean health insurance perhaps? Forgive me if I’m misinterpreting the question, but we know from some of the work done by Senator Elizabeth Warren. Before she was a senator, she was a law professor and she studied bankruptcy, and medical debt was a big focus because it’s a huge cause of bankruptcy across the country. And they, along with Stephanie Woolhandler, who’s a researcher in Boston looking at these questions, they found that most people reporting medical debt were insured. They had insurance.

But having insurance, especially now, doesn’t mean what it used to mean. High deductible health plans were and are a huge portion of the market, and so even if you have insurance, your expected payment at the point of care is still quite large. It can be huge. So the amount of protection you get from private insurance, and even public insurance on Medicare, isn’t always what you would hope it would be. And so the question of who foots … Medical debt is basically a question of when a patient can’t … You want to know who foots the bill when a patient can’t pay. It used to be the insurance company. But increasingly, since basically the last 20 years, the rise of high deductible health plans have allowed them to push more and more of the bill onto the patient.

Charles Briggs: Well, we have a number of people who are still asking questions, again, with tremendous interest in your work and also the lively and, I think, very helpful way that you’re answering them. We’re going to only be able to take one more. Thinking about regulations and how it is that something might be able to address this problem, what are the possibilities for actually trying to regulate the non-hospital actors who are involved in medical debt.

Luke Messac: The non-hospital actors. Some steps have been made. One of the things I was most interested in, and this gets to the whole concept of financialization, is there once was a personal relationship between doctor and patient. There were no halcyon days, nothing was ever amazing, but it was a fraught interpersonal relationship that is now mediated by multiple actors in the middle, and one of these are the debt collectors who I sought to profile in the book. There have been efforts to try to remove them from the process specifically through banning debt sales. I think this is a very reasonable step. I mean, hospitals do not collect meaningful revenue through selling their debt. They get a few tens of thousands or hundreds of thousands of dollars, but for large medical institutions, they mean nothing. And they lead patients to greater despair.

I do think that removing debt selling from the process is a big part of it, but that still leaves this contingency relationship with debt collectors that maintains having them in the process. Moving back to a day when someone who works for the hospital, who has some semblance of a connection to the caring relationship, having them having the conversation with the patient, I think would be a step forward. But hospitals have increasingly sought to move away from that for the last 30, 40 years. So that’s the transformation that I think is the one that got me into this subject, and I think the questioner is right, that that’s the broken relationship that we need to dig into further.

Charles Briggs: Well, it’s hard to think of a talk that could be more … that goes to the heart of what we try to do in the Berkeley Center for Social Medicine. Your work is astounding. Thank you so much. Thank you for taking your time to be with us. Thanks to all of the people who have attended and also asked questions. On behalf of the Berkeley Center for Social Medicine, thank you so much.

Luke Messac: Thank you. Thank you so much for having me.

Seth Holmes: Thank you, Luke, for joining us.

(Music: “Silver Lanyard” by Blue Dot Sessions)

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