Study: Medical bankruptcies may not be as common as thought

By Tom Murphy / Associated Press

Medical bills can push patients over the financial cliff, but a recent study says this may not happen as often as previous research suggests.

Hospitalizations cause only about 4 percent of personal bankruptcies among non-elderly U.S. adults, according to an analysis published in the New England Journal of Medicine.

This contrasts with previous research by former Harvard professor and current U.S. Sen. Elizabeth Warren and others that pointed to medical reasons as the trigger for more than 60 percent of U.S. bankruptcies.

In the recent study, researchers tracked the credit reports of more than a half million adults under 65 in California who had a hospitalization between 2003 and 2007 that wasn’t tied to childbirth. They found that hospitalizations clearly forced some patients into bankruptcy in the years following their stay, said study co-author Matthew Notowidigdo, a Northwestern University economist.

It just may not happen as frequently as the other research indicates.

Researchers also estimated that hospitalizations were responsible for only about 6 percent of bankruptcies among uninsured patients. They noted that hospitalization rates are lower in that patient group compared to the overall non-elderly population.

The new analysis included a broader range of people than earlier research, which focused on those who already had filed for bankruptcy protection.