Friday, July 27, 2007
The same cannot be said of the testimony of Harvard Professors David Himmelstein and Elizabeth Warren, purported to be generally applicable social science. In fact, it was junk. Blandly entitled "Illness and Injury as Contributors to Bankruptcy," their long-discredited 2005 study may be one of the most misleading pieces of research ever placed before Congress — no small dishonor.
The study's central findings were that 54½ percent of all bankruptcies have a "medical cause" and 46.2 percent of all bankruptcies have a "major medical cause." Even if this were true, bankruptcy law already provides adequate safeguards for the special problems posed by medical bankruptcies, as one of us (Mr. Zywicki) testified at the hearing. But it is not true. And the only way to make such a claim is to gerrymander the definition of medical bankruptcies to generate the desired results — true junk social science.
For example, the study classifies uncontrolled gambling, drug or alcohol addiction, and the birth or adoption of a child as "a medical cause." There are indeed situations in which a researcher may legitimately classify those conditions as "medical," but a study used to prove Americans are going bankrupt as a result of crushing medical debt is not one of them.
A father who has gambled away his family's mortgage payment is not the victim of crushing medical bills. Similarly, new parents who find they can no longer afford their previous lifestyle now that one of them has to stay home with the baby will usually find the obstetrician's bill the least of their problems. Babies are a financial hardship even when hospitals give them away free.
But that's just the tip of the iceberg. The authors also classified bankruptcies as having a "major medical cause" if the debtors had more than $1,000 in accumulated, out-of-pocket medical expenses (uncovered by insurance) over the course of the two years prior to the bankruptcy, even if the debtors did not cite illness or injury as among the reasons for their bankruptcy.
...To put this figure in perspective, in 2001 (the year that was the basis for the study's sample) average per capita out-of-pocket medical expenses were $683 — meaning during that two-year period the average American spent about 30 percent more than their figure on uncovered medical expenses.
To designate all cases involving expenses of more than $1,000, regardless of circumstances, as bankruptcies with a "major medical cause" is both silly and deliberately misleading. A bankruptcy with $1,001 in uncovered medical expenses and $50,000 on a Bloomingdale's card would constitute a "medical bankruptcy" in their study. Perhaps their expansive definition of "medical bankruptcy" should include self-proclaimed "shopaholics" as well.
Well, of course it should! I'm sure a study could be designed to show that shopaholism is contagious, too, making it even more worthy of the illness designation.
It's easy to blind them with science if you have the right credentials after your name.
Here's another interesting tidbit from the piece:
Among the most recent is a study of 5,203 bankruptcy filers (about threefold the number examined by Mr. Himmelstein and Miss Warren) by the Executive Office of the United States Trustee. It found 54 percent of filers listed no medical debt at all and that medical debt accounted for about 5½ percent of the total general unsecured debt.
That's a lot smaller than we, the public, have been led to believe.
posted by Sydney on 7/27/2007 08:33:00 AM 6 comments
Miss Warren takes issues with those conclusions here:
By 2:53 PM, at
If they can make up a study showing that medicine is responsible for bankruptcies, I bet the insurance industry could probably create a study blaming jury verdicts for high liability premiums, can't they?
By 2:55 PM, at
I guess they have missed folks like me with 10,000 in medical debt on top of credit card debt from not being able to work. Us patients need to get our asses in gear, quite being irresponsible and just pay up.
There are secondary expenses to illness that are not apparent. A sort of cascade effect through one's whole life. For instance, a sudden drop in weight that causes you to need a whole new wardrobe for work - this is not a luxury if you want to keep your job.
I agree it is not the medical bills that really cause the bankruptcies, it's the secondary effect of the illnesses. Too few people have adequate disability insurance policies, and many of those require one to be nearly brain dead to collect a dime.
By 12:12 AM, at
Here's a website you may find useful. http://www.addicted.com is a site for friends, families, and those who suffer from various addictions.