Dive Brief:
- Nearly 42.9 million people—or 20% of US consumers with credit records—have unpaid medical debts, according to a new report by the Consumer Financial Protection Bureau.
- On average, a person with only overdue medical debt owes $1,766. Someone with unpaid medical bills and other sources of debt, like credit cards or back taxes, owe an average of $5,638. More than half of all debt on credit reports stems from medical expenses.
- Complaints to the CFPB indicate that consumers are routinely baffled by medical bills. Unwieldy insurance and hospital statements leave them uncertain as to how much money they owe, the deadline for payment and which organization should be paid.
Dive Insight:
The report by the federal regulator indicates that about half of consumers who only carry medical debt have no other signs of being under financial distress. But this isn't only a consumer problem: As patients take on higher deductibles and a greater responsibility for their portion of medical costs, healthcare organizations are having a harder time collecting balances. Patient-estimation software and other revenue-cycle management technology is offering hospitals and medical groups some help with this, in part by giving patients more transparency into cost of care and payment options. But implementing this technology is a huge investment, financially and time-wise.
