Medical Debt and Its Impact on Rural Patients and Providers, with Carrie Henning-Smith

Organizations and resources mentioned in this episode:

• University of Minnesota Rural Health Research Center policy briefs on medical debt:
  • Health Care Affordability and Medical Debt Differences by Rurality Region and Socio-Demographic  Characteristics
  • Medical Debt in Collections Among Counties by Rural-Urban Location and Racial Ethnic Composition
  • Understanding the Impact of Medical Debt in Rural Communities: Perspectives from Rural Hospital Administrators
• The Changing Medical Debt Landscape in the United States, Urban Institute
• Undue Medical Debt (formerly RIP Medical Debt)
• Rural Health Research Gateway: University of Minnesota Rural Health Research Center projects and publications, including the Geographic and Socio-Demographic Correlates of Medical Debt Among Rural Residents project and related publications

Transcript

Andrew Nelson: Welcome to Exploring Rural Health, a podcast from the Rural Health Information Hub. My name is Andrew Nelson. In this podcast, we'll be talking with a variety of experts about providing rural healthcare, problems they've encountered, and ways in which those problems can be solved. Today I'm talking to Dr. Carrie Henning-Smith, co-director of the Rural Health Research Center at the University of Minnesota. Thank you for joining me today, Carrie.

Carrie Henning-Smith: I'm happy to be here. Thanks for having me.

Andrew Nelson: What led you to be interested in studying medical debt in rural America, and what do you hope your research findings contribute to our knowledge and discussions about rural healthcare access disparities and the wellbeing of rural people?

Carrie Henning-Smith: Thanks for the question. My interest in medical debt among rural residents stemmed from a couple of factors. One, we know that rural residents have poorer health outcomes and have unique and often longstanding challenges in accessing care, and affordability of care is a huge piece of that. There's also been a lot of media attention and policy attention to medical debt generally over the past several years. This is something that the public has growing awareness of and concern about. But what was missing for me in that media coverage and that policy attention was the specific understanding and focus on the way that medical debt was playing out for rural residents. And so, I hope that the work that we're doing at the Rural Health Research Center at the University of Minnesota is helping to fill in that gap and show that this is an issue that deserves specific attention in rural areas.

Andrew Nelson: You were recently the senior author on several policy briefs dealing with medical debt. In part, you looked at healthcare affordability issues by rural versus urban. What did you find in terms of the magnitude of affordability issues and how they might differ by geography?

Carrie Henning-Smith: First of all, what we found is that affordability issues are incredibly widespread no matter where people live. So, in both rural and urban areas alike, people are reporting that they are worried about being able to pay their medical bills. Approximately 43–44% of all adults surveyed in the National Health Interviews Survey say that they have concerns about affording their medical bills. We also found that more than 10% of people in both rural and urban areas said that they've had problems paying their medical bills. They're not only worried, they have actually experienced problems with those, and then more than 8% and 6% of rural and urban adults respectively, have said that they've been completely unable to pay some of their medical bills. This tells me a couple of things. First, healthcare writ large is not affordable for many people across the country, and many people are struggling with concern about affordability of healthcare. But this also shows me that we have a rural inequity here. The rates of people saying that they have problems paying their medical bills and people saying that they were unable to pay their medical bills altogether are significantly higher among rural adults.

Andrew Nelson: Can you tell me about some of the factors that might affect affordability of healthcare in rural areas that are different from urban areas?

Carrie Henning-Smith: Sure. There are many factors here that are contributing. First of all, we know that rural residents have higher rates of chronic conditions, higher rates of disability, and put together, that leads to a greater need for healthcare. And if people are needing to pay a copay, or worry about deductibles, or have some other out-of-pocket cost every time they need healthcare, and if they need healthcare more often, that's going to lead to this compounding issue among rural residents. But on top of that, access to care can be more challenging for rural residents. They're often dealing with longer distances, with fewer facilities, with transportation challenges, and all of these other things that so many of the podcast listeners know to be true about the reality of rural healthcare. For some rural residents, that means that they may not be getting preventive care or timely care to help maintain the conditions that they have. Instead, they may be seeking emergency room care, or they may need higher-intensity care by the time they're able to connect with healthcare. And that can lead to incredibly high healthcare bills. It makes a lot of sense to me that people are struggling to pay some or all of those bills.

Andrew Nelson: So those are some of the ways in which geography or living in a rural area can impact affordability. You also looked at affordability in terms of sociodemographic factors. What were some takeaways there?

Carrie Henning-Smith: I think the overall takeaway is that the problem of affordability and the problem of medical debt is not equally distributed across the population. It is, and I can't emphasize this enough, it's all too common across the population. Many people are either currently dealing with this or will deal with it at some point or have in the recent past, but the risk is not distributed equally. So not only do we see higher rates of medical debt and concerns about affordability among rural residents compared with urban residents, we also see greater risk of affordability issues and medical debt among people who are Black and Hispanic in particular. We also see higher rates among people who are living just above the poverty threshold. Certainly, there are concerns for people below the poverty threshold, but people for whom the safety net is not there for them, is not available to them because they make just enough above that safety net threshold. We see significant issues among that population. We also picked up on differences by age, by region of the country, and by sexual orientation for all of these socio-demographics, pretty much anywhere you look the same populations that experience health inequities and poor health outcomes are the same populations where we're seeing greater concerns about affordability. So maybe it's some tragic irony here that the people who need healthcare the most are the ones for whom healthcare is the least affordable and the least accessible.

Andrew Nelson: Yeah, it does seem like often people can find themselves in this kind of downward spiral as they have more and more issues that are becoming more and more expensive to adequately address. And it can be very difficult to kind of climb out of that. Sometimes we see that it can be difficult for people to understand what health insurance options are the best for them. Did you have any findings about how the type of health insurance rural people have, or don't have, affects their concerns about and their ability to pay their medical bills?

Carrie Henning-Smith: We did, and I want to say a couple of main findings here. First of all, not surprisingly, people without health insurance at all were the most likely to be concerned about affording medical care and not being able to pay for their care if they receive it. That makes a lot of sense. And we know that expanding access to health insurance in general is really important. But we also found that for people who do have health insurance, whether that's Medicare or Medicaid or private insurance or some other type of coverage, people in all of those groups reported issues with affordability. There is no type of health insurance for which we don't see this being an issue. That tells me that we have significant reforms to make across insurance types, to ensure that out-of-pocket costs are reasonable and that people are able to get the care that they need.

Some of the highest rates of concern about healthcare affordability were among people who were insured through Medicaid or who were insured through Medicaid and Medicare, dually eligible. Some of the lower rates were among people insured by Medicare, either traditional Medicare or Medicare Advantage. But when I say lower rates, I'm still talking about nearly 40% of people with Medicare said that they were worried about affording their healthcare. And so this is an issue across insurance types. There's other research and really great journalism that has showed the impact of high deductible plans, too. We didn't dig into that with the data that we had. We didn't have that level of granularity. But there's been other work to show that people in high deductible plans or plans that require significant out-of-pocket costs are some of the people with the greatest risk of medical debt and affordability issues. I think sometimes we take for granted that if people have health insurance, and especially if they have private health insurance, that affording healthcare is not an issue. And that is certainly not the case. We show that in our work, and other researchers and journalists have shown that in their work too.

Andrew Nelson: I kind of touched on this briefly a couple of minutes ago, but can you talk a little bit more about how debt from existing medical problems that people have had can affect their ongoing access to healthcare?

Carrie Henning-Smith: Yes. You mentioned the cyclical nature of this, and I want to come back to this. It can have huge implications on future access to healthcare. First, I think it's worth talking about what we mean when we say medical debt. Medical debt is this big, and sometimes hard to study, concept. It includes medical debt that is sent to collections and that people are trying to get repaid for medical bills, but people also borrow money to pay their healthcare bills in lots of other ways that don't show up in what we see from collection agencies or from some of that reporting. They might move some of their healthcare debt onto credit card bills. They might borrow from family and friends. They might take away from other parts of their lives. So, it might make really difficult choices between paying rent and paying for food, paying for medication, and paying for other types of healthcare.

I think it's important to know the many different ways — and sometimes very opaque ways — that medical debt is impacting people's lives, when we think about the ways that it impacts their health and their future use of healthcare. We know from research, from some of the work that we've done, and certainly from work that others have done, that if people are experiencing medical debt or issues with healthcare affordability, they're more likely to forego medication. They're more likely to forego additional appointments and visits that would require additional out-of-pocket costs. What that means is that people might have untreated chronic illness that leads to more need for high-cost care, leads to greater risk for emergency care hospitalization, or even mortality down the road. And so, in some ways it's sort of kicking the can down the road, but leading to greater risk of more debt, more affordability issues. There have also been cases of healthcare providers and facilities refusing care to people who have unpaid bills, who have medical debt with them. Policy has started to intervene there. For instance, in the state of Minnesota, that's no longer allowed and we're seeing more policy intervention across the country there to make sure that people are not turned away if they have medical debt. But that has been an issue too. People literally not being able to get the care they need because they're turned away at the door.

Andrew Nelson: Sometimes that medical debt does get to the point where it gets sent to collections. And that's another facet of this topic that you looked at in terms of whether this was happening in rural or urban locations, as well as the ethnic and racial composition of people experiencing that. Could you tell us a little bit about that study and what you found?

Carrie Henning-Smith: Absolutely. So for this study, we used data from Urban Institute, and I encourage anyone with an interest here to check out their website on medical debt. They have really user-friendly data and information that people can look at how medical debt and rates of medical debt vary from county to county. We took those data and applied rural and urban categories to the counties so that we could see how counties differed by rurality. What we found is that across rural counties, an average of 15.7% of people have medical debt in collections. So that's not medical debt that you've borrowed from a friend or put on a credit card or borrowed from some other area of your life. This is medical debt that's trying to be collected by collection agencies. It's a fairly severe form of medical debt and can have impacts on your credit score and on other areas of your life. 15.7% is a huge percent of the population. And across urban counties, we found that the rate was a little bit lower, significantly lower statistically speaking, but still concerningly high, at an average of 14.8% across urban counties. When we looked deeper to see how that varied by racial and ethnic composition of counties, what we found was this double inequity that we have seen in other health research. We find that rural communities of color, that is, rural counties where a majority of the population is Black, Indigenous, or belonging to another community of color, those counties have the highest rates of medical debt compared with rural counties that are majority White and compared with urban counties of any racial or ethnic composition. This concerns me for a variety of reasons. It's clearly an inequity that needs to be addressed, and this also builds on work that we've done at the University of Minnesota Rural Health Research Center, showing that some of those very same counties have the highest rates of mortality, the lowest life expectancy, of any county across the country. And when we add financial pain and barriers to accessing and affording healthcare on top of that, it just compounds some of the health inequities that we already know to be true.

Andrew Nelson: So far, we've mostly been talking about how medical debt affects patients, but your team also did key informant interviews with rural hospital executives, and I'm sure that was really interesting too. What did you learn about how medical debt affects their hospitals?

Carrie Henning-Smith: We learned a lot. We talked with seven rural hospital administrators from across the country covering every region of the country, and just talked to them about what they are seeing about medical debt, how medical debt is impacting their hospital and their patient population. And every one of these hospital administrators, not surprisingly, had a lot of thoughts and a lot of insights on this. I think it's worth reminding all the listeners, and I'm sure the listeners of this podcast don't need to be reminded of this, but it's worth reminding listeners how slim the margins are for many of the rural hospitals that we have across the country, and how many are not operating in the black from year to year. Rural hospitals are also serving an important mission, and many of them have a nonprofit status that requires them to provide community benefits; requires them to care for their populations.

That sometimes means providing uncompensated care, providing care for people who simply cannot pay the bill or don't have health insurance that's able to fully cover the cost of that bill. What that means is that we heard rural hospital administrators talk about how the issue of healthcare affordability and the precarity of some health insurance programs impacts their bottom line and the health of the populations that they serve, for all of the reasons that we talked about before, for people having health issues that compound because they don't come in the door, they're concerned about those out-of-pocket costs. It also means that rural hospitals that might be operating on that very slim margin and aren't getting adequate reimbursement rates from health insurers or aren't getting bills paid from their patients; that makes them even more concerned about their bottom line and their viability to stay open and continue to serve the populations who need them so much.

Andrew Nelson: Earlier you mentioned how emergency care can be a type of care that really drives up medical debt. Are there any other specific types of care that come to mind?

Carrie Henning-Smith: I would say that emergency care is the number one driver here, a huge factor. We've talked a lot about chronic conditions and illnesses, diseases that require maintenance, that require [a] fair amount of care. But for some people, for many people, actually, it's that one incident. Maybe it's an accident that happens at work, maybe it's a heart attack that requires medical transport, that one thing that sends you to the emergency room and requires a huge amount of care and incredibly intensive and expensive care. That can be enough to move people from being financially secure to having medical debt that plagues them for years and years. But it's not only emergency care. We see medical debt as an issue across all types of care. There's been a lot of good journalism on how medical debt impacts people who have babies and medical debt simply from paying the bill from labor and delivery, especially if there's any interventions or high intensive care that's required during that period. That's an event that should be ideally joyous and yet leave some people with bills that follow them for years, if not decades.

Andrew Nelson: Can you talk a little bit about how policy affects medical debt and in turn affects its impacts for both rural providers and rural patients?

Carrie Henning-Smith: Policy has a huge role to play here, and I'll say I've been heartened because there has been policy attention at the municipal, state, and federal level in recent years. I think this is an issue that people are well aware of and trying to do something about, although the problem remains way too big and impacts way too many people still. There are a number of policy levers that can help to alleviate some of the worst symptoms of medical debt. Things like making it so that credit reports don't include medical debt, so that can't haunt people if they're searching for an apartment or need a loan for some other reason, that medical debt is not the reason that they can't get that. I mentioned the policy earlier about prohibiting the practice of healthcare providers and facilities turning away people with medical debt. That's a policy lever to ensure that people still have access to the care that they need. Policies around reimbursement rates are really important here. We need to make sure that reimbursement rates from payers are adequate to cover the cost of care, and knowing how much care is reimbursed by government payers. There's a lot that federal and state agencies can do there, provided that they have the resources to afford that. But I think we could talk a lot about policy impacting the symptoms of medical debt. And I suppose I should also mention that there has been work at the local and state level to forgive medical debt from people. A lot of local and state governments have partnered with an agency that used to be known as RIP Medical Debt. They rebranded as Undue Medical Debt to buy up medical debt and forgive it for people. I wouldn't exactly call that a policy. I would call that an intervention that has been helpful for some people. But all of these policies are really getting at the symptoms of medical debt rather than the root causes. And I think we need to think about root causes of why people need high-cost healthcare in the first place. So addressing some of the social drivers of health that impact disease risk, but then also some of the root causes of affordability in the first place. So looking at economic policy to ensure that people have a living wage and have the resources they need, but then also looking at insurance designed to make sure that insurance is available, accessible to everyone, and that it covers enough and covers generously enough that no one should have a healthcare emergency that then leaves them with debt that plagues them for the rest of their lives.

Andrew Nelson: Are there any are there any changes or are there any trends that you see that you think might contribute to changing people's ability to afford medical care in the future and avoid medical debt?

Carrie Henning-Smith: It's hard to predict what exactly is going to happen. We have a new administration starting in January. It's hard to predict where we're headed with state and federal policy. I think that the public discourse on this might help to spark continued policy movement. We, as I said, have seen states and local areas really take this up. I would lift up again, Minnesota as being a state that has done a lot to try and address healthcare affordability and medical debt.

But that leaves us with a patchwork right now, and a patchwork that I think disadvantages rural residents to the extent that we have municipalities, local areas doing things to, say, forgive medical debt. They tend to be large urban areas that leaves out the rural residents that our research shows are most impacted by this issue. So, I think we need to continue to see policy, investment and attention at the state and local level, but we also need a more unifying federal approach here to make sure that no one is left out.

Andrew Nelson: Today we've been discussing some of the topics in your recently published policy briefs that focus on medical debt. Do you have any other research coming up that you want to promote?

Carrie Henning-Smith: We do. We have a number of things that are under review or underway, and so I just want to tease those for people who might be interested in this topic and know that we expect those things to be coming out in the coming months. I will highlight four specific research products that we are currently working on, and they all address different facets of this issue.

One looks more closely at healthcare affordability and concern about medical bills among Indigenous individuals in rural and urban areas, and what the role of the Indian Health Service or the IHS, is in addressing healthcare affordability. That is a policy brief that will be freely available on our website or through the Rural Health Research Gateway when it's published. We are also working on a couple of papers that look at different dimensions of medical debt.

One looks at how rates of healthcare affordability and problems paying medical bills varies by specific chronic disease diagnosis and by rural urban location. We talked a lot in this conversation about how chronic disease and need for ongoing medical care has real implications for affordability, but we wanted to look more deeply and see both how rates of chronic condition diagnoses varied by rural and urban areas, but also how issues with medical debt vary by type of condition that people have. And what I can just tease on this podcast a little is that we found significant differences between types of chronic disease and, and that suggests that there are opportunities to provide relief for more generous payment structure for people with the chronic conditions that struggle the most with medical debt.

We also have a paper that is underway looking at how medical debt varies by whether or not someone is socially isolated or whether they have people in their lives to whom they can turn. And the teaser there is that there is a significant difference. This makes a ton of sense. We know that people often borrow money from family or friends to pay their medical bills. If someone doesn't have someone to whom they can turn to borrow money then that puts them at even greater risk. On top of that, people who are socially isolated and lonely have poor health outcomes and so may have greater needs for healthcare in the first place.

And then the last product that I want to give a little sneak peek at is that we're doing a series of case studies that look at how hospitals and programs and rural communities are trying to address this, or trying to prevent medical debt among rural residents in their communities. One of the cases that we're profiling, there is a rural hospital that has created an educational program to help people learn when to use the emergency room and when to use other types of care so that they avoid some of that more costly care that we talked about a lot in this conversation. And they're doing that program in a way that is culturally and linguistically appropriate for the population they serve and are seeing real impact there. So again, I would encourage anyone listening to the podcast who has interest in this to just keep an eye out. Those will be shared through the Rural Health Research Gateway and on our website at the University of Minnesota Rural Health Research Center, when they're published.

Andrew Nelson: You've been listening to Exploring Rural Health, a podcast from RHIhub. In this episode, we spoke with Dr. Carrie Henning Smith, Co-Director of the Rural Health Research Center at the University of Minnesota. Look in our show notes for more information about their work and visit ruralhealthinfo.org for all things pertaining to rural health.