Pathway Helps Massachusetts Residents Develop and Implement Debt-Reduction Strategies, Leading to 60-Percent Reduction in Medical Debt
Pathway Helps Massachusetts Residents Develop and Implement Debt-Reduction Strategies, Leading to 60-Percent Reduction in Medical Debt
The Access Project created a medical debt resolution program that incorporates the Pathways model, a model that involves “pathways” of action steps designed to produce healthy outcomes. The program helps individuals reduce or eliminate medical debt by using a pathway designed to help them identify and implement debt reduction strategies, with the goal of increasing access to health care services and reducing financial burden. The program also helps providers convert debt into paid bills. The Access Project has an in-house medical debt resolution program and helps other organizations and local collaboratives integrate the program into their existing work. Since January 2007, the Access Project's in-house program has helped more than 1,000 individuals reduce their medical debt. In Massachusetts, the program has served more than 300 residents and has helped to reduce their debt burden by approximately $2 million (which represents more than half of the more than $4 million in total medical debt faced by these individuals before the program began). Other organizations that have adopted the medical debt resolution program have also seen positive results.
Medical debt—defined as money owed by an individual for medical services or products received—is a common problem among both insured and uninsured individuals. Medical debt can have significant negative consequences related to health care access, financial stability, and psychological well-being.
A common problem: A 2007 Commonwealth Fund survey found that 41 percent of working-age adults, or 72 million people, reported a problem paying their medical bills or had accrued medical debt. The number of adults younger than 65 years who have such high out-of-pocket costs (excluding premiums) that they are effectively underinsured increased from 9 to 14 percent between 2003 and 2007.1
Many negative consequences: The negative consequences of medical debt are far reaching and include reduced access to care, increased financial burden, and psychological problems.2
Reduced access to care: Medical debt can result in delayed care, discontinued care, and unfilled prescriptions. The Commonwealth Fund survey reported that 45 percent of adults aged 19 to 64 years had cost-related health access problems within the past year.1 Another survey found that 28 percent of insured individuals with debt postponed care due to the cost.3
Financial burden: Medical debt can lead to credit and housing problems and difficulty affording other necessities. The Commonwealth Fund survey found that 39 percent of adults younger than 65 years with medical bills or debt problems used all of their savings trying to pay off the bills; 29 percent were unable to pay for basic necessities such as food, heat, or rent because of a medical bill.1 A 2005 Access Project study conducted in Voluntary Income Tax Assistance sites found that 46 percent of respondents had medical debt, and, of these, 27 percent reported housing problems as a result of the debt. Relatively small debts, moreover, can have far-reaching effects; for example, 16 percent of respondents with medical debts of less than $500 reported credit problems; overall, 39 percent said that medical debt had damaged their credit.4 A 2008 Access Project and Demos study found that more than half (52 percent) of low and moderate income families with credit card debt used it to pay medical bills and that those who had medical debt on their credit card had substantially higher credit card debt than those without medical debt on their card.5
Psychological impact: Depression, stress, and anxiety are common psychological consequences of medical debt.
Description of the Innovative Activity
The Access Project has an in-house medical debt resolution program; it helps other organizations and local collaboratives integrate the program into their existing work or refer clients directly to the Access Project's program. Partner organizations help individuals reduce or eliminate their medical debt via a pathway that helps them identify and implement debt reduction strategies. Elements of the pathway are as follows:
Client identification: People struggling with medical debt either call the local medical debt resolution program on their own or are referred by established local referral networks, which can include housing advocacy programs, medical provider partners, and other social service organizations. Sites may also pursue outreach efforts to identify clients; efforts might include distributing flyers in the communities, working through religious institutions to provide basic information about access to care and managing medical debt and going door-to-door to determine need. Organizations and their collaborative partners that have existing pathways programs may add a question about medical debt on their intake form to trigger the medical debt resolution pathway.
Education: During the first interaction, medical debt counselors provide clients with background information about national and local medical debt trends (e.g., sharing data on the prevalence of medical debt, which lets participants know they are not alone in facing this problem) and with information about the medical debt resolution program's services.
Collection of medical debt information: Also during the first interaction, debt counselors collect medical debt information about the client's medical debt “story.” Information gathered includes insurance status at the time of debt, negative consequences related to health care access and/or finances, the medical condition leading to the debt, to whom money is owed, and amount owed.
Development of action plan: The medical debt counselor provides the client with resources that can help in obtaining insurance (if the client is uninsured), accessing other public and private programs that may help pay past medical bills, resources than can help clients exercise their insurance appeal rights, and legal assistance if necessary. Counselors may provide clients with information they can use to resolve medical debt on their own, or counselors may pursue resolution on the client's behalf. Action steps might include collecting more information, making phone calls or writing letters to obtain or convey information to providers and insurers, and/or applying for a public assistance program.
Follow up, confirm, and support: The client and counselor agree during the first interaction to reconnect during a specific time period (which depends on the action plan defined). During followup contact, the counselor identifies any barriers the client is facing in following the action plan and provides additional support to help resolve the debt. Referrals to other organizations are made, if indicated. The action plan is revisited and revised to reflect updated actions as necessary.
Case resolution: The case remains open as long as the client has unresolved medical bills; action plan revision is repeated until all medical bills have been resolved. The completion step occurs when the client's medical debt has been eliminated, reduced, or renegotiated into a manageable payment arrangement.
Context of the Innovation
The Access Project, based in Boston, MA, is a national organization supporting local efforts to improve access to health care through research, policy analysis, community engagement, advocacy, and communication services. The Access Project's participation in a national research initiative about access to health care highlighted the problem of medical debt for organizational leaders. In response, the organization developed the medical debt resolution program in late 2006 and began providing medical debt resolution services to Massachusetts residents. Shortly thereafter, the Access Project designed a medical debt resolution program technical assistance protocol in response to interest from external organizations in learning how to integrate medical debt resolution into their existing work. When providing this training to the Neighborhood Health Initiative in Des Moines, IA, which uses a Pathways model, Access Project staff realized that their program would fit nicely within the Pathways methodology. Staff adapted the program into a medical debt resolution pathway in January 2008.
The medical debt resolution program has helped more than 300 people in Massachusetts reduce their medical debt burden by approximately $2 million (which represents more than half of the more than $4 million in total medical debt faced by these individuals); organizations in other states that have adopted medical debt resolution programs have also seen similar positive results.
- Positive results in Massachusetts: Through the program, more than 300 Massachusetts residents have reduced their medical debt by approximately $2 million out of a total of more than $4 million in medical debt. Although a breakdown of how the debt was eliminated is not available, information from 110 Massachusetts clients served between January 2007 and June 2008 found that approximately $1.2 million in medical debt that had originally totaled $2 million had been reduced or eliminated, including:
- $540,500 that was paid by public programs
- $383,000 that was covered by provider charity care or discounts
- $127,500 that was (or is) being paid by individuals after successfully renegotiating affordable payment plans
- $155,000 that was paid by private insurance
- Similar success in Iowa: The Des Moines, IA, medical debt resolution program, initiated in April 2008, served more than 40 clients during the 2008 calendar year, resolving cases totaling more than $300,000 in medical debt.
Planning and Development Process
The Access Project uses the following approach to planning and developing programs around the country; organizational readiness at each step is confirmed before moving forward to the next step:
- Project startup: When local leaders sense that medical debt or affordable health care is a problem in the community, a local champion will contact the Access Project and take “ownership” over the program.
Measuring local/neighborhood medical debt: The local champion, with the Access Project's assistance, determines what indicators to measure and how to measure them. The organization then surveys the community to determine the scope of the problem. The goal is to determine the approximate number of individuals who have medical bills or who have accrued medical debt they are paying off over time.
Project planning: The organization outlines the intent of the program, creates client outreach and referral protocols, and identifies local agency partners (e.g., health law advocates, collection agencies, organizations involved in client outreach). Assessment of local partners includes organizational capacities, current referral relationships, and existing communication, coordination, and collaboration patterns.
Designing the program: All elements of the program are designed within the framework of the medical debt resolution pathway; the Access Project provides tools and worksheets to aid in design. Required staffing is determined, and roles and responsibilities of program staff members are defined.
Training: The Access Project conducts a 2-day onsite training of program staff members and referral partners to transfer the medical debt resolution program skills. Training includes a presentation of background on the prevalence and consequences of medical debt locally and nationally; programs and resources available at the State level and locally; discussion of specific skills counselors can use when confronting medical debt cases; practical application and practice exercises; and facilitation of actual partnership-building meetings with providers and public programs and other local stakeholders.
Followup technical support: The Access Project helps the organization build relationships with referral organizations and facilitates relationships between the organization and local medical providers. It also offers ongoing support to individual counselors when required by case complexity. The Access Project holds a series of conference calls with program staff to collect initial results, identify trends and patterns related to policy issues across cases, and offer additional technical assistance as needed.
- Tracking results: The Access Project helps in tracking the impact of the program on an ongoing basis, including number of clients served, negative consequences of medical debt, amount of debt outstanding, amount of debt resolved, and other indicators. The Access Project can help local collaboratives produce materials and reports that relate to the policy issues and outcomes of the medical debt resolution program work.
Resources Used and Skills Needed
Staffing: Staffing depends on client caseload and organizational capacity. Ideally, organizations commit a minimum of one full-time equivalent medical debt counselor for program startup at their site; one counselor can serve between 25 and 45 clients at any point in time, depending on case complexity. Alternately, organizations can contract with the Access Project to provide staffing and direct support to clients interested in resolving their medical debt.
Costs: Costs per site vary. Cost categories include staffing, materials, and outreach efforts; costs related to Access Project technical assistance can be obtained by contacting the Access Project.
Getting Started with This Innovation
Contact the Access Project for assistance: The Access Project can help communities assess need, design programs, and build local relationships; the organization also provides tools (e.g., worksheets), training, and ongoing support.
Evaluate local infrastructure: The program is more likely to be successful if an existing infrastructure is available in the community to support an integrated medical debt resolution effort. Local infrastructure can include capacity for pro bono legal services, financial stability services (e.g., foreclosure prevention or asset building), data tracking, case management, and formal outreach.
Assess organizational infrastructure: Organizations that already have trained outreach workers and existing case management protocols can more easily adopt a medical debt resolution program, as these workers can integrate the medical debt counseling function into existing projects at work.
Analyze the magnitude of the local problem: A quantitative or qualitative analysis of the local medical debt problem will help convince potential strategic partners to participate in the program. The Access Project can help collaboratives gather data to assess local needs.
Develop new partnerships: Sponsoring organizations often form partnerships based on existing referral relationships. However, program adopters should also try to attract new strategic partners, such as legal services agencies, asset building groups, public agencies, medical providers, and groups involved in outreach and enrollment for public and private programs.
Contract with the Access Project: Rather than devoting internal staff time to the program, consider contracting with the Access Project to provide direct assistance to clients with medical debt. Access Project staff will refer clients back to the partner organization after helping them resolve their medical debt. This approach allows partner organizations to assess the intervention before having to commit to building internal capacity for resolving medical debt.
Sustaining This Innovation
Monitor program impact: Program leaders should track outcomes on an ongoing basis to determine impact and measure return on investment.
Periodically assess local efforts: Assess the impact of the medical debt resolution program with regard to whether the referral process is working, data is being captured, and outcomes are being achieved.
Look for opportunities to expand services: For example, even after having their debt levels reduced, many individuals still cannot afford to pay the reduced and renegotiated amounts. Some may still experience difficulty accessing care. In these instances, the program might consider ways to help clients access more affordable credit, such as by creating a revolving loan fund to help pay the reduced debt. It may also consider appropriate referrals to community partners that address needs such as savings/asset preservation, housing security, financial counseling, clinical pathways, and ongoing issues related to health care access.
Build strong relationships with medical providers and public programs: The medical debt resolution program not only helps individuals resolve their own medical debt but can also help providers get paid on debt that was previously uncollectible. The collaborative can work with medical providers to show a return on investment and justify ongoing support.
Connect with financial service providers: A collaboration with lenders and other financial service providers may prove to be mutually beneficial because clients who are able to resolve their medical debt are more likely to be successful in paying their other bills.
Develop strategies to help clients address credit issues arising from medical debt: It is common for clients to experience credit-related problems due to unpaid medical bills that have been sent to collection agencies and reported to credit bureaus. Having a protocol that includes strategies to address credit issues that arise from medical debt, as the Access Project has done, is necessary to addressing overall debt burden.
Mr. Rukavina has not indicated whether he has financial interests or business/professional affiliations relevant to the work described in this profile; however, information on funders is available in the Funding Sources section.
Cohen A, Pryor C. In debt but not indifferent. Chapter 58 in the Access Project's Medical Debt Resolution Program. The Access Project. 2008. Available at: http://www.accessproject.org/adobe/InDebtButNotIndifferent.pdf.
Cohen A, Pryor C. Six ways to reduce medical debt in Massachusetts. The Access Project. October 2009. Available at: http://www.accessproject.org/adobe/SixWays.pdf.
Garcia J, Rukavina M. Medical debt fact sheet: how debt from out-of-pocket medical expenses impacts low- and middle-income families. Demos & The Access Project. December 2009. Available at: http://www.demos.org/sites/default/files/publications/FACTSHEET_MedicalDebt_2009_Demos.pdf.
Collins SR, Kriss JL, Doty MM. Losing ground: how the loss of adequate health insurance is burdening working families—findings from the Commonwealth Fund Biennial Health Insurance Surveys, 2001–2007. The Commonwealth Fund; August 2008. Available at: http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=700872.
The Access Project. Medical Debt Overview PowerPoint presentation.
Kaiser Commission on Medicaid and Uninsured. What are the financial consequences of medical debt? 2003 Health Insurance Survey.
Home sick: how medical debt undermines housing security. The Access Project. November 2005.
Garcia J, Rukavina M. Medical debt fact sheet: how debt from out-of-pocket medical expenses impacts low- and middle-income families. Demos & The Access Project. December 2009. Available at:http://www.demos.org/sites/default/files/publications/FACTSHEET_MedicalDebt_2009_Demos.pdf.