Helping Consumers Avoid Bankruptcy

Updated on December 17, 2018

By Andy Goldstone

Medical debt is the number one cause of bankruptcy in the U.S. Unlike other financial obligations, such as car loans or credit cards, most medical debt is not generally brought on by choice and accompanied by a signature with an interest rate. Rather, medical debt is brought on by unforeseen circumstances, such as diseases or accidents, which require healthcare on a temporary or sustained basis. 

American consumers are already experiencing financial stress due to rising federal interest rates, stagnant wages, and their individual debt obligations including ‘higher than ever’ outstanding credit card balances. Thus, adding hundreds, or even more likely thousands, of dollars in new bills from something like an emergency surgery pushes people beyond financial sustainability and into bankruptcy. 

This, unfortunately, is not a new phenomenon: The Consumer Financial Protection Bureau reported that 2016 healthcare related debt (the most recent year with data available) was 46.8%, which is nearly half of all collected debts in the U.S. 

Furthermore, an end of year analysis found that patients experienced an 11% increase in average out-of-pocket healthcare costs during 2017. These costs increased to $1,813 at the conclusion of 2017, compared to $1,630 one year earlier. In 2017, more than half (51%) of all individual healthcare visits resulted in patient out-of-pocket costs greater than $501. 

RIP Medical Debt, a 501(c) (3) national nonprofit, helps consumers faced with mounting medical bills navigate these payment challenges. The nonprofit utilizes TransUnion credit data for the purpose of locating, purchasing and forgiving medical debt that meets specific criteria for RIP’s donors. 

RIP is helping relieve deserving Americans, including, but not limited to military veterans, of medical expenses that they are unable to pay. They accomplish this with donor funds to locate and then purchase unpayable medical debt. 

Consumer Financial Assessment at Scale:
America has more than 200 millionadults using its healthcare system, and 28.2 million of those Americans are uninsured.  With so many people troubled by unpayable medical bills, RIP Medical Debt was challenged with how to find the most deserving debt to pay off from extremely large pools of debt. TransUnion Healthcare’s tools help identify those individuals who are truly charity-worthy.   

“Our non-profit uses donor funds to locate and then purchase unpaid and unpayable medical debt,” said Craig Antico, CEO and co-founder of RIP Medical Debt. “Using advanced data analytics, we further address the difficult problem of identifying those individuals who are truly charity-worthy and take the next step of actually removing that debt burden.” 

RIP Medical Debt makes use of a financial assessment solution to both evaluate portfolios of debt they own and to locate new medical debt. The nonprofit utilizes credit data to purchase and forgive medical debt that meets specific donor criteria. The RIP and TransUnion Healthcare partnership provides a responsible and socially-conscious solution for the medical and collections industry and ensures that the charity’s supporters are able to maximize their donations.

Identifying Charitable Cases and Bad Debt at the Start

Technology plays a fundamental role in streamlining the healthcare patient financial evaluation by using analytics to measure their levels of insurability, eligibility for charity care and their propensity-to-pay. 

For both the identification of potential charity cases, and in the case of a hospital evaluating if a patient can pay their medical bills, an optimal payment workflow can be put in place that is based on the patient’s unique financial situation. 

This process must consider the patient’s ability to pay. Communicating payment options to patients early in the process can help prevent bad debt. More often than not, bad healthcare debt is directly related to the financial clearance process, so organizations must make every effort to identity the situation early. 

TransUnion Healthcare prides itself on using its data to help both business customers and consumers. Through the partnership with RIP Medical Debt, those who truly need help with medical debt will be more accurately and efficiently identified. That’s using Information for GoodSM.

Bio: Andy Goldstone 

In his role as a business development, strategy, and thought leader with TransUnion Healthcare, Andy Goldstone has contributed to the success of hospitals, payers, and technology companies within the medical industry since 2013. He helps clients solve complex issues by finding them the right data and solutions to answer their questions and helps shape the future of data assets and software platforms. 

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.