Medical debt affects families’ financial health and well-being. People with medical debt are likely to forgo needed medical care and face an elevated risk of personal bankruptcy. In a recent brief, we explored which county characteristics were correlated with medical debt and found that an area’s underlying health and health insurance coverage were the most predictive factors of the county’s share of adults with medical debt in collections. In this fact sheet, we explore whether hospitals’ profitability and charity care have any clear correlation with medical debt in collections at the hospital market level, defined by hospital referral regions (HRRs).
We find the following:
- Average rates of HRR-level hospital operating margins, or profitability from operating activities, are unrelated to medical debt.
- The amount of charity care hospitals deliver in an HRR is positively related to medical debt. In other words, hospitals in areas with high concentrations of medical debt in collections tend to have high levels of charity care.
These results highlight the importance of policies that help patients pay their medical bills—particularly policies that expand subsidized or affordable insurance coverage—for the financial well-being of both individuals and hospitals.