SAN FRANCISCO, Oct. 8, 2014 /PRNewswire/ -- NerdWallet Health, a consumer advocacy site committed to helping patients make smarter decisions and save money on their health care, today released a study finding the medical debt crisis in America is worsening despite advances in health care policy.
Last year in a separate report, NerdWallet Health concluded medical debt is the largest driver of personal bankruptcy: nearly 60 percent of all personal bankruptcies in the United States are caused by medical debt. In the follow-up to last year's study, NerdWallet Health investigated the mounting financial obstacles facing the American patient.
Key findings from the study include:
- While households lost $2,300 in median income between 2010 and 2013, their healthcare expenses increased by $1,814.
- Medical debt is the largest category of consumer debt in collections. 1 in 5 American adults will be contacted by a debt collection agency about medical debt in 2014.
- According to an online survey commissioned by NerdWallet and conducted by Harris Poll, 63 percent of American adults have received medical bills that cost more than they expected.
- NerdWallet Health compiled data from across all Medicare Compliance Reviews of U.S. hospitals conducted by the Office of the Inspector General in 2013 and found rampant billing errors led to an average medical bill overcharge of 26 percent.
- Hospital billing is complex and varies drastically. NerdWallet Health found for the same inpatient treatment, one hospital can charge more than 50 times as much as another hospital. Furthermore, for the 100 most frequent inpatient procedures covered by Medicare, there is an average of 25 times difference between lowest and highest charges.
- The survey conducted on behalf of NerdWallet Health by Harris Poll also shows 73% of adults say if they knew the cost of medical care before receiving a treatment, they could make better health decisions.
"The system Americans trust for their medical care is not very trustworthy when it comes to providing price transparency for procedures and error-free billing," said Christina LaMontagne, author of the study and General Manager of NerdWallet Health. "Many Americans think they are getting the best care in the world, and yet the American household is more indebted to the medical system than ever before."
Pat Palmer, a nationally renowned medical bill expert and founder of Medical Bill Advocates of America, agrees with NerdWallet Health's findings.
"In my 20 years of medical bill advocacy work, our organization has saved clients over $100 million. Most of that money was saved after identifying errors and overcharges on hospital billings and improper insurance reimbursements. Over 80 percent of the medical bills clients send to us have errors. Our clients feel overwhelmed by the cost of health care. Why is our system so complicated that regaining health means losing financial well-being?"
NerdWallet Health developed this report by analyzing federal data from the Centers for Medicaid and Medicare, consulting the Association of Credit and Collections Professionals and commissioning a unique study, conducted by Harris Poll, to understand how medical bills are affecting the American consumer. This survey was conducted online within the United States from August 13-15, 2014 among 2,016 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Kathryne Mezzanotte - [email protected].
Download the complete study
Download video of NerdWallet Health's General Manager discussing the study
About NerdWallet Health
NerdWallet Health offers consumers financial advice and tools to reduce their medical bills. Our mission is to change lives for the better by providing financial education and empowerment so that people can control their healthcare costs.
NerdWallet is focused on helping people lead better lives through financial education and empowerment. When it comes to credit cards, insurance, loans or expenses like hospital costs, consumers make almost all their decisions in the dark. NerdWallet is changing that by building accessible online tools and providing research and experts that can't be found anywhere else, all to balance consumer finance in favor of the consumer. We call it putting knowledge in your wallet.
NerdWallet is a bootstrapped startup headquartered in San Francisco with more than 100 employees. The company is set to double in size next year.