Hardship Financing to Pay for Health Care: Not Just A Problem For the Developing World

As I read this week’s collection of readings, especially “Borrowing and Selling to Pay for Health Care In Low- And Middle Income Countries,” I was struck by the fact that the problem of poor families being forced to borrow and sell to cover health care costs is not exclusive to poor countries. Many of the issues we discuss in class are problems that primarily affect the developing world. For example, most students in our class will never have to worry about acquiring a bed net to protect against malaria, giving birth in unsanitary conditions or getting access to anti-retrovirals. However, falling into economic hardship as a result of a catastrophic health event is a real worry for many Americans, and I know that many of my peers have forgone medical treatment because they were worried about cost.

Reading about families in Africa who were forced to sell items such as livestock or furniture to pay for health expenditures brought to mind a rural Iowan family that I had gotten to know while working there during the 2008 presidential caucuses. I visited with this particular family often and they were big supporters of my candidate because of her proposal for health care reform and their own personal experiences in the current health care system.

The family farmed for a living and the wife also ran a small business out of her home. They would have had to buy their own policy to get health insurance, but the husband had epilepsy and this pre-existing condition made it impossible for them to afford insurance. They were able to get by until the husband had a heart attack and required surgery. To pay for these costs out of pocket, the family was forced to sell off half of their farm and some farming equipment. As a result, they were bringing in much less income from farming and went bankrupt trying to pay for the hospital bills. This family’s plight really brought home the issue of equity in health care expenditures. It’s the poorest families that are hit hardest and feel the affects longest when there is a catastrophic health event in the family. Had the family been upper-income to start with, they would have had a health insurance plan that would probably cover almost all costs associated with a heart attack. But for a poor or even middle- to- lower income family, such an event triggers a domino effect of financial hardship. By selling the land and equipment that they used to make their income, the family reduced their income for the foreseeable future, making it harder to make payments in other areas like utilities and credit cards, which impacts their credit rating for years to come and makes it nearly impossible for them to recover financially.

It is shocking to me that stories like this are commonplace in one of the wealthiest countries in the world. Hopefully the new health care reform legislation will go a long way towards ensuring this kind of thing becomes less common in the future. Still, I wonder why there is no consensus on the idea that the costs of a catastrophic health event should not be borne out of pocket by the patient. Why isn’t there consensus in the United States government or in many other low- and- middle- income countries that no one should be forced into poverty, massive debt or bankruptcy to pay for health expenditures? I am genuinely curious as to the justification for why measures to prevent health care-related bankruptcy were so vehemently opposed by so many Americans for so long. It seems that it would be in a government’s best interest to prevent its citizens from falling into poverty from health care expenditures.

As I think even more about the Iowan family described above, I wonder if the husband’s heart attack could have been avoided if he had been able to get health insurance. If he had been able to afford regular visits with a physician, maybe risk factors for AMI would have been identified early on, and he could have taken steps to lower his risk – repairing blocked arteries, changing his diet, taking medication. But he was missing out on any chance for preventive medicine because their lack of health insurance made non-emergency care prohibitively expensive. So, the upper-income family that I used as an example may never have experienced a heart attack in the first place if the husband was regularly seeing a physician and was able to identify risk factors and take preventive measures.

We seem to agree here in the United States that resources should be invested to treat and prevent HIV/AIDS, to eradicate malaria and tuberculosis. But we don’t agree that resources should be invested to ensure equity in health care expenditures, or to prevent families from going bankrupt from catastrophic health events. Why is that? Is it too difficult for people to make the logical leap from the health event to the hardship financing and poverty that eventually result? Is it too difficult to make the link between lack of preventive care and the eventual negative health events that result? How can we frame the issue so that it gets the attention it deserves? These are the questions that the topic brought up for me. It will take more than a blog post to answer them, but these questions deserve more attention from health care policy makers in the United States and around the world.

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