Medical Debt in the U.S. Continues to Escalate

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November 6, 2014 by Lisa Brammer

The Affordable Care Act was established to reduce medical spending in the United States, but despite these recent changes to health care policy, Americans continue to have problems with medical debt. According to a recent study by NerdWallet Health the problem is getting worse—Americans are spending more of their take home pay on medical bills than ever before.

Last year, NerdWallet reported medical debt as the leading cause of personal bankruptcy and results of this year’s study support their conclusion that Americans cannot afford their medical care.

Key findings in this year’s report show medical debt as the largest category of consumer debt in collections. Each year, Americans pay three times more for third-party medical debt collection than they do for bank and credit card debt combined. NerdWallet Health estimates that this year (2014) approximately 51 million Americans could be contacted by a collection agency regarding a medical debt.

According to the NerdWallet study, 63% of American adults said they’ve received a medical bill that cost them more than they anticipated and unsurprisingly 73% thought they could make better health care decisions if they knew the cost of medical care before receiving it.

Determining total costs for something like a hospital stay is difficult since there are so many variables to consider, e.g., facility charges, physician charges, prescription drugs, ancillary services like physical therapy expenses, and others, but the Wisconsin Hospital Association information center has developed a web-based price-transparency resource,, that provides hospital-specific information about healthcare services and charges. Consumers can request information for Inpatient services, Outpatient surgeries, Emergency Department and Urgent Care visits, Observation services, and other ancillary services like therapies and radiology.

The NerdWallet Health study found a huge discrepancy in hospital charges—some hospitals charge 50 times more for the same inpatient treatment. Regional differences are significant with the most expensive prices found in California and New Jersey. Midwestern and Southern states boast the most affordable prices. For example, hospital inpatient treatment for severe intestinal bleeding, perforation, obstruction, infection was found to cost the most in California with a charge of $291,965.00, the lowest charge for treatment was $5,379.00 in Arkansas.

Findings indicate the bad news is not just for consumers. NerdWallet estimates that in 2014, U.S. hospitals will provide over $50 billion worth of uncompensated care—that’s a lot of unpaid care.

The amount of uncompensated care is important. As we’ve said in this blog on multiple occasions, the saying “There is no such thing as a free lunch” also applies to debt. The cost for providing hospital care must ultimately be paid for by someone. Unpaid medical bills and inadequate reimbursement by government insurance programs (think, Medicaid and Medicare) end up affecting everyone because they contribute to the increase cost of health care.

Founded in 1950, United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing highly effective, customized one on one management and recovery solutions for our business partners. We offer pre-service collection solutions as well as traditional back-end collections. Visit our website at or call 877-723-2902.


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