We have a new name — RIP Medical Debt is now Undue Medical Debt.
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Response to Working Paper

Today the New York Times published a story about an economic research working paper assessing Undue Medical Debt’s model from the years 2018 – 2020. The study suggested that medical debt relief for individuals two times or below the federal poverty level, overall, is not effective at improving one’s mental health, credit score or sense of financial distress.  

The research findings are, from the outset, 6-years-old and fortunately reflect a lot of the changes we’ve already made independently during these years, including increasing who qualifies for medical debt relief to those four times the federal poverty level (to reflect the increasing burden of medical debt on the middle class and the impact of the pandemic) and sourcing medical debts directly from providers like hospitals (not just from debt buyers and collection agencies) to erase debts sooner in their lifecycle and encourage people to reengage with the healthcare system.  Relieving debts for the middle class too reflects the fact that insurance is increasingly leaving people with unpayable out-of-pocket costs and this population is more likely to benefit from debt relief as they face fewer, additional stressors.

As well, we’ve built out our partnerships with community organizations that offer upstream support like financial counseling and insurance coverage navigation and we’re collaborating with local governments across the country to concentrate debt erasure to a specific locality to deepen our impact and underscore the need for policy fixes. These efforts move the needle on financial security because working with local governments and local providers in a specific locality allows us to capture more debts from more hospitals, increasing the likelihood we relieve people of multiple debts. And in the past two years we’ve built out an entire policy arm of the nonprofit so we can look towards upstream solutions to the medical crisis while also helping people here and now with essential medical debt relief. 

As the New York Times story notes in its coverage of the research, we’ve grown from “a tiny nonprofit” to a “force in health care philanthropy” over the past decade.  

With all of this in mind, further research is required to understand the nuances of our work today, which is why we are exploring additional evaluation of our impact with potential academic partners. We look forward to building on this first assessment of our model (albeit narrow in focus) as it sheds light on additional, unexplored dimensions of debt relief that still need to be studied like willingness to go back to a doctor, household budget choices and mental health benefits over time – not assessed once over the phone while reminding someone of their existing debts as in this latest study.  

And as the researchers themselves acknowledge, during the study period relevant medical debts stopped being reported to the credit bureaus and changes recently implemented by the major credit reporting agencies make the study’s findings on credit utilization and access much less relevant to the current landscape.   

I believe our work has played a role in putting medical debt on the radar of policymakers and created pressure for changes like removing medical debt from credit reporting, an outcome I am proud of. Our intervention also has high impact for very little investment, which cannot be overlooked.

We hear every day from constituents that we have had a positive impact on their lives by eliminating their burdensome medical debt, a debt that is the leading cause of bankruptcy and we are committed to continuing this work until our intervention is no longer needed. 

One constituent of ours, Drew, shares: “I know seeking medical attention is not optional, but absolutely necessary… $1,000 unexpected bill was not something I could afford. The heavy burden of the debt on both my financial and mental health was mounting… It’s such an enormous relief to know my medical debt, which I received through no fault of my own, is no longer dragging behind me like a ball and chain.” 

And from Kyra, “This [medical debt relief] has given me my life back” 

-Allison Sesso, Undue Medical Debt president/CEO

Other recent studies on medical debt

  • A study of 2,943 US counties found populations with higher rates of medical debt are associated with poorer mental and physical health, more years of life lost and higher mortality rates.
  • JAMA, March 2024
  • Coinciding with the credit bureaus removing medical debts under $500 from people’s credit scores, those who had debts on their credit score in August of 2022 saw a 30-point increase a year later, on average.
  • Urban Institute, November 2023
  • A study similarly found a 25-point increase in credit scores on average after the removal of medical debt by the credit bureaus. “People also experience increases in the amount of credit available to them in installment and revolving accounts, and in the likelihood of a mortgage inquiry.”
  • Consumer Financial Protection Bureau, April 2023

What economists are saying about the research

“We are not saying with this study that medical debt relief doesn’t help people,” says Neale Mahoney, study co-author and the George P. Shultz Fellow at the Stanford Institute for Economic Policy Research. “The overriding question now is, how do we find the sweet spot between low cost and high impact?” Mahoney’s previous research has found that those with medical debts are less likely to seek the care they need.

Health Economist Benjamin Chartock, not involved in the study, shares, “There’s a high number of people with significant medical debt and little conventional resources to address this debt. When people receive support from Undue Medical Debt the general response is nearly universally favorable. This initial research affirms RIP’s impulse to look under the hood and fine-tune how it can improve upon its first decade of work and explore further, more informed research.”  

From advocates

“As the leader of a financial empowerment nonprofit, I firmly believe in the merits of Undue Medical Debt’s work. The research is straightforward: medical debt is prevalent in vulnerable populations because of the simple fact that emergency or essential care is unaffordable. Undue Medical Debt has built a solution, and the awareness, to start to eradicate this inequitable debt burden.

In our work serving working families, we see that the cost of housing, food, childcare, and health care together result in debt loads and stress levels that are difficult to root out with any one intervention. We commend Undue Medical Debt for their commitment to evaluating their work and encourage their continued efforts to tackle medical debt both via continued debt buying as well as their research and advocacy. I look forward to seeing further studies on how Undue Medical Debt’s growth and evolution impact its beneficiaries.”

Justine Zinkin, CEO, Neighborhood Trust Financial Partners

“In Cook County, our experience with medical debt relief has been promising. Through concerted efforts in partnership with Undue Medical Debt, we’ve assisted over 200,000 residents, forgiving nearly $350 million in medical debt. What we’ve heard from our program participants and feedback from the community tell a story of relief and gratitude. 

We also recognize that medical debt relief is just one piece of a larger puzzle. These efforts are part of an equitable, comprehensive strategy to support our residents’ financial and mental well-being.”

Toni Preckwinkle, President, Cook County Government

“The randomized controlled trials (RCTs) evaluated Undue Medical Debt’s approach during 2018-2020 … Given the County priority on addressing medical debt, Public Health experts reviewed this analysis, and our assessment is as follows:

  1. Evaluating interventions and ensuring evidence-based investments for public health is crucial, and we note that Undue worked with independent researchers to evaluate their work.
  2. RCTs are a powerful tool for ensuring internal validity but cannot be generalized beyond the specific context in which they are conducted.
    • The context in which the RCT was conducted is different from today in several aspects, including changes including community awareness, eligibility criteria, source of debt, post-relief prevention, and more.
  3. Study outcomes were limited to medical and consumer credit report debt and a one-time mental health assessment.
    • This underestimates total debt which includes informal sources of borrowing.
    • Mental health improvements are best assessed longitudinally.
    • Other important outcomes including healthcare behavior are not available.
  4. The RCT results do not align with the totality of evidence across the scientific literature including cross-sectional and observational studies on medical debt.

Based on the above, Public Health continues to recommend medical debt relief as an important adjunct to a series of preventative interventions to address medical debt.”

Los Angeles County Department of Public Health

“As a retired, clinical psychologist with research training it’s important to take these mental health findings with a grain of salt. Overall, in my view, there are methodological problems that would have been caught in a peer reviewed process.  To their credit, the authors emphasized that the publication was a “working paper,” and not peer reviewed. Regarding the study, there was, on average, 13 months between having debt relieved, and returning the survey. Over a year between relief and a one time self-report on depression “for the last two weeks.” The questionnaire used to measure depression, PHQ-8, measures clinical depression, which seems like a severe instrument to measure against one time medical debt relief. Additional, nuanced research is required to understand these findings which, to any lay person, are quite unintuitive – how would medical debt relief make someone more depressed?”  

Dr. Wayne Gregory