Researchers challenge link between medical costs, bankruptcy

February 28, 2006|Associated Press

WASHINGTON -- A report that expensive illnesses lead to nearly half of all personal bankruptcies is being challenged by researchers who looked at the same data and concluded that such costs lead to fewer than one in five bankruptcies.

The study looked at 1,771 bankruptcy filers in California, Illinois, Pennsylvania, Tennessee, and Texas. It said illnesses and medical bills were cited as the cause, at least in part, of 46 percent of the bankruptcies.

That original study, by Dr. David Himmelstein of Harvard Medical School and colleagues, was published on the Internet by Health Affairs last year.

The challenge, by David Dranove and Michael L. Millenson of Northwestern University's Kellogg School of Management, appears in today's Internet edition of that journal.

A reanalysis, funded by a health insurance trade group, identified people who said illness or injury was the cause of bankruptcy and also said medical bills contributed to it.

That led Dranove and Millenson to conclude that ''medical expenditure bankruptcies" constituted 17 percent of all bankruptcies.

For that 17 percent, the researchers could not determine whether medical costs were the top cause of bankruptcy.

Himmelstein and colleagues said Dranove and Millenson ''manipulate the data far beyond legitimate reinterpretation."

For example, they said, the new interpretation excludes people who took out second mortgages to pay medical bills and then said their bankruptcy filing was ''to save our home."

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