SEIU study confirms link between medical debt and personal bankruptcies in Lane County, OR

Mirroring national trends, study finds that 72 percent of personal bankruptcy filers owe money for a medical-related debt, even after the Affordable Care Act’s expansion of healthcare coverage.

Act Now for a Healthy Oregon today released an issue brief analyzing 2014 personal bankruptcy filings in Lane County, Oregon. The report found that 72% of bankruptcy filers owed money for medical-related debt, with a majority of the medical debt owed to an Oregon hospital system. The total medical debt in personal bankruptcy filings added up to $5.6 million for 2014.

“Even with expanded healthcare coverage through the Affordable Care Act, we still often hear from people in Oregon and Washington that rising hospital costs are pushing already struggling families over the edge, but until now we have lacked clear data about local impacts,” said Meg Niemi, President of SEIU Local 49. “This study confirms that there is a real and troubling connection between the high cost of medical care and personal bankruptcy in our local communities.”

The ten largest creditors in Lane County—ranked by sum of liabilities and excluding collection companies—are:
1. PeaceHealth Sacred Medical Center – $1,196,584
2. McKenzie-Willamette Medical Center – $881,847
3. PeaceHealth – $788,949
4. PeaceHealth Medical Group – $221,295
5. Oregon Medical Group – $148,143
6. Slocum Center for Orthopedics – $131,526
7. Radiology Associates – $78,742
8. Eugene Emergency Physicians – $74,928
9. Northwest Anesthesia Physicians – $74,657
10. Cottage Grove Community Hospital – $63,107

The hospital system holding the largest amount of debt in Lane County is non-profit PeaceHealth, which holds a total of 39% of the medical debt in the county, or a total of $2,344,863.

In one example included in the analysis, a patient who is also an employee at PeaceHealth had her wages garnished after being unable to pay her medical debt (U.S. Bankruptcy Court Case #15-62498-fra7).

Said Hollie Murphy, a certified nursing assistant at the hospital:

“I was forced into bankruptcy after being unable to pay for all the costs associated with a surgery I received. There were fees from the hospital, surgeon, anesthesiologist and more. I’m a caregiver at PeaceHealth Sacred Heart, but my insurance still left me with thousands of dollars I couldn’t pay. I tried to pay what I could, but was sent to collections and eventually had my wages garnished. This meant that after the various deductions, paying healthcare premiums for me and my family, and my wages garnished for medical debt for my surgery, I was left with only around $300, even with me working full time. That made it very difficult to pay rent, electricity, and other costs of daily living. My mother, even though on a fixed income herself, helped with groceries so we could have food on the table.”

The study also found that more than 40 percent of those who filed for bankruptcy and had medical debt owed over $5,000 in medical expenses.

“With non-profit hospitals receiving significant tax breaks as ‘charitable’ organizations and simultaneously sending people to collections, it’s time to take a closer look at a broken system and strive toward a community where we all have access to affordable, quality care,” said Niemi.

About SEIU Act Now for a Healthy Oregon

SEIU’s Act Now for a Healthy Oregon campaign is working to achieve the goal of keeping our communities healthy by achieving the Triple Aim: improving quality, enhancing access, and increasing affordability of care. SEIU is the largest healthcare union in the country with 2.1 million health care workers. In Oregon and SW Washington, SEIU represents 15,000 health care providers across the continuum of care and is the second largest purchaser of healthcare in the state.