The Strange History of Medical Debt

Stimulus | Helping Doctors overcome burnout, excel in leadership, and unlock their most fulfilling careers

Medical debt has a strange and storied history in America. Stretching back to colonial times, physicians and patients alike have grappled with its harsh realities. In recent years, hospitals have resorted to selling medical debt to third parties, who then aggressively pursue patients. In today’s episode, medical historian Luke Messac, MD, PhD, guides us through the past and present landscape of medical debt, examining perspectives from patients, providers, hospitals, and governments. We delve into a form of indentured servitude in the name of debt clearance, the birth of nonprofit hospitals, a pivotal shift in the 1980s, feasibility of operating healthcare under free market principles, medical economics in the 1600s, hospitals suing patients, and the emergence of medical debt as its own thriving industry.

💡 Check out our Free Resources specifically designed to address pain points in medical practice💡

Guest Bio: Luke Messac MD, PHD emergency physician and medical historian whose research focuses on health care's history and political economy. Luke is an attending physician at Brigham and Women’s Hospital, an Instructor in Emergency Medicine at Harvard Medical School, and the author of two books, No More to Spend: Neglect and the Construction of Scarcity in Malawi's History of Health Care and most recently, Your Money or Your Life: Debt Collection in American Medicine.

We Discuss:

• Hospitals suing patients over debt
• The Service Credit Program | Indentured servitude in the name of debt clearance
• Nonprofit hospitals were born out of the almshouse tradition, where charity care was part of the mission
• The 1980s were a turning point for medical debt in the United States
• With cuts in government medical spending, hospitals cut costs by limiting charity care and aggressively pursuing unpaid debts
• Why healthcare cannot operate in a pure free market
• Hospitals used to refuse care to patients and the courts supported it
• Patient dumping and the rise of EMTALA
• Collecting money from patients has been an issue for hundreds of years
• In the 1600s, doctors could be arrested for charging too much
• Debtor's prison
• Does suing patients to recover medical debt improve a hospital's bottom line?
• In the early 2000s, Yale New Haven Hospital put liens and foreclosing on patients' homes as part of a debt collection strategy
• Medical debt collection has now become a thriving industry
• How third-party medical debt collectors operate
• RIP Medical Debt buys and forgives medical debt
• Is buying and forgiving medical debt better or just forgiving it upfront?
• Dollar For is a nonprofit focused on helping patients navigate financial assistance programs
• Some hospitals are making financial assistance easier to access
• State legislation is starting to address medical debt collection
• National approaches to medical debt
• Medical debt is prevalent around the world, but the US stands apart among wealthy countries
• The consequence of copays
• Paul Farmer and caring for the destitute sick.
• The jungle hospital that's carrying out Paul Farmer's vision in Guatemala
• Rudolf Virchow - Physicians are the natural attorneys for the poor

Mentioned in this episode:

1 on 1 Physician Coaching

I work with physicians to help them flourish in medical practice. If you're feeling stuck, burned out, or in trouble at work because of communication or conflict, check out our FAQ page for more info. Ready for real change? Book a discovery call. It’s free, low-pressure, and will give you clarity on your next steps.

Physician Coaching FAQ

Never Lame. Never Spammy. Always Fresh.

If you’d like a few minutes of career-elevating curated kickassery delivered to your inbox, sign up for our newsletter.

Sign up for our bi-weekly newsletter

Do Stimulus a solid and leave us a review on your podcast app

Our show grows in two ways: word of mouth and reviews. If you’ve enjoyed our episodes, consider leaving us a 5-star review and a few kind words. Think of it as spreading good vibes. Thanks in advance—you rock!