The current medical debt crisis in the United States is overburdening bankruptcy court.[1] Debtors are filing bankruptcy because they are unable to pay their medical debts.[2]  An insurance mandate will not provide enough assistance for those with insurance and without insurance to eliminate all medical debt and avoid bankruptcy. There needs to be a lowering of medical nonpayment rates. The current archaic medical billing and collections practices used are ripe for alternative dispute resolution.  It is good business for hospitals and insurance companies to invest in alternative dispute resolution to recoup a portion of the debt owed, encourage good customer service, rehabilitate their reputations and increase profitability.

There are multiple situations which lead to nonpayment of medical bills.[3]  When the person is gainfully employed, there is the assumption the health insurance provided by the employer will prevent high medical costs.  In fact, 75% of people who filed for bankruptcy because of medical debts had health insurance.[4]

[1] David  Himmelstein, Deborah Thorne ,  Elizabeth Warren ,  Steffie Woolhandler, Medical Bankruptcy in the United States, 2007: Results of a National Survey, The American Journal of Medicine (Accessed on Mar. 4, 2012),http://www.amjmed.com/article/S0002-9343 (09)00404-5/abstract.

[2] David Himmelstein , Deborah Thorne, Elizabeth  Warren, Steffie Woolhandler,  Illness and injury as contributors to bankruptcy, Health Affairs (Accessed on Apr. 8, 2012), http://content.healthaffairs.org/cgi/reprint/hlthaff.w5.63v1.

[3] Theresa Tamkins, Medical bills prompt more than 60 percent of U.S. bankruptcies, CNN HEALTH, (Accessed on Apr. 8, 2012),  at http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH.

[4] Id.

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By Cynthia Pasciuto

Cynthia Pasciuto is an attorney, consultant, mediator and educator in Massachusetts who has taught at Bentley University, NIWH and NESA.