The House Committee on Energy and Commerce

Ms. Melissa Jacoby
Associate Professor
University of North Carolina at Chapel Hill

United States House of Representatives
Committee on Energy and Commerce
Subcommittee on Oversight & Investigations
Hearing on "A Review of Hospital Billing and Collection Practices"
June 24, 2004
Statement of
Prof. Melissa B. Jacoby

Thank you for the opportunity to participate in this important hearing.I approach this issue from the perspective of a law professor who studies and teaches bankruptcy, contracts, and related subjects.While as a member of the Temple University faculty in Philadelphia, and now as I join the faculty of the University of North Carolina at Chapel Hill, I have been studying the impact of indebtedness and debt collection on individuals and families with illness or injury.

In the current health care environment, patients often are debtors of their medical providers.[1]Characterizing medical providers as creditors means little independently; the law gives creditors a set of tools to coax or require their debtors to repay,[2] but does not require that creditors use them.Creditors generally exercise their discretion in using, or refraining from using, their debt collection toolbox depending on the circumstances.Thus, for example, credit unions on the whole take a different approach to debt collection than retailers.

A confluence of circumstances makes the hospital billing and collection situation particularly troubling.Hospitals have zealously used their debt collection toolbox even against patients who did not expect this liability (at all, or of this magnitude), are of modest means,[3] and may be suffering income loss alongside their illness or injury.[4]Hospitals engage in debt collection activities amidst allegations that these practices conflict with their missions, and despite arguments that they already receive significant governmental support to subsidize their care of modest income patients.To the extent that hospitals pursue collection before dispositively determining charity care eligibility,[5] some patients subject to collection for undiscounted bills never should have been considered debtors in the first place.[6]

The patient-hospital debtor-creditor relationship is different from many others in its origin.If a consumer does not like the terms a store offers for the purchase of a television, we expect that the consumer should be able to walk away.As one court put it, however, when a loved one legitimately needs medical care, "the option of walking away from the deal [is] simply unrealistic."[7]Patients or family members often seek hospital care and sign various hospital documents and agreements under trying circumstances.[8]These documents -- frequently the basis of the hospital's creditor status[9] -- may require that the patient or loved one promise to pay the full-charge rate, and sometimes have required payment of attorneys' fees, costs, interest, or even penalties, if the bill goes to collection.

Hospital decision-makers may believe there is little harm in charging full price and trying to collect before writing off these accounts as bad debt.Hospitals also may be responding to incentives built into the complex regulatory environment; even if current law and regulations do not expressly preclude discounts and more lenient collection practices, it likely is easier to ensure compliance with the regulatory scheme by imposing full charges and engaging in assertive collection.

Given this situation, it is important to set the record straight: hospital billing and collection practices can adversely affect patients and their families whether or not those practices produce payment or ultimately are written off as bad debt.

Medical bill collection activity hurts patients' credit rating whether or not the activity produces payment for the hospital.In the words of Federal Reserve researchers, "[p]erhaps the most important factors considered in credit evaluation are a consumer's history of repaying loans and any evidence of money-related public actions or non-credit-related collections."[10]These researchers estimated that medical bills accounted for nearly one fifth (18.2%) of court judgments recorded on credit reports, and more than half (52.2%) of collection agency actions reported to credit bureaus, many for rather small amounts of money.[11]When a collection agency action, lawsuit, judgment, and lien all are listed on a patient's credit report, the adverse effects of one default not only multiply, but linger.[12]

As suggested above, the credit report and credit score are key determinants of whether a patient will receive credit and, if so, what the terms will be.[13]In addition, the Fair Credit Reporting Act permits credit reports to be used for a variety of other purposes, such as employment-related inquiries.[14]Thus, one expensive trip to a hospital, followed by zealous collection and reporting, can bring about a host of unexpected negative effects.

Bankruptcy researchers have discovered that almost half of personal bankruptcy filers have significant medical debts and/or say that illness or injury was a reason for their bankruptcies.[15]A variety of studies find between one third to more than half of bankruptcy filers owed debts directly to medical providers at the time of filing,[16] and these understate the problem because they do not include medical bills charged to credit cards or rolled into home mortgage loans.Bankruptcy filers sixty-five or older had the highest rate of reporting that illness or injury was a reason for filing bankruptcy.[17]

Even insured patients may see their credit ruined through medical-related bankruptcy.[18]The majority of those in medical-related bankruptcy say they have some insurance at the time of filing.[19]Among married joint bankruptcy filers who were insured at the time of their bankruptcy filings, almost 40% reported owing debt to a provider of medical services or supplies.[20]

3. Large hospital debts and collection activities adversely affect patient health

In addition to financial costs, patients suffer health-related costs from hospital bills.[21]The first relates to the health impact of stress.[22]Some researchers are concerned specifically about the negative impact of indebtedness and related financial trouble on certain diseases or conditions.[23]

Owing a significant debt can be stressful on its own. The stress is exacerbated, however, by a zealously pursued debt collection process.While still in a hospital bed, a patient may receive a visit from a hospital representative to discuss payment.[24]Once home, the patient may start to receive letters and phone calls proposing ways of taking care of the bill.The calls will get pressing when the first debt collector takes over,[25] and get even more assertive if the hospital enlists the services of a secondary debt collector.[26] Debt collectors will threaten to report the patient's delinquency to credit bureaus and/or threaten to file a lawsuit.If they follow through on the latter,[27] the litigation process itself can be intimidating.Although liability is determined quickly in many cases, other cases -- and the associated stress and uncertainty -- linger for years after the original hospitalization.[28]

Whether or not the lawsuit results in a court judgment, concerns about the magnitude of the hospital bill may increase if the patient's liability includes court costs, execution costs, and perhaps even the hospital's attorneys' fees. [29]Patients also understandably fear what comes after a court judgment: a judgment entitles a creditor to garnish wages, attach bank accounts, or direct a sheriff to levy on property within limits imposed by state and federal exemption laws.Even if a patient has property of little value, the prospects of loss can be frightening and devastating.[30]

Aside from the health impact of stress, large medical debts can dampen a patient's likelihood of receiving future medical care.Medical providers may refuse to give non-emergency care, or patients indebted for prior care may fear to seek more.[31]This is especially troubling for patients with chronic problems.Debt, therefore, may exacerbate the health care access problems experienced by the uninsured and underinsured.[32]Large hospital debts and related financial distress also make it harder to afford adequate food, safe housing and other basic necessities.[33]

4. Large hospital debts and collection activity directly affect patients' families

The financial and health effects of hospital bills and debt collection are not limited to patients.They apply to their loved ones as well.This is particularly true when hospitals seek to hold family members liable for patients' care.As noted previously, hospitals sometimes do so on the basis of signatures on admission forms.For example, in one case, an eighty-year-old widow was mourning the death of her husband, who had suffered several debilitating illnesses, when the hospital sued her for more than $257,000 for his hospital bills based on her signature.[34]Other times, hospitals seek to hold spouses liable on other grounds, such as the doctrine of necessaries.[35]Even if the spouse is ultimately is not held liable, he or she has been placed through an additional ordeal at a time of great emotional distress.

Various studies have observed the use of third party credit for medical bills.[36] This shifts the burden of collection and risk of non-payment away from the medical provider.Providers understandably find this prospect attractive even though they incur costs associated with processing credit card charges.[37]

Some health care providers and third parties are taking this to the next level: they are joining forces to offer medical-specific credit products to patients.[38]Many of these products do not shift the risk of non-payment entirely away from providers, but the risks and burdens on the whole seem far lower for providers than those associated with the traditional billing and collection process.

These products have received little systematic attention at this point and they raise a host of issues.According to a quote in the American Medical News, the director of the American Medical Association Institute for Ethics worries that these products may result in "further commercialization of the patient-physician relationship," and that cards targeted toward those with poor credit histories "are in essence endorsing the idea that impoverished patients who have the worst credit history should sign up for another credit card, which by the way will pay [medical providers] off first."[39]

For purposes of this hearing, however, it suffices to say that these products do not seem to address the needs of uninsured hospital patients.A $40,000 credit card bill is not much better than a $40,000 hospital bill, and may be worse.Some medical credit products offer interest free installments for limited periods, but the interest rates jump to 20% or higher thereafter. Even at a lower interest rate, the patient may face a perpetual oppressive obligation.[40]To the extent lenders and providers encourage medical-specific home equity products, it is worth noting that undiscounted hospital bills rolled into home mortgage loans raise the stakes further; home equity loans for large medical bills reduce retirement security through the loss of equity, and may lead to home loss altogether.[41]

In addition, one again needs to consider the credit report implications.Credit cards and loans are trade accounts that have a wider range of credit-rating effects than medical debts.Thus, in addition to all of the previously discussed effects of medical debt, the mere existence of a trade account can affect the patient's credit score, particularly if the liability is large or if the patient recently opened other accounts.In addition, the lender is likely to regularly report any lateness in repayment, further affecting the patient's credit rating.Given these risks, medical-specific credit products are not likely to offer the solution to the problems being discussed today.

Thank you again for the opportunity to participate in this important hearing.I would be glad to help the Subcommittee however I can.

[1]See generally Melissa B. Jacoby, The Debtor-Patient; In Search of Non-Debt Alternatives, 69 Brooklyn L. Rev. (forthcoming 2004).Courts routinely characterize patients and providers as debtors and creditors.See, e.g., Trevino v. HHL Financial Services, 945 P.2d 1345, 1348-1349 (Colo. 1997) (describing hospital as patient's creditor, as patient received medical care for which he agreed to pay); Porter v. McPherson, 479 S.E.2d 668, 673, 675 (W. Va. 1996); Bashara v. Baptist Mem. Hosp. Syst., 685 S.W. 2d 307, 310-311 (Tex. 1985) (describing hospital patient relationship as debtor-creditor relationship).

[2] Those tools include informal communications and threats, along with more formal approaches invoking the power of the state, such as filing lawsuits and instructing the sheriff to levy on property.

[3] For a striking study showing low incomes of patients written off as bad debt after failed collection, see Joel S. Weissman, Paul Dryfoos, & Katharine London, Income Levels of Bad-Debt and Free-Care Patients in Massachusetts Hospitals; Does uncompensated care serve the truly needy, 18 Health Affairs 156, 161 (1999).Yet, even uninsured and underinsured families better described as middle class have trouble paying hospital bills.Middle income households already have committed their incomes to important fixed costs such as housing, transportation, and child care, leaving little or no cushion.See Elizabeth Warren and Amelia Warren Tyagi, The Two-Income Trap: Why Middle-Class Mothers & Fathers Are Going Broke (2003).

[4] See, e.g., Melissa B. Jacoby, Collecting Debts from the Ill and Injured; The RhetoricalSignificance, but Practical Irrelevance, of Culpability and Ability to Pay, 51 Am. U. L.Rev. 229, 238 (2001) (overlap in debtors reporting job problems and medical problems in chapter 13 bankruptcy); Melissa B. Jacoby, Teresa A. Sullivan & Elizabeth Warren, Rethinking the Debates Over Health Care Financing: Evidence From the Bankruptcy Courts, 76 N.Y.U. L. Rev. 375, 408 (2001) (overlap in debtors reporting job problems and medical problems).

[5]See, e.g., Ray B. Lefton, Developing Organizational Charity-Care Policies and Procedures, Health Care Financial Management 52, 54-55 (April 2002) (describing hospital policies that permit collection attempts to proceed against charity care accounts); Health Care Financial Management Association, Principles and Practices Board Statement Number 15, Valuation and Financial Statement Presentation of Charity Service and Bad Debts By Institutional Healthcare Providers, available at www.hfma.org/resource/P_and_P_board/Statement_15.htm(last accessed June 1, 2004) (describing debt collection activity as part of "information gathering process" to determine charity care eligibility).

[6] See, e.g., Universal Health Care Action Network of Ohio, A Well Kept-Secret: The Challenge of Finding Out About Hospital Free Care in Cleveland Ohio (Oct. 2003).They also may have been eligible but not enrolled in other programs that would have covered part or all of the costs of their care. See generally General Accounting Office, Means Tested Programs: Determining Financial Eligibility is Cumbersome and Can Be Simplified, GAO-02-58 (November 2001); Barents Group LLC, Final Report On "Review of the Literature On Evaluations of Outreach for Public Health Insurance and Selected Other Programs" (Mar. 31, 2002), available at www.cms.hhs.gov/schip/outreach/rpt33100.pdf; Jennifer P. Stuber, Kathleen A. Maloy, Sara Rosenbaum & Karen C. Jones, Beyond Stigma: What Barriers Actually Affect the Decisions of Low-Income Families to Enroll in Medicaid? (The George Washington University Medical Center, Issue Brief, July 2000); Dahlia K. Remler, Jason E. Rachlin & Sherry A. Glied, What Can the Take-Up of Other Programs Teach Us About How To Improve Take-Up of Health Insurance Programs? (National Bureau of Economic Research, Working Paper No. 8185, Mar. 2001); Michael J. Perry, Evan Stark & R. Burciaga Valdez, The Henry J. Kaiser Family Foundation, Barriers To Medi-Cal Enrollment and Ideas for Improving Enrollment: Findings From Eight Focus Groups In California With Parents of Potentially Eligible Children (Sept. 1998), available at www.kff.org/medicaid/1436-index.cfm; Michael Perry, Susan Kannel, R. Burciaga Valdez & Chrstina Chang, The Henry J. Kaiser Family Foundation, Medicaid and Children Overcoming Barriers to Enrollment: Findings from a National Survey (Jan. 2000), available at www.kff.org/medicaid/2174-index.cfm.

[7] Valley Hospital v. Kroll, 2003 WL 23416577 (N.J. Super. 2003) ("terms contained in the form were non-negotiable.The hospital clearly exercised a decisive advantage in bargaining.Prior to any treatment, a patient -- or in this case someone acting on his behalf -- was compelled to sign it.The patient was in no position to reject the proffered agreement, to bargain with the hospital, or, in lieu of agreement, to find another hospital").

[8] For example, a mother rushed her son to the hospital after an accident left him unconscious and bleeding.After the hospital sued her for payment, she explained that "I signed where she told me to sign, so they would give him medical treatment because he needed it because he was bleeding out of his ears, out of his mouth, the bone out of his elbow was sticking out through the skin." Heartland Health Systems v. Chamberlin, 871 S.W.2d 8, 11 (Mo. App. W.D. 1993) (holding patient's mother liable under terms of admission agreement based on her signature).See also Bethesda Hospital v. Kessnick, 174 B.R. 481 (S.D. Ohio 1994) (hospital acknowledging that father signed form during very stressful time upon daughter's admittance to hospital).

[9] But see, e.g., Doe v. HCA Health Services of Tennessee, Inc, 46 S.W.3d 191 (Tenn. 2001) (refusing to enforce hospital debt on basis of agreement due to indefinite price term, but considering value of services for purposes of holding patient liable on quantum meruit/unjust enrichment theory).

[10] Robert B. Avery, PaulS. Calem, Glenn B. Canner & Raphael W. Bostic, An Overview of Consumer Data and Credit Reporting, Federal Reserve Bulletin 47, 60-61 (Feb. 2003) (emphasis added); My FICO (a division of Fair Isaac), www.myfico.com (reporting on credit history components, including judgments and liens).

[11]Robert B. Avery, PaulS. Calem, Glenn B. Canner & Raphael W. Bostic, An Overview of Consumer Data and Credit Reporting, Federal Reserve Bulletin 47, 67, 69 (Feb. 2003).See also Sara R. Collins et. al, The Affordability Crisis in U.S. Healthcare: Findings from the Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund Issue Brief #723 17-19 (March 2004); S. Felt-List, M. McHugh, & E. Howell, Monitoring Local Safety-Net Providers: Do They Have Adequate Capacity? 21 Health Affairs 277 (Sept/Oct. 2002) (reporting on collection agency contacting the uninsured).

[12] Accounts placed for collection, civil suits, and judgments can be reported for seven years for most purposes, but the seven-year period starts and ends at different times for each notation.Fair Credit Reporting Act § 605, 15 U.S.C. § 1681c.Information about failure to pay medical debts will affect credit nothwithstanding the fact that recent amendments to the Fair Credit Reporting Act impose additional conditions on the handling of medical information.

[13] Regularly updated charts on the "My Fico" website show that a borrower can pay several hundred dollars more on a loan each month because of a low credit score.www.myfico.com (last accessed June 4, 2004).

[14] See, e.g., Fair Credit Reporting Act § 604, 15 U.S.C. § 1681b (listing permissible purposes of furnishing consumer report, including employment purposes, and specifying conditions); id at § 1681k (procedures relating to reporting of public record information for employment-related inquiries).

[15] See Melissa B. Jacoby, Teresa A. Sullivan, & Elizabeth Warren, Rethinking the Debates Over Health Care Financing: Evidence From the Bankruptcy Courts, 76 N.Y.U. L. Rev. 375 (2001) (46.2% medical-related filings); Bruce Jancin, Medical Bills Cited in 55% of U.S. Bankruptcy Cases, Skin and Allergy News (Aug 2003).

[16]See, e.g., Hugh F. Daly III, Leslie M. Oblak, Robert W. Seifert & Kimberly Shellenberger, Into the Red To Stay in the Pink: The Hidden Cost of Being Uninsured, 12 Health Matrix 39, 56 (2002) (47% with medical debt among Legal Aid Society of Greater Cincinnati clients who sought assistance with bankruptcy filings in 2000-2001); Ed Flynn & Gordon Bermant, The Class of 2000, Am. Bankr. Inst. J., Oct. 2001 (56.2% of chapter 7 no-asset bankruptcy filers with medical debt on bankruptcy schedules); Melissa B. Jacoby, Teresa A. Sullivan & Elizabeth Warren, Rethinking the Debates Over Health Care Financing: Evidence From the Bankruptcy Courts, 76 N.Y.U. L. Rev. 375, 387 (2001) (31.2% reported owing money to "health care providers, services, supplies" at time of filing bankruptcy); Champaign County Health Care Consumers Medical Billing Task Force, How Medical Debt Affects Champaign County Consumers; A Community Report on Medical Debt-Related Bankruptcies and Small Claims Lawsuits (July 11, 2002) (58% of cases in Central District of Illinois in December 2001 involved debts owed to medical providers).For a less recent study finding a high incidence of medical debt, see Susan D. Kovac, Judgment-Proof Debtors in Bankruptcy, 65 Am. Bankr. L. J. 675 (1991) (80% of judgment proof chapter 7 debtors in Tennessee district had medical debt, with mean amount of over $7,800 in mid-1980s).In a recent study, one couple owed $200,000 of medical bills not covered by insurance, while another debtor accrued $20,000 debt a year for care of her husband who had been in a coma for five years.See Melissa B. Jacoby, Collecting Debts from the Ill and Injured; The RhetoricalSignificance, but Practical Irrelevance, of Culpability and Ability to Pay, 51 Am. U. L.Rev. 229, 248-249 (2001).

[17] See Melissa B. Jacoby, Teresa A. Sullivan, & Elizabeth Warren, Rethinking the Debates Over Health Care Financing: Evidence From the Bankruptcy Courts, 76 N.Y.U. L. Rev. 375, 397-398 (2001).

[18] See, e.g., Fair Credit Reporting Act, § 605, 15 U.S.C. § 1681c (permitting bankruptcy cases to be listed for ten years "from the date of the entry of the order for relief or the date of adjudication).

[19] See Melissa B. Jacoby, Teresa A. Sullivan, & Elizabeth Warren, Rethinking the Debates over Health Care Financing: Evidence from theBankruptcy Courts, 76 N.Y.U. L. Rev. 375, 399-400 (2001).Whether they experienced gaps in insurance, however, is an important question that warrants further study.See generally Congressional Budget Office, How Many People Lack Health Insurance and For How Long? (May 2003) (nearly 60 million people were uninsured at any point within 1998); Hearing on the Uninsured, Committee on Ways and MeansSubcommittee on Health (March 9, 2004) (statement of Douglas Holtz-Eakin, Director of the Congressional Budget Office, figure 1).

[20] See Melissa B. Jacoby, The Debtor-Patient; In Search of Non-Debt Alternatives, 69 Brooklyn L. Rev. table 1 (forthcoming 2004).

[21] See generally Melissa B. Jacoby, Does Indebtedness Influence Health? A Preliminary Inquiry, 30 J. L. Med. & Ethics 560 (2002).

[22] See generally M. Katz, Stress, Control, and Psychological Interventions, in Stress and Health Among the Elderly (M.L. Kykle et. al, eds., 1992); W.R. Lovallo, Stress and Health; Biological and Psychological Interactions (1997); A. O'Leary et. al, Stress and Immune Function, in Clinical Disorders and Stressful Life Events (T.W. Miller ed., 1997); Steven C. Ames, Glenn N. Jones, & Phillip J. Brantley, A Prospective Study of the Impact of Stress on Quality of Life: An Investigation of Low-Income Individuals with Hypertension, 23 Ann. Behav. Med. 112 (2001); P.A. Barnett, J.D. Spence, & J.R. Jennings, Psychological Stress and the Progression of Carotid Artery Disease, 15 J. Hypertens. 49 (1997).

[23] See, e.g., Patricia Drentea and Paul J. Lavrakas, Over the Limit: The Association Among Health, Race and Debt, 50 Social Science and Med. 517 (2000); Simon Hatcher, Debt and Deliberate Self Poisoning, 164 British J. Psychiatry 111 (1994); Richard Reading & Shirley Reynolds, Debt, Social Disadvantage and Maternal Depression, 53 Social Science & Med. 441 (2001); Steven Hope, Chris Power, & Bryan Rodgers, Does Financial Hardship Account for Elevated Psychological Distress in Lone Mothers?, 49 Social Science & Med. 1637 (1999); G.W. Brown & P.M. Moran, Single Mothers, Poverty and Depression, 27 Psychological Med. 21 (1997); Robert J. Havlik, Allexander P. Vukasin, & Stephan Ariyan, The Impact of Stress on the Clinical Presentation of Melanoma, 90 Plastic and Reconstructive Surgery 57 (1992); Hilary Graham & Clare Blackburn, The Socio-Economic Patterning of Health and Smoking Behavior Among Mothers With Young Children on Income Support, 20 Sociology of Health & Illness 215 (1998); H.G. Morgan et. al, Deliberate Self-Harm: Clinical and Socio-economic characteristics of 368 Patients, 127 British J. Psychiatry 564 (1975); J.H.J Bankroft et al, The Reasons People Give for Taking Overdoses, 128 British J. Psychiatry 538 (1968).See also Gillian Parker, Getting and Spending: Credit and Debt in Britain (1990); David Caplovitz, Consumers in Trouble: A Study of Debtors in Default (1974); M. Ryan, Social Work and Debt Problems (1996); E. Kempson et al, Hard Times? How Poor Families Make Ends Meet (1994).

[24] See Rhonda L. Rundle & Paul Davies, Hospitals Start to Seek Payment Upfront, Wall. St. J., June 2, 2004, at D1; Patrick Reilly, Extracting Payment; Hospitals try collecting before patients leave ER, Modern Healthcare, Nov. 17, 2003, at 8.

[25] Healthcare collection is its own segment of the collection industry.See, e.g., ACA International, The Association of Credit and Collection Professionals, Collections Information, available at www.acainternational.org(last updated 2/16/04); ACA International, The Association of Credit and Collection Professionals, Healthcare Collections (last updated 3/1/04).Hospitals mostly pay their collectors on contingency. See id.; Tom Jajny, The What, Why and When of Collecting Patient Balances, Medical Practice Management, July/Aug/ 2003, at 33. Debt collectors of course are expected to act within the limits permitted by the Fair Debt Collection Practices Act and related laws.See, e.g., Federal Trade Commission Bureau of Consumer Protection Opinion Letter to J. Russell Gibson, III (February 21, 1990) available at www.ftc.gov/os/statutes/fdcpa/letters/gibson90.htm(opinion letter on whether "day1" "pre-collection" services for hospitalfall within FDCPA); Federal Trade Commission Bureau of Consumer Protection Opinion Letter to Thomas Isgrigg (November 10, 1992) available at www.ftc.gov/os/statutes/fdcpa/letters/isgrigg1.htm (opinion letter on whether activities of agency with respect to delinquent medical accounts fall within FDCPA).

[26] Robert M. Frohlich, Effective reassignment of accounts can decrease bad debt, Healthcare Financial Management 36, 37 (1994) (describing use of subsequent collection agency placements, lawsuits, and credit bureau reporting).

[27] See, e.g., Champaign County Health Care Consumers Medical Billing Task Force, How Medical Debt Affects Champaign County Consumers; A Community Report on Medical Debt-Related Bankruptcies and Small Claims Lawsuits (July 11, 2002) (in study of small claims court records, finding 20% of plaintiffs were not-for-profit health providers).

[28] See, e.g., County of Santa Clara v. Vargas, 139 Cal. Rptr. 537 (Cal. App. 1977) (medical care given in 1969, payments made until 1974, and this case report published in 1977); Mercy Hospital, Inc. v. Carr, 297 So.2d 598 (Fla. App. 1974) (published appeal in 1974 for debt incurred in 1968); Orthopedic & Reconstructive Surgery, S.C. v. Kezelis, 496 N.E.2d 1112 (Ill. App.1986) (reported decision in 1986 for dispute over medical bill for services in 1978).

[29] See, e.g., Sholkoff v. Boca Raton Community Hospital, Inc., 693 So.2d 1114 (Fla. App. 1997) (interpreting and upholding patient authorization agreement imposing collection costs, attorneys' fees, and interest at the "highest rate permitted by law" if patient does not pay in full within 45 days).See generally William J. Woodward Jr., Enforcements of Money Judgments: Objectives and Restrictions, in9 Debtor-Creditor Law 37-24 (Theodore Eisenberg, ed. 1990) (discussing allocation of costs).

[30] Even among the lowest income quintile, 40.6% of families owned houses and 56.8% owned cars according to the 2001 Survey of Consumer Finance. Arthur B. Kennickell et. al, Recent Changes in U.S. Family Finances: Evidence from the 1998 and 2001 Survey of Consumer Finance, Federal Reserve Bulletin 1, 19 (Jan. 2003).

[31] D. Andrulus et. al, Paying for Health Care When You're Uninsured: How Much Support Does the Safety Net Offer?, The Access Project (Jan. 2003); Bruce Jancin, Medical Bills Cited in 55% of U.S. Bankruptcy Cases, Skin and Allergy News (Aug 2003); Elizabeth Warren & Amelia Warren Tyagi, The Two-Income Trap; Why Middle-Class Mothers and Fathers Are GoingBroke (2003); D. Gurewich, R. Seifert, & J. Prottas, The Consequences of Medical Debt: Evidence from Three Communities, The Access Project (Feb. 2003); Carol Pryor & Deborah Gurewich, Getting Care But Paying the Price; How Medical Debt Leaves Many in Massachusetts Facing Tough Choices, The Access Project (Feb. 2004).

[32] See, e.g., U.S. Census Bureau, Supplemental Measures of Material Well-Being: Expenditures, Consumption, and Poverty 1998 and 2001, P23-201, 10 (Sept. 2003) (reporting on percentage of families who needed to visit doctor or hospital but did not go); John Z. Ayanian et. al, Unmet Health Needs of Uninsured Adults in the United States, 284 J. Am. Med. Ass'n 2061 (2000) (nearly 2/5 of long term uninsured adults and 1/3 of short term uninsured adults reported not being able to see physician when needed in the past year due to cost).

[33] See generally Sara R. Collins et. al, The Affordability Crisis in U.S. Healthcare: Findings from the Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund Issue Brief #723 (March 2004); Carol Pryor & Deborah Gurewich, Getting Care But Paying the Price; How Medical Debt Leaves Many in Massachusetts Facing Tough Choices, The Access Project (Feb. 2004).See also U.S. Census Bureau, Supplemental Measures of Material Well-Being: Expenditures, Consumption, and Poverty 1998 and 2001, P23-201 (Sept. 2003) (reporting on households living with inadequate food, in homes with leaky roofs, and in neighborhoods with abandoned buildings, smoke or fumes, and where they are afraid to walk at night).

[34] See Valley Hospital v. Kroll, 2003 WL 23416577 (N.J. Super. April 17, 2003).Medicare and Medigap had paid the hospital hundreds of thousands of dollars, but the hospital argued it could balance bill the patient's widow for its full charge once Medicare Part A benefits had been exhausted. Nearly three years later, the court granted partial summary judgment in favor of the patient's widow on the balance billing issue.

[35]According to courts and commentators, hospitals have been the principal users of the doctrine of necessaries, leading to the conclusion that this doctrine is more of a hospital debt collection device than a spousal support device.See Medical Center Hospital of Vermont v. Lorrain, 675 A.2d 1326, 1329 (Vt 1996) ("virtually all necessaries cases are hospitals seeking payment, often due to last illness"); Shawn M. Willson, Comment, Abrogating the Doctrine of Necessaries in Florida: The Future of Spousal Liaiblity for Necessary Expenses After Connor v. Southwest Florida Regional Medical Center, Inc., 24 Fla. St. U. L. Rev. 1031, 1043 (1997) ("In the last fifty years, all of the Florida cases in which a party invoked the doctrine involved unpaid medical expenses.In case after case, hospitals sought to trap an unwilling spouse into making payment on a debt for which he or she did not contract").However, some state courts abolished the doctrine of necessaries on constitutional grounds, leaving to the legislatures whether to enact a gender-neutral statute.See, e.g., North Ottawa Community Hospital v. Kieft, 578 N.W.2d 267, 273 (Mich. 1998) (holding doctrine of necessaries no longer is part of Michigan's common law, and thus "neither husband nor a wife is liable, absent express agreement, for necessaries supplied to the other").

[36] See, e.g., Sara R. Collins et. al, The Affordability Crisis in U.S. Healthcare: Findings from the Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund Issue Brief #723 (March 2004) (among those with medical debt, approximately one fifth ran up credit card debt or incurred debt secured by home); Glenn B. Canner et. al., Recent Developments In Home Equity Lending, 84 Federal Reserve Bulletin 241, 248 tbl.8 (1998) (increase in borrowers indicating medical expenses as use for home equity lines of credit and loans); Peter J. Brady et. al, The Effects of Recent Mortgage Refinancing, Federal Reserve Bulletin 441, 446 (July 2000) (39% of 1998 and early 1999 refinancings used for consumer expenditures, which includes medical expenses among a list of other things).This is not an entirely new phenomenon, however.Even a study in the 1970s found medical costs a major reason for consumers taking out personal loans.Thomas A. Durkin & Gregory E. Eliehausen, 1977 Consumer Credit Survey, 80, table 15.1 (Washington DC Federal Reserve Board, 1978).

[37] See, e.g., Julie A. Jacob, Credit to your practice: Letting patients pay with plastic, American Medical News, July 29, 2002.

[38] See, e.g., Tyler Chin, In the cards: Getting Paid with Plastic; Innovations in the credit and debit card industry are giving physicians new options for collecting bills, American Medical News, Jan. 12, 2004; Mike Stobbe, Credit card agency cuts hospitals' losses, The Charlotte Observer, July 11, 2003; www.accessonemedcard.com; Michael Unger, Just What the Doctor Ordered; Schein's One-Stop Service Ranges from Equipment to Personal Finance, Newsday, Dec. 30, 1996, at C7 (discussing MedCash credit cards, with interest rates eventually rising to 19%); News Release, PracticeXpert Launches Pxpert Medical Credit Card Program (Sept. 4, 2003) (acquiring delinquent accounts from physician and transferring balance to credit card, which can be used for other purchases as patient re-pays); News Release, King Thomason Group Enters into Agreement With Medical Capital Corporation to Market KTG's TotalCare Medical Accounts Receivable Credit Card Program (April 23,2004); www.kgth.com/main/totalrecovery.htm (citing 95% approval rate for private pay patients); Citibank Health Card Program, www.citibank.com/us/cards/cardserv/healthcrd/cons_benefits.htm (card for family health needs, offering 3 month interest free period with rate of nearly 22% thereafter, and default interest rate of over 25%); HELPCard, www.helpcard.com(interest rate of prime plus 11.9%); www.healthEZ.com (encouraging employers to offer to employees as supplement to health plans); DeeDee DePass, How HealthEZ Got Fit, Star Tribune, www.carecredit.com.

[39] Tyler Chin, In the cards: Getting Paid with Plastic; Innovations in the credit and debit card industry are giving physicians new options for collecting bills, American Medical News, Jan. 12, 2004.

[40] This essentially was the problem experienced by Quinton White with respect to his hospital bill payment plan.See Lucette Lagnado, Twenty Years and Still Paying; Jeanette White is Long Dead But Her Hospital Bill Lives On; Interest Charges, Legal Fees, Wall St. J., March 13, 2003, at B1; Lucette Lagnado, Twenty Years - and He Isn't Paying Any More, Wall St. J., April 1, 2003, at B1.

[41] See, e.g., Federal Trade Commission, Facts for Consumers, Need a Loan? Think Twice About Using Your Home as Collateral, available at www.ftc.gov/bcp/conline/pubs/hoepa.htm (last accessed June 4, 2004).

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