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Gary Langer is director of polling at ABC News, where he's covered the beat of public opinion for nearly 20 years - conducting and analyzing ABC News polls, evaluating data from other sources and setting the news division's standards for poll reporting. Langer has won two Emmy awards for ABC's reporting of public opinion polls in Iraq, and The Numbers blog was honored this year as winner of the 2008 Iowa Gallup Award for Excellent Journalism Using Polls.
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Medical Bankruptcies: A Data-Check
March 05, 2009 12:37 PM
(3 p.m. update: See italicized items with responses from the lead author of the Harvard study, Dr. David Himmelstein.)
President Obama’s kicking off his health care reform today in the worst possible way: with a mischaracterization of data.
“The cost of health care now causes a bankruptcy in America every thirty seconds," Obama said at the opening of his White House forum on health care reform. The problem: That claim, based on a 2001 survey, is simply unsupportable.
The figure comes from a 2005 Harvard University study saying that 54 percent of bankruptcies in 2001 were caused by health expenses. We reviewed it internally and knocked it down at the time; an academic reviewer did the same in 2006. Recalculating Harvard’s own data, he came up with a far lower figure – 17 percent.
A more recent study by another group, approaching it another way, indicates that in 2007 about eight-tenths of one percent of Americans lived in families that filed for bankruptcy as a result of medical costs. That rings a little less loudly than “one every 30 seconds.”
The extrapolation of Harvard’s data to “a bankruptcy every 30 seconds,” which Obama also mentioned in his address to a joint session of Congress last month, comes, per the White House, from a 2005 Washington Post op-ed by Prof. Elizabeth Warren, a co-author of the Harvard paper. Fact-check.org has noted that even using Harvard’s numbers, it’s more like a bankruptcy every minute; indeed if you add up all bankrputcies in a year you barely get one every 30 seconds. (I've e-mailed Warren for comment.) But more to the point is that the Harvard data are clearly inflated, or at best, mischaracterized.
Himmelstein tells me that the reason for the difference is a change in federal law that sharply reduced the number of bankruptcies. In 2005, the year he and Warren wrote their op-ed, there were just over 2 million bankruptcies. Data out just today say that in 2008 there were 1.1 million (up sharply, by the way, over 2007). So this error in the White House claim stems simply from the fact that it's using out-of-date information. The next question is whether the estimate of “medical bankruptcies” is reliable in the first place.
A good part of the problem is definitional. The Harvard report claims to measure the extent to which medical costs are “the cause” of bankruptcies. In reality its survey asked if these costs were “a reason” – potentially one of many – for such bankruptcies.
Beyond those who gave medical costs as “a reason,” the Harvard researchers chose to add in any bankruptcy filers who had at least $1,000 in unreimbursed medical expenses in the previous two years. Given deductibles and copays, that’s a heck of a lot of people.
Moreover, Harvard’s definition of “medical” expenses includes situations that aren’t necessarily medical in common parlance, e.g., a gambling problem, or the death of a family member. If your main wage-earning spouse gets hit by a bus and dies, and you have to file, that’s included as a “medical bankruptcy.”
When I asked the lead author, Dr. David Himmelstein, about his definitions of medical bankruptcy back in 2005, he said, “It’s a judgment call,” and added that any death, for example, “to our mind is a medical event.”
A last problem was sampling: The Harvard researchers surveyed bankruptcy filers in five federal court districts accounting for 14 percent of bankruptcies nationally; projecting this to the other 86 percent is sketchy. Said Himmelstein: “Obviously the extrapolation is rough.”
Of such rough extrapolations are presidential pronouncements made.
Himmelstein today told me that he’s comfortable saying medical costs, as his study defines them, are “a cause” but not “the cause” of bankruptcies. In his view, “It’s accurate to say medical problems cause half of bankruptcies. There may be other conditions as well but medical problems were causal. I wouldn’t be comfortable with it as the ‘only’ cause.”
Worth keeping in mind is the fact that no one (apparently) disagrees about the pain medical expenses can cause to uninsured Americans. Prof. David Dranove of Northwestern University, who wrote the 2006 paper picking apart the Harvard study, noted that he has a new paper in the works showing that uninsured people who have a severe illness lose a substantial portion of their retirement assets.
"There is general agreement: Being uninsured and getting sick in the United States is really a bad thing,” Dranove told me today. “But for academics the validity of the research matters.” In the Harvard paper, he says, "The methods were so poor they gave cover to those who want to dismiss the problems of the uninsured – they can say the only paper out there uses a suspect method."
There’s been a fair amount of academic back-biting about this issue. On one hand Himmelstein, the lead Harvard researcher, is a co-founder of Physicians for a National Health Program, created to promote a government-run single-payer health system. On the other, Dranove took $5,000 from the nation’s health insurance industry for his report, which he says he now regrets for the criticism of his impartiality it’s engendered. Both papers were peer-reviewed.
“It stinks to be uninsured. I don’t want to be quoted saying anything else,” Dranove says. “But there are correct studies, and incorrect studies. For academics, the validity of the research methods matters.”
It should for the rest of us, too.
Himmelstein’s referred me to a 2006 paper in which he replied to Dranove, whom he accuses of “several out and out errors.” Says Himmelstein: “They were paid by the insurance industry to make this critique… They were hired guns out to try and make a point, and used a variety of illegitimate techniques to make that point.”
Science marches on.
(...and a 4 p.m. update: Elizabeth Warren, Himmelstein's co-author, is serving as chair of the Congressional Oversight Panel on TARP. Per spokeswoman Shanan Guinn, she's not currently giving interviews on her previous research.)
March 5, 2009 in Problem Polls | Permalink | User Comments (350)
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Obama is full of spit.
Posted by: Kitty | Mar 5, 2009 1:02:38 PM
Obama likes to rule with fear. I nolonger support him, honeymoon is over and I'm not impressed. Tally me as "against" obama now. Kathy from NY
Posted by: Kathy | Mar 5, 2009 1:06:30 PM
Plenty of presidents and politicians have made these innocuous rhetorical slips. They're easy to do and relatively harmless.
Give Obama a break - this isn't the Drudge Report...
Posted by: matt | Mar 5, 2009 1:08:43 PM
Obama is a fool. Fix the financial crisis first before going on to health care. He was elected for 4 years but he acts like he has only 4 months.
Posted by: Herb | Mar 5, 2009 1:18:13 PM
Let's not forget that health care is expensive -because- of government interference in the industry.
So, of course, it makes sense that we need -more- government interference.
What?
Exactly.
Posted by: lorien1973 | Mar 5, 2009 1:25:23 PM
I belive it is true I know family menbers and friends that have been pushed off the edge by medical bills I am very close myself I may have to sell house to maintain healthcare.I spend 15% of my gross income of medical thats obove,what my insurance paid.I cost of meds alone was is outrages.one of the meds is 1200$ for a 30 day suppy
Posted by: Daniel orr | Mar 5, 2009 1:26:58 PM
Immaterial. Obama haters will love it but, the fact is, we need health care reform stat.
I'm about to be eligible for Medicare -- and I smoke. You want to pay for the bills I'm about to incur? Better get costs down and write some new rules. The baby boomer are about to sink you.
Posted by: Debbieqd | Mar 5, 2009 1:38:32 PM
One thing that has to change is the American diet. When you consume poison expect to get a severe ailment down the road.
Posted by: Huh | Mar 5, 2009 1:40:04 PM
We are witnessing the end of the United States of America. This President is trying to out-Chavez, Chavez! I hope all of you Obamamaniacs are happy with your one Socialist one party government. You wanted change and now we are all getting change we don't need.
Posted by: Robert Weathers | Mar 5, 2009 1:45:20 PM
"
Immaterial. Obama haters will love it but, the fact is, we need health care reform stat.
I'm about to be eligible for Medicare -- and I smoke. You want to pay for the bills I'm about to incur? Better get costs down and write some new rules. The baby boomer are about to sink you.
"
Actually I'd prefer it if you paid for your own medical bills. I don't know you and frankly I wouldn't care enough in person to pay for your healthcare, and the only reason you're getting any assistance from me is because Government demands it at the point of a gun.
Posted by: Dave | Mar 5, 2009 1:48:00 PM
Perhaps someone should take President Obama to taks for being so imprecise. But I think the larger question is why should any medical problem - from illness,to death, be a catalyst for someone to lose their home? Instead of elivating our standard of living, I see people who seem hell bent on dragging everyone down. 'Misery loves company' is not an excuse.
Posted by: Micheal W Smith | Mar 5, 2009 1:49:30 PM
even 17 percent is a travesty of pain and suffering due to this government (the only first world nation with out universal health care) failure to ensure the health and wellbeing of it citizens and contrary to what negative press given for those other countries that have universal health care the real truth is the average citizen of those county’s are severed better as it better to wait a few months for a non critical issue then never in the USA if your lack health insurance plus they have no financial worries from the bills after they get out which is so much better for recovery. And the argument is we cant afford it sure we can we spend 50% more on the limited health care here then Canada does supporting everyone and if we spend our current amount we be the shining example of health care in the world
Posted by: David Hardingham | Mar 5, 2009 1:50:39 PM
It's news that Obama is a liar? For the person who said it was an "innocuous rhetorical slip"; You've got to be kidding. You've got to admit he really is only the same old bs, no CHANGE at all.
Posted by: j | Mar 5, 2009 1:56:06 PM
Well Robert Weathers you now know how I have been feeling for eight long years. I knew we where going to suffer for Bushes years in office and I feared for my country everyday, and I was right. I think I voted for soemone I can trust to at least care about how much it will cost me to bale us out. Bush did not care that I paid a 1/4 of my income for medical coverage nor did he care that I do not smoke am not fat and have never done anything to deserve an old age with no 401K and only medicare to help with my remaining years. You are wrong and I hope I live to see the day you have to eat your words.
Posted by: Bonnie Kimberly | Mar 5, 2009 1:57:47 PM
" But I think the larger question is why should any medical problem - from illness,to death, be a catalyst for someone to lose their home? "
Right, why should anyone have to pay for medical care at all.
Lets get round up all the doctors, nurses, etc.; chain them to their hospitals, and force them to work for us for free.
How dare they work for a decade learning enough to try to turn a profit in medical care; I have a right to their time and effort and they must give it to me at no cost.
Lets enslave farmers too. We all need food; they shouldn't be charging for it.
Any segments of society who you don't think should be enslaved by the Government for the "good of the people" and "fairness"?
Posted by: Gekkobear | Mar 5, 2009 2:02:55 PM
I have been a practicing bankruptcy attorney for a few years in three states, and have clerked for a bankruptcy judge. I can tell you that the claim is impossible. I work on both debtor and creditor cases and of all the cases I have seen or reviewed this year, not one was caused by medical bills. A lot of times medical bills are included as a debt, but it is not the cause. Medical bills are just a debt for my clients, just like credit cards. The usual cause is too much debts, i.e. credit cards, an imploding mortgage, death or divorce. President Obama's charge is highly inflated and a little irresponsible. Yes we need medical reform, but there is no need to lie or exaggerate to accomplish reform.
Posted by: Rob | Mar 5, 2009 2:06:54 PM
REAL CLEAR POLITICS poll.62% say country is on the wrong track
DO NOT REPORT THIS COMRADE ABC
Posted by: bawl knee phwank | Mar 5, 2009 2:07:03 PM
The clarification of the bankruptcy rate is interesting, and helpful for keeping accuracy in this matter. I think many people will be appalled that even with a reevaluation of the Harvard data, so many people are bankrupted by basic healthcare needs.
Additionally, I hope that ABC News will apply this level of scrutiny to the figures and statements of those who will surely be working to oppose healthcare reform. There will be a host of intentional distortions down the line. The debate will be furthered by a vigilant, prominent "truth squad."
Posted by: TruthSeekr | Mar 5, 2009 2:14:02 PM
Bonnie: You want someone who cares? I want someone to actually do something---and not be dishonest in his justification. If he is honest, most of the silly stuff he talks about won't happen.
Also, the government isn't responsible for your bad job choice and investment decisions---just as we shouldn't be bailing out AIG, GM, etc.
Posted by: j | Mar 5, 2009 2:20:12 PM
Truth seeker: "so many people are bankrupted by basic healthcare needs."
About how many. Sounds like dogma trumps data.
Posted by: j | Mar 5, 2009 2:25:08 PM
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