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The Toxic Cycle of Healthcare Billing in 7 Facts

healthcare vs money

We all know that US healthcare costs are out of control – we spend over $10,000 per person for healthcare each year in the US.

However – the current state of affairs creates a toxic and never-ending cycle that has an enormous effect on a shocking number of Americans.

Below are 7 facts that illustrate just how much of a problem this is.

Fact #1: 45% of Americans Adults are STILL uninsured or underinsured.

From the Commonwealth Fund, 30 million adults in America still don’t have health insurance and 44% are underinsured (underinsured adults are those despite having health insurance still have high out of pocket healthcare costs relative to their income).

The ACA helped to significantly decreased the number of uninsured American adults but actually increased the number of underinsured (many uninsured received health insurance but are still underinsured).

Problems from high deductibles and co-insurance to the rise of ‘fake health insurance’ are driving this incredibly high number of underinsured.

Fact #2: Hospitals charge consumers over 4x their costs

And over 3.5x what insurance companies pay. We talk about this a lot in our Guide to Lowering Your Medical Bills, but it bears repeating. That’s like charging $70k for a brand new Honda Civic!

Even worse, some hospitals charge consumers 10-20x their costs (we see these hospitals all the time).

So – far too many people don’t have adequate insurance coverage (fact #1) and are getting overcharged by hospitals.

Fact #3: Roughly 1 in 4 Americans have problems with medical bills or debt.

According to a survey by the Commonwealth Fund, over 79 Million Americans have problems with medical bills or debt. That’s 1 in every 4 people in the country, which is absolutely staggering.

So far too many people don’t have insurance, hospitals massively overcharge, and then Americans are saddled with enormous debt issues.

By the way, if you’re one of those people (and you’re not alone) – take a look at our Guide to Lowering Your Medical Bills or 7 Steps to Take if Your Medical Bill Goes to Collections.

Fact #4: Hospitals collect less than 1 cent on the dollar on patient bills of over $10,000

Things aren’t any better on the hospital end either. A recent study found that when a hospital bills a patient $10,000 or more, on average they’ll collect less than $100.

So a staggering number of Americans have problems with medical debt, but hospitals aren’t collecting. This leads to our next fact…

Fact #5: 43 Million Americans have overdue medical bills on their credit report 

What happens when a hospital doesn’t collect on a medical bill? It gets sent to collections and gets put on your credit report – as many as 43 million Americans have had this happen to them.

If this is happening to you – check out our blog post on how medical bills affect your credit score to get an understanding of what your risks are.

Fact #6: Over 18 Million American Adults struggle to pay for basic necessities due to their medical bills

It’s not that Americans don’t want to pay their medical bills and have their credit destroyed, it’s often that they’re trying and can’t.

An in-depth survey from the Kaiser Family Foundation shows that over 18 Million Americans struggle to pay for basic necessities, such as heat, rent, and food, due to the high cost of their medical bills.

This bears focusing on. That’s 18 million people in America who wear winter coats and hats in their house instead of paying for heat, skip eating, or risk getting evicted just to try to pay their medical bills.

Fact #7: 40% of Americans Skipped Treatment Because of Healthcare Costs

Finally – if skipping paying for food, housing, or rent isn’t enough, patients will skip needed medical treatments because they can’t afford to pay.

A survey conducted by the University of Chicago and the West Health Institute shows that 40% of Americans have skipped treatment because of healthcare costs


To summarize the toxic cycle – uninsured and underinsured Americans get massively overcharged for their healthcare. Hospitals don’t collect and send patients to collections ruining their credit. In an attempt to fix the situation, patients will skip paying for rent, food, and heat, and then eventually skip needed medical treatment due to the cost – causing even more problems.

Nobody wins in this situation. Hospitals write off millions of dollars in uncompensated care and patients have their credit destroyed, struggle to make ends meet, and end up skipping needed healthcare treatment (which often leads to other complications and even higher healthcare costs).

In fact, the issue of financial distress is becoming so prevalent and common that the medical community has a name for it – Financial Toxicity – and is starting to recognize just how much of a problem this is. 

At Resolve we’re looking to fix this. We’ve started on the patient side – helping those with exorbitant medical bills find relief by ensuring proper insurance coverage, identifying and correcting errors, and negotiating pricing directly with hospitals. If you have a medical bill you’d like advice on, click here to schedule a free consultation with one of our advocates.