Many find difficulty in paying down medical debt

EDITOR'S NOTE: This story has been corrected to clarify payment figures and a timeline associated with the source's hospital stay.

When a hospital chaplain approached her at 2 a.m. under the fluorescent lighting of an emergency room, Michelle Stacy feared the news wouldn't be good.

And it wasn't.

Her teenage son was badly hurt.

In November, just before midnight on his 19th birthday, Steven Stacy had been in a single-car accident near Jackson along with his cousin and two of their friends.

"They wouldn't tell us much," Michelle Stacy said. "They said they were working on him. We just had to sit there and wait. I was trying not to freak out."

As Steven fought for his life on an operating table at Saint Francis Medical Center, the last thing on Stacy's mind was how much it would cost to treat his injuries. She didn't spare a second on how the bills would eventually stack up.

She did what any mother would have: "When it's a life-threatening situation, it doesn't matter how much it costs. Just do it," Stacy said.

But those bills did add up. Her son's injuries were extensive. Paramedics found him lying on the side of the road, gurgling and choking on his own blood. His spleen was pulverized. He was in a coma, suffering from brain bleeds, several back fractures and a broken collarbone. His left lung was collapsed, and his right lung was bruised.

Stacy said charges for her son's two week stay at Saint Francis Medical

Center cost $422,680, according to her insurance statements. He was then

transferred to a St. Louis hospital for six more weeks.

Stacy has no doubt his medical care costs tally well into seven figures. In the world of health care debt, Stacy is far from alone. More than 41 percent of working-age adults have trouble paying their medical debt, according to a 2009 report from Families USA, a national not-for-profit health care advocacy group.

Average credit card debt is 46 percent higher for medically indebted families than those without medical debt, the report said. In fact, almost a third of people surveyed reported that medical debt contributed to their credit card debt.

That happened with the Stacys, too. Steven's condition got worse, not better. In a month's time, Stacy maxed out two credit cards and nearly tapped out a third to pay $700 a week in hotel bills, meals and gas so she could be with him at St. Louis University Hospital.

"We lived on our credit cards," Stacy said. She quit her part-time job. Her husband missed three weeks of work as a flooring installer, which also reduced their income for a time. Steven's first day at the St. Louis hospital cost more than a half-million dollars, including the hospital fees, tests, medications and physician charges.

"You don't even think about it," she said of the costs. "I could not imagine if we did not have health insurance."

That almost wasn't the case. Due to health care reform law changes last year, dependents can now stay on their parents' insurance until age 26. Steven had just been added to his parents' policy.

The Stacy family has already depleted half their savings. Michelle Stacy still has no idea what some aspects of her son's treatment cost. There was the helicopter ride to St. Louis, when his lung collapsed and a nurse kept him alive by squeezing a ventilation bag. He received treatment for a blood clot in his lung, the reason he was being transferred. Steven spent three weeks at St. Louis University Hospital and was then sent to St. John's Mercy Rehabilitation Hospital for another three weeks.

"I'm not working now, so there's less coming in," Stacy said. "We're trying to pay the bills and feed him. He's trying to gain his weight back."

Steven drinks protein shakes that cost $7 for a six-pack, and he drinks several a day. It all adds up, his mother said.

Four months after the accident, Steven is scheduled to finish therapy at Saint Francis today. His cousin, Luke Gilman, 17, was the driver in the accident and still goes to therapy. Gilman's mother, Dawn Gilman, is in a similar situation with medical debt.

A single mom, Gilman uses the time her son Luke is in therapy to sort through medical bills. She carries a bag full of file folders with her; neatly stacked inside are papers for his homeschooling, insurance benefits statements and bills.

'It's overwhelming'

She thumbs through a stack of about 15 bills she hasn't even opened yet. Some days the mailbox is stuffed with them, other days she'll just get one or two.

"It's overwhelming," Gilman said. "It really is."

Both mothers say they don't understand why medical care is so costly.

Gilman said she feels fortunate that her son was transferred to Ranken Jordan Pediatric Hospital in St. Louis for his last 47 days of inpatient treatment. Gilman was told she'd never receive a bill for Luke's time at the charity hospital, and she was provided free housing at a nearby hotel.

As she faces the hundreds of thousands of dollars in medical bills she knows are coming, she's scared.

It hasn't depleted her savings account yet, but she knows it will. She's thought at some point bankruptcy could be an option.

"You try to save for your children's college education and unexpected things that come up, but then something like this happens. First of all, you just don't ever think it's going to happen to you, and then you get that 2 a.m. phone call and it changes your life," she said.

The number of bankruptcies that were related to medical problems increased by 50 percent between 2001 and 2007, according to a 2009 article in The American Journal of Medicine. Nearly two-thirds of bankruptcies filed are now linked to medical reasons.

"This is affecting the middle class in ways they haven't been affected before," said Thomas McAuliffe, policy analyst with the Missouri Foundation for Health. "More and more middle-class families are applying for public aid, food stamps and Head Start."

Both Stacy and Gilman were told by hospital social workers to apply for assistance from Medicare, Medicaid and Social Security disability for their boys, but they were initially denied.

"The middle class is unduly affected by medical debt because of bad insurance," McAuliffe said. "They are what is considered underinsured. As insurance costs have gone up, and the cost of care has gone up, a lot of people now have high deductible plans, up to $10,000."

Local hospitals say there are a number of factors driving up health care costs, including technology, drug research and increasing numbers of patients with chronic diseases.

Medicare and Medicaid reimbursements don't cover the hospital's full cost to provide care, meaning those costs get shifted to other patients with private insurance, who end up paying more.

"The health care reform law promises to reduce those dollars even further," Tony Balsano, vice president of financial services at Saint Francis, said about reimbursement dollars. Medicare and Medicaid patients account for 60 percent of the hospital's business.

"Charity care continues to grow, and many public payers do not cover the full costs. The combination of all these factors results in increased costs to the health care consumer," Balsano said.

Millions in bad debt

Both SoutheastHEALTH and Saint Francis each turned over more than $30 million in bad debt to collection agencies last year. At the same time, Saint Francis provided nearly $9.6 million in charity care in 2010, and Southeast provided $8.6 million.

Hospitals define bad debt as services they expected payment for but didn't receive. Charity care is defined as services hospitals neither received nor expected payment for because of the patient's inability to pay.

"Most hospitals will negotiate discounts and payment terms with patients who are willing to make the effort to pay their bills," said Hugh King, vice president and chief operating officer at SoutheastHEALTH.

For those who are struggling to pay their medical bills, Balsano said it is important for people to talk to their provider about their options.

"Do not just give up and stop paying. There are options available," he said.

Friends of Luke Gilman and Steven Stacy organized a benefit dance Feb. 12 at the Knights of Columbus hall in Jackson to raise money to help with the boys' medical bills. It raised $3,700, which will be split between the two families, said organizer Amy Copen.

Luke Gilman sat eating breakfast in his mom's kitchen that morning while she opened a new stack of medical bills that had just arrived.

"What are we going to use the money from the benefit for?" he asked her.

She handed him a bill she'd just opened for a back brace he no longer wears. The total cost was $2,075; after insurance, she owed $1,100.

"We'll start with this," she said.

mmiller@semissourian.com

388-3646

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