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Anand Habib, MD, knows all too well how medical debt can accrue. When he was an internal medicine resident at UCSF, Habib commuted by bicycle on San Francisco’s hilly streets — until the day he crashed on his way home from work. After an ambulance ride and some x-rays, Habib thought his biggest injury was to his ego.

Then he started getting the bills.

Habib was balance billed for his emergency care (now outlawed under the No Surprises Act), leaving him with more than $1000 in debt. Bills from the city for his ambulance ride began piling up. His response was simple, if not effective: He stopped opening his mail.

“I didn’t know what to do. So I just didn’t respond. I was hoping things would just kind of sort themselves out,” he said.

Habib eventually challenged the debts and was able to reduce them to an amount he could pay, but the experience has shaped the way he talks to patients about the costs of their care.

“I started to pay attention to what the individuals who I was caring for were telling me,” Anand said. “But sometimes the financial damage is not apparent until after they receive care, or they’re at home.”

A Medical Debt Ecosystem

Earlier this year, researchers at Stanford and George Washington University released a report showing that hospitals in Virginia have sued patients for a total of $1.4 billion in debt over the past 15 years.

The report highlighted multiple factors in the medical debt ecosystem, from aggressive debt collection efforts by hospitals and medical practices to the law firms profiting from legal action, said study co-author Ilaria Santangelo at Patient Rights Advocate, a nonprofit organization advocating for price transparency in healthcare.

“Patients are handed the bill afterwards, after going to the hospital for the care that they needed without ever having been told what anything’s going to cost them up front,” Santangelo said. “We spend the most on healthcare but have worse health outcomes than any other developed nation, and that’s a problem.”

Physicians often feel moral harm when faced with their patients’ inability to pay for care, said Laila A. Gharzai, a radiation oncologist at Northwestern University Feinberg School of Medicine in Chicago, who also studies financial impacts of medical care on patients. Doctors want to find lower-cost alternatives and shield those seeking care from financial toxicity and other problems, she said.

Both patients and doctors face a system so deliberately opaque that it’s often impossible to know what someone must pay for a simple procedure.

The amount of medical debt in the US has skyrocketed over the past quarter century, according to a 2023 study.

As many as 4 in 10 American adults carry some form of medical debt, and 25% report having a medical bill they cannot afford, according to Undue Medical Debt, a national nonprofit organization that works to eliminate medical debt. Hospitals and medical systems have filed tens of thousands of lawsuits and wage garnishments, according to a 2022 study. The social burden of medical debt also has ripple effects on medical practice.

For Most Physicians, No Control Over Patient Costs

“Reports like [these] are really important because I don’t think we know this is happening. So unless you actually get these types of reports that measure and show us how bad it is, we’re never going to know,” she said. “It’s really important to measure the problem so we can start to address it.”

It’s an uphill battle because of the opaque pricing embedded in the healthcare system. With over three quarters of doctors now employed by hospitals, healthcare systems, and other corporate entities rather than running an independent practice, clinicians often have little or no say in the prices of the services they provide.

“It really is about engaging patients in a more honest way around those cost-of-care conversations at the get-go and acknowledging that no one can really afford the system that we have,” said Eva Stahl, vice president of policy, engagement and research at Undue Medical Debt.

What’s more, these prices can vary widely from person to person based on their insurer and facility location.

In the report she co-authored, Santangelo found that in one hospital system, the cost of common procedures such as appendectomies, spinal fusion surgeries, knee replacements, and C-sections could vary by 77 times — even within the same healthcare system. Making the system even more challenging to navigate is that hospitals often require patients to take full financial responsibility for their care long before they know what it’s going to cost.

“What could be more predatory than this? Hospitals need to start getting called out for this,” Santangelo said. “It’s setting patients up to fail.”

All of this helps build a system in which medical debt is increasingly common. In their review of 15 years of Virginia circuit court records, Santangelo and colleagues found that healthcare systems and medical practices across the state had filed 1.15 million lawsuits to collect on over a billion dollars’ worth of medical debt between 2010 and 2024. The majority of these suits (52%) were filed by nonprofit hospitals. Many sued patients also found themselves on the hook for part of the plaintiff’s attorney fees and court costs, totaling $134 million in additional fees.

In an emailed statement, Julian Walker, vice president of communications at the Virginia Hospital & Healthcare Association in Glen Allen, Virginia, said, “Virginia hospitals have a well-documented record of making significant investments in expanding access to care and providing free and discounted care to low-income individuals across the Commonwealth. Each year, Virginia hospitals incur hundreds of millions in bad debt from unpaid medical bills. To address barriers to accessing care, including among patients who are uninsured or underinsured, Virginia hospitals have worked with elected leaders in recent years to successfully enact consumer-friendly health policy reforms that enable patients to receive good faith price estimates from hospitals, protect patients from surprise medical bills, promote healthcare and insurance price transparency, and [limit] aggressive medical debt collection.”

From his office in the Hudson Valley, pediatric cardiologist Eric Fethke isn’t surprised at the report.

“Patients are coming in more and more anxious, and more and more stressed, which is not helping any of their healthcare issues. It’s kind of a vicious spiral in terms of health and economics,” Fethke said.

A board member at Doctors for America, Fethke said that as a physician, his patients’ medical debt affects him. It can be hard to recommend care when it knows it has the potential to bankrupt families, he said. This kind of moral injury can be hard to cope with day after day, especially given that individual doctors often have little recourse to alter the big business of healthcare. Which is why Fethke has begun lobbying for more systemic changes so that his patients won’t have to sacrifice their financial wealth for physical health.

“We need to raise awareness that medical debt is a public health issue, and it’s one that’s at a crisis level and very unique to the American health system,” Fethke said. “And the people who are least able to carry the burden are the ones carrying most of it.”

Gharzai said that physicians can help by learning more about the ins and outs of their own hospital billing practices so that they can do a better job of shepherding their patients through the labyrinthine process. She also said that doctors’ offices need to do a better job of asking patients up front about their debt concerns and helping steer them toward financial assistance programs.

“I would be surprised if most physicians have no idea how to navigate the healthcare system for themselves, let alone help shepherd a patient through it,” Gharzai said. “But patients really just want us to ask.”

The experts cited in this article had no relevant disclosures.