Los Angeles County Really Erase Medical Debt? Here’s What’s Happening

Los Angeles County has embarked on an ambitious plan to confront the $2.9 billion medical debt crisis plaguing its residents. In a pioneering move, the nation’s most populous county is targeting hospitals and their billing practices as a major driver of this widespread public health issue. In this article we talk about Los Angeles County Really Erase Medical Debt.

According to USA TODAY, For over a year, LA County’s Department of Public Health has been developing a comprehensive strategy to track patient debt and hospital collections, boost medical bill forgiveness for low-income patients, and directly purchase and eliminate billions in outstanding medical debt.

A Public Health Crisis, Not Just a Financial One

What sets LA County’s approach apart is its framing of medical debt as a urgent public health threat on par with conditions like asthma and diabetes, rather than merely an economic or political problem.

“Nobody in LA County facing economic limitations should have that impact their ability to access essential healthcare services and support for optimal well-being,” said Barbara Ferrer, director of the public health department, at a recent medical debt symposium.

Mona Shah of the national health equity organization Community Catalyst praised the county’s “bold” efforts to address both immediate debt relief and the root causes of medical debt. She highlighted the significance of tackling this issue in a region with around 10 million residents.

Pushback from Hospital Industry

However, on the eve of the April 10th symposium, the powerful Hospital Association of Southern California urged LA County to revise its plan. In a letter, the association’s CEO George Greene argued the proposed debt relief program would “only burden hospitals with unnecessary requirements, without ultimately helping to address the underlying issue.”

Many of the county’s recommendations would require hospitals to change billing and reporting processes. For example, LA County wants hospitals to notify it when sending patient debt to collections and improve access to financial assistance programs, which patient advocates say are often difficult to navigate despite state requirements.

The association’s LA County VP Adena Tessler told KFF Health News that hospitals already provide ample financial aid, claiming the county places too much emphasis on hospitals when other healthcare sectors like insurers share blame for the medical debt crisis.

A Widespread and Inequitable Burden

But the scale of the problem in LA County is staggering. Analysis by the public health department found nearly 785,000 county residents were burdened with $2.9 billion in total medical debt in 2022 alone.

The data shows this debt disproportionately affects people of color, low-income families, and households with children. Having outstanding medical bills more than doubled the likelihood of delaying care, struggling to afford housing, or going hungry.

While a few states have begun limiting medical debt collection or mandating hospital financial assistance, LA County’s public health-centered approach is unprecedented. Some jurisdictions have provided direct debt relief, and new state and federal laws ban including medical debt on credit reports, which can cripple someone’s ability to find housing, jobs, and loans.

“Medical debt is a huge public health problem,” said Naman Shah, the LA public health department’s medical and dental affairs director. “We try to shift societal determinants that deeply and widely impact health. Medical debt fulfills both – it’s important we see this as a health issue, not just a regulatory one.”

A Phased, Collaborative Approach

With backing from the County Board of Supervisors, which labeled medical debt a “pervasive” cause of harm to marginalized communities, the public health department developed a phased plan after releasing initial recommendations last year.

Over the next several months, LA County will score hospitals on the accessibility of their financial assistance and provide templates to simplify byzantine billing practices, similar to efforts in Washington, Oregon and Maryland.

The county also aims to prevent future medical debt through consumer education on avoiding surprise billing and out-of-network charges in collaboration with health plans and providers.

While agreeing hospitals should not be the sole focus, Naman Shah defended starting with a major debt source, noting nearly 75% of adults owe some medical debt to hospitals.

“We want to get the most bang for our buck,” Shah said. “The largest bill a patient receives is not a dental or office bill – it’s a hospital bill.”

Despite the hospital lobby’s resistance, Shah said the county is moving forward with its plan after addressing some “misunderstandings” through ongoing dialogue with the association.

A National Model for Justice

By asserting that medical debt is first and foremost a critical public health equity issue, Los Angeles County is charting new territory in the nationwide struggle against a burden impacting two out of every five U.S. adults.

Through strategic debt relief, systematic reforms to make hospital billing more consumer-friendly, and preventative efforts across the healthcare system, LA’s sweeping initiative could become a model for other states and localities aiming to proactively tackle an injustice that perpetuates poverty and barriers to care.

As Barbara Ferrer powerfully stated, optimal health and wellbeing should be possible for all LA County residents regardless of economic status. By confronting the medical debt crisis as a public health imperative, this diversity-rich region is taking major strides toward that ideal. I sincerely hope you find this “Los Angeles County Really Erase Medical Debt? Here’s What’s Happening” article helpful.