William Hollingworth, PhD, of Harborview Injury Prevention and Research Center at University of Washington, Seattle, identified 6,345 adult residents of western Washington State who were hospitalized with brain or spinal cord injuries from 1991 to 2002. U.S. Bankruptcy Court Records were reviewed to assess how the injury affected the patients' subsequent risk of bankruptcy.
Within five years after brain or spinal cord injury, 3.5 percent of the patients filed for bankruptcy. With adjustment for other factors, the risk of bankruptcy was 33 percent higher after brain or spinal cord injury than in the years before the injury.
Surprisingly, bankruptcy risk was unrelated to the severity of injury. In fact, bankruptcy was somewhat less common for critically injured patients, compared to those with mild injuries. "One potential explanation...is that the financial safety net may be most accessible for patients with the most debilitating injuries," the researchers write.
There was a complex relationship between bankruptcy and insurance status. Absolute bankruptcy rates were twice as high for patients with commercial medical insurance, compared to Medicaid patients. "The high absolute incidence of bankruptcy in commercially-insured patients could be attributable to preinjury wages that allowed them to accumulate mortgages, car loans, and credit card debt," Dr. Hollingworth and colleagues write. "Debts remain postinjury, but the ability to service them recedes due to job loss."
In contrast, Medicaid patients had the highest relative increase in bankruptcy risk—more than double the risk before injury. The researchers suggest that many of these patients were uninsured before their injury and applied for the Medicaid program while in the hospital.
The 3.5 percent rate of bankruptcy after brain or spinal cord injury is "not negligible," Dr. Hollingworth and colleagues conclude. Since the national bankruptcy rate has more than doubled over the past decade, the current risk of bankruptcy after injury may be even higher. "We believe that it is vital that future work examines whether bankruptcy could be prevented through better financial counseling, behavioral therapy, or vocational rehabilitation," the researchers write. Policies to improve disability and medical insurance and to promote reintegration of people with disabilities into the workforce could also help to reduce financial hardships after injury.
"Bankruptcies may be the 'tip of the iceberg' of medical impoverishment, most of which never makes is way into bankruptcy courts," write Drs. Steffie Woodhandler and David U. Himmelstein of Cambridge Hospital/Harvard Medical School in an editorial accompanying the new study. "[The] study is a stark reminder that America's health care safety net is in tatters, failing to protect solidly middle-class families from financial free-fall due to illness."