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Hospital lawsuits unearth "cracks in our system"

Data: Peterson-Kaiser Health System Tracker; Chart: Axios Visuals

Low-income patients often face steeper out-of-pocket health care costs — and that means they're also more likely to be sued by hospitals when they can't pay their bills.

Driving the news: The New York Times yesterday reported on Carlsbad Medical Center's prolific use of lawsuits to collect its patients' medical debts, which often leads to wage garnishment or property liens.

  • The hospital is the only one in town and has filed nearly 3,000 lawsuits against patients since 2015, NYT found.
  • Its practices were first profiled in an upcoming book by Marty Makary, a doctor at Johns Hopkins, titled "The Price We Pay."
  • "The health insurance deductibles so often discussed in our health policy circles may seem inconsequential to wealthy people and to decision makers in the policy world, but they are crushing many Americans," Makary writes.

Not only are patients facing more out-of-pocket spending than ever before, but hospitals — including Carlsbad Medical Center — often greatly inflate their prices compared to Medicare rates.

  • Some of the hospitals suing patients — like Memphis' Methodist Le Bonheur Healthcare — are nonprofits.
  • "Hospitals want to get all the perks of their nonprofit status…but really rake patients through the coals with their billing practices," Yale's Zack Cooper told me.

The bottom line: "There's a space for folks who are vulnerable to get caught in the cracks of our system ... [such as] higher cost sharing and out-of-pocket costs, skimpier health insurance plans, and more aggressive collection practices by hospitals and providers," Cooper said.

Go deeper: The only health care prices that matter to consumers