Zywicki in Washington Times: Congress Binging on Junk Social Science

The notion that half of bankruptcies are driven by medical debt is unsupported and insupportable, according to Professor Todd Zywicki, whose commentary in the Washington Times took issue with testimony recently presented on Capitol Hill. Zywicki, writing with Professor Gail Heriot of the University of San Diego Law School, states that in a small number of cases, medical debt combines with other forms of voluntary consumer debt to contribute to bankruptcy filing. He cites a study by the Executive Office of the United States Trustee that is in direct contradiction to testimony presented to Congress on the matter of medical bankruptcies.

Junk social science index, Washington Times, July 26, 2007. By Todd J. Zywicki and Gail Heriot.

"To designate all cases involving expenses of more than $1,000, regardless of circumstances, as bankruptcies with 'major medical cause' is both silly and deliberately misleading. A bankruptcy with $1,001 in uncovered medical expenses and $50,000 on a Bloomingdale's card would constitute a 'medical bankruptcy' in their study. Perhaps their expansive definition of 'medical bankruptcy' should include self-proclaimed 'shopaholics,' as well.

"We could go on. The point is simply that the study uses trick after trick to classify as many bankruptcies as possible as medical. It's remarkable they didn't include them all.

"What do the real data show? Numerous studies have found the number of bankruptcies caused by medical debt to be dramatically lower than Mr. Himmelstein and Miss Warren report - down in the single digits.

"Among the most recent is a study of 5,203 bankruptcy files (about threefold the number examined by Mr. Himmelstein and Miss Warren) by the Executive Office of the United States Trustee. It found 54 percent of filers listed no medical debt at all and that medical debt accounted for about 5 1/2 percent of the total general unsecured debt. About 90.1 percent of filers reported no medical debt or medical debt of less than $5,000. Of the 45 percent who reported medical debt, 78 percent reported medical debt below $5,000, with an average of only $1,212 within that group - hardly enough to send the average family into bankruptcy. Overall, 1 percent of the cases accounted for a total of 36 1/2 percent of medical debt, and less than 10 percent of all cases represent 80 percent of all medical debt."

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