Bankruptcy bill hackery: the sequel
Posted by Thomas Nephew on March 21st, 2005
An evidently nettled Ms. Gail Heriot responded to “Bankruptcy Bill Hackery” last week with a lengthy post defending her National Review Online article (”Misdiagnosed“) against my description of it as a “spectacularly stupid” analysis.
I had pointed out that the authors’ claim was not quite what Heriot or news coverage implied: medical causes — including but not limited to bills — led to around half of all bankruptcies. In particular, the number of people having any one of four sometimes overlapping problems –
- Bankruptcy attributed to specific illness or injury (28.3% of all respondents), and/or
- Loss of two or more weeks of work due to illness or injury (21.3%), and/or
- Unrecovered medical bills exceeding $1000 in the two years before filing for bankruptcy (27.0%), and/or
- Mortgaged home to pay medical bills (2.0%)…
… amounted to 46.2% of bankruptcies. Cases lacking these features, but attributed to gambling, drug addiction, and/or births or deaths in the family accounted for another 8.3% of all bankruptcies, for a total of 54.5% of all bankruptcies.
My main criticism was that Ms. Heriot ignored the contribution of the second reason (loss of two or more weeks of work due to illness or injury) to medical causes of bankruptcy. In her response, Ms. Heriot doggedly repeats the mistake:
Nephew, however, thinks that I should have also pointed out that in 21.3% of bankruptcies, the debtor or the debtor’s spouse had lost at least two weeks of work-related income because of illness or injury.” Gosh, I thought I was being nice by using the larger 28.3% figure. In writing the National Review Online piece, I was willing to assume for the sake of brevity that the 28.3% was a fair one. In fact, I believe that even that figure is probably substantially overstated. But if Nephew would prefer that I use the lesser figure of 21.3%, then fine. The point is that it is misleading to claim that 54.5% of all bankruptcies have a “medical cause.” It simply isn’t so.
Barring egregious errors in the conduct or tabulation of the survey: yes, it simply is so. The 21.3% and 28.3% figures aren’t numbers to choose between to describe the prevalence of medical-related bankruptcies, they describe partly overlapping groups to combine.
Ms. Heriot herself seems to recognize this in her next and penultimate paragraph, when she describes the groups as “overlapping substantially.” Exactly so — but, crucially, they do not overlap perfectly. Thus, the report indicates that these two figures, together with the 27.0% (large medical bills) and 2.0% (mortaged home to pay medical bills) — fail to overlap enough that 46.2% of bankruptcies are undeniably medically related in one or more of these four ways. The balance of the 54.5% figure (gambling, drugs, births, etc.) can be nitpicked if you’re so inclined, which I’m not. But either way, you’ve got about half of bankruptcies being medically related.
The early part of Ms. Heriot’s rebuttal is devoted to demonstrating that the authors and their publicists made points about the national health care system based on these findings. But why not? Even if you examine the 27.0% figure by itself, that’s a lot of people bankrupted — the authors estimate well over one million — who can unambiguously point to lack of adequate health care coverage as a major reason. But we all draw the line somewhere; Ms. Heriot’s concerns are apparently only activated by causes bankrupting twice or so that number of Americans — hence, perhaps, her rhetorical struggle to push the medical-related bankruptcy figure below the magic 50% mark.
In “Misdiagnosed”, Heriot makes a revealing statement: “Nobody likes to pay $1,000 in medical expenses even when they get two years to do it in, but for most Americans (particularly those with enough at stake to seek the protection of bankruptcy) it is not catastrophic.” Spoken like a tenured law professor! To one person, $1,000 is chump change; to another, it’s the final straw. Debates about bankruptcy aren’t about “most Americans,” they’re about the ones at the end of their financial ropes. Let’s be sure to scoff from our armchairs while they dangle.
It was ungentlemanly to use the word “stupid” in my earlier criticism, but in my defense, I used it instead of “mean spirited.” Readers may judge whether either or both descriptions apply.
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EDIT, 10/17/2006: “you’ve got half of bankruptcies being medically related,” not “you’ve got half of medical bankruptcies.”
Category: Post. Tags: bankruptcy.
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