The Evidence Is Clear: Patients Shouldn’t Pay Their Increasingly Higher Medical Bills

I know someone who knows someone who works at a healthcare revenue cycle company. That someone told my someone that the best thing patients can do when they get medical bills is not pay them.

David W. Johnson, founder and CEO of 4sight Health, likes to say that the smartest people in healthcare work in revenue cycle. If that’s true, and I have no reason to doubt him, then the advice that trickled down to me is sound. Don’t pay your unpaid medical bills. Ever.

That’s a variation of what I’ve been doing for more than 20 years since a large academic medical center in Chicago created two sets of medical billing streams for my youngest son. One was for my son after we named him. Another was for “Baby Boy Burda” before we named him.

I’m forever grateful for the care he and my wife received after delivery; the staff saved both of their lives. But someone out there paid more than $100,000 for the medical bills for Baby Boy Burda, and it wasn’t me.

Since then, I made it a habit to throw all my EOB (explanation of benefits) forms and medical bills in a clear Sterilite bin and wait. Over time, my healthcare providers and my health plan work out what I owe to whom, and it’s always a lot less than the total of the first bills. I give them six months to sort it out and then I pay them all at once.

Now, with this new advice to never pay unpaid medical bills, I could throw them in the clear Sterilite bin and then shred them after a year or so without paying any of them.

Are you in the camp that is sending in money for those unpaid medical bills? In a new study in JAMA Health Forum, four researchers from the American Enterprise Institute, the University of Southern California and Harvard University wanted to know whether patients are paying their medical bills and how much they’re paying.

The researchers’ study pool consisted of 24.5 million and 6.2 million episodes of patient care by people with private health insurance and Medicare Advantage (MA) insurance, respectively, treated at 217 hospitals from the first quarter of 2018 through the third quarter of 2024. The researchers’ primary outcome was the patients’ repayment rate, or percentage of their medical bills that they paid within one year after an episode of care. About 69% of all the patients in the sample had at least some out-of-pocket financial responsibility for their medical bills.

Here’s what the researchers found:

• The average repayment rate for commercially insured patients dropped to 46.1% in 2023 from 53.8% in 2021.
• The average repayment rate for MA-insured patients dropped to 45.7% in 2023 from 54.9% in 2021.
• The average repayment rate for patients in the study also varied by a number of, well, variables, like age, percentage of cost sharing, amount owed, inpatient versus outpatient care, etc.

Not surprisingly, the higher the bill, the lower the repayment rate, per the study.

“High prices may also contribute to incomplete repayment rates by increasing some bills directly or triggering greater cost sharing to offset premium increases,” the researchers said.

Of most interest to me was the finding that the lowest average repayment rates by patients with both types of insurance corresponded with the smallest bills — for privately insured patients, it was medical bills under $50. For MA-insured patients, it was medical bills under $100.

“This may reflect the administrative burden associated with collection activities, which may not be worth it for the smallest bills. It is also possible that consumer attentiveness is higher for more substantial bills,” the researchers said.

In other words, the results support what I do and the advice from down-high from a top revenue cycle company executive: Wait until your medical bills get cut as small as possible and then don’t pay them. Baby Boy Burda would be proud.

Thanks for reading.