What Is Financial Toxicity?
Key takeaways:
Financial toxicity is a term that defines how economic hardship caused by medical bills can affect your health and quality of life.
You have options to address the financial stress of medical bills including assistance programs, debt consolidation, and more.
Medical debt is the most common kind of debt on credit reports and is considered by some as a social determinant of health.
Treatment for a serious health diagnosis can bankrupt an individual or a family. The medical bills can also make recovery more difficult.
Financial toxicity addresses the link between medical costs and poorer health. The term also acknowledges the healthcare affordability crisis.
What is financial toxicity?
The term “financial toxicity” was coined in 2013 by researchers at Duke University. It’s an entry point for understanding the financial hardship associated with having a medical condition. Financial toxicity can be individual, but it often affects households and families.
It’s important to note that medical debt is the most common debt on credit reports.
Talk to all of your healthcare providers if you have concerns about the cost of your treatment. You may be able to find alternative prescriptions or assistance programs to help you handle healthcare costs.
What factors contribute to financial toxicity?
Financial toxicity is caused by several factors, such as:
Rising costs of healthcare, including medical services and prescriptions
Lack of insurance
High out-of-pocket costs for people with insurance
Living in states that haven’t expanded Medicaid
Worsening health status
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What are the effects of financial toxicity?
The financial burden of healthcare can negatively affect you and your family. Researchers argue that financial toxicity should be considered an adverse event caused by medical care.
Some effects of financial toxicity include:
Lack of medication adherence
Hesitancy to get healthcare when needed
Worse perceived mental health
Poorer perceived physical health
Lower quality of life
What information does financial toxicity give us about our healthcare system?
Javier Valero Elizondo, M.D., MPH, co-authored or contributed to several papers about financial toxicity and cardiovascular conditions from 2018 to 2020. He calls financial toxicity a “side effect” of healthcare.
In an interview before his tenure ended at Houston Methodist, Valero Elizondo emphasized that the healthcare system should focus more on prevention. That’s because the rising number of earlier-in-life diagnoses of serious conditions not only impairs health, but can also lower earnings and cripple families financially for a longer time.
His work also explains how financial toxicity hits people with different wealth profiles — particularly families with low incomes.
“For some people, spending $5,000 might be nothing,” he said. “And for some others, spending $1,000 might be a catastrophic healthcare expenditure.”
Why is cancer often associated with financial toxicity?
Financial toxicity was coined in a medical paper authored by two oncologists. They wrote about the costs of cancer care and the financial distress caused by treatment.
Cancer is among the five most costly conditions to treat. If you have a cancer diagnosis and don’t have insurance, you have options to avoid financial toxicity.
What can I do about stress caused by medical debt?
You can relieve financial stress by taking action. If you qualify, you have many options to address medical debt. They include:
Financial assistance programs for medical bills
Charity care or indigent care to cover your bills at nonprofit hospitals
Patient assistance programs for medical care and prescriptions
Negotiating medical bills
Bankruptcy, as a last resort
Clinical trials to get access to free, experimental treatment
Is medical debt a social determinant of health?
Social determinants of health are nonmedical factors that influence health outcomes. They are a constellation of systems and inequities that place people at risk of health disparities.
The U.S. Department of Health and Human Services organizes social determinants of health into five areas:
Economic stability
Education access and quality
Healthcare access and quality
Neighborhood and built environment
Social and community context
Financial toxicity is linked to food and housing insecurity. Scholars have proposed adding medical debt to the list of social determinants of health.
The bottom line
Medical debt can affect your health. Coined in 2013, the term “financial toxicity” discusses the effect of distress caused by medical bills and the healthcare affordability crisis.
Simply put, healthcare costs can cause poorer health outcomes. But, you can overcome financial toxicity by reaching out for help. You have options including financial assistance programs, debt consolidation, and more.
Why trust our experts?
References
Centers for Disease Control and Prevention. (2022). Social determinants of health at CDC.
Chino, F., et al. (2023). Introduction to financial toxicity and the growing affordability crisis. Journal of the American College of Radiology.
Cohen, R.A., et al. (2023). Problems paying medical bills: United States, 2021. National Health Statistics Reports.
Consumer Financial Protection Bureau. (2022). Medical debt burden in the United States.
Himmelstein, D. U., et al. (2022). Prevalence and risk factors for medical debt and subsequent changes in social determinants of health in the US. JAMA Network Open.
Khera, R., et al. (2020). Financial toxicity in atherosclerotic cardiovascular disease in the United States: Current state and future directions. Journal of the American Heart Association.
Mendes de Leon, C. F., et al. (2021). Medical debt as a social determinant of health. Journal of the American Medical Association.
National Association for Biomedical Research. (2020). The animals helping to combat the five most expensive diseases.
Shah, K., et al. (2022). Role of financial toxicity in perpetuating health disparities. Trends in Cancer.
U.S. Department of Health and Human Services. (n.d.). Social determinants of health. Healthy People 2030.
Valero-Elizondo, J., et al. (2019). Financial hardship from medical bills among nonelderly U.S. adults with atherosclerotic cardiovascular disease. Journal of American College of Cardiology.
Zafar, S. Y., et al. (2013). Financial toxicity, part I: A new name for a growing problem. Oncology.
This article is solely for informational purposes. This article is not professional advice concerning insurance, financial, accounting, tax, or legal matters. All content herein is provided “as is” without any representations or warranties, express or implied. Always consult an appropriate professional when you have specific questions about any insurance, financial, or legal matter.
