Large hospital bill? You should’ve chosen the hospital down the street.

It’s been said that most Americans are one serious illness away from bankruptcy. In fact, one study shows that, after paying for essentials like food and housing, millions of patients face catastrophic health expenses that exceed forty percent of their income. It’s a real problem.

But what is not known is how many Americans are taking on debt they could have avoided by choosing a hospital with a more generous– sometimes much more–financial assistance policy.

Defining large bills

Hospitals usually offer assistance for “large bills” based on the amount of the bill as a proportion of patient income. According to data compiled by the Lown Institute from financial assistance policies at 1,250 hospitals, the definition of a large bill varies widely. While most hospitals offer assistance for medical bills that exceed 25% of patient income, some hospitals offer assistance for medical bills that exceed 5% of income, and others only provide assistance for bills that are at least 100% of patient income. This variation exists even among hospitals that are in close proximity to each other.

A tale of two cities

At Medical City North Hills hospital in Fort Worth, TX, patients earning up to 400% of the federal poverty guideline with a bill that is at least $1,500, are eligible for financial assistance. That means a family of three making the national median income (around $75,000) could get help for a bill that is just 2% of their income. 

But an eight minute drive away at Texas Health HEB, that same family would need their bill to reach $75,000 or more before they would qualify for help.

In Pennsylvania, Evangelical Community Hospital only provides assistance for bills amounting to at least 100% of patient income. So our family of three is again out of luck until their bill hits $75,000. Meanwhile, just thirty minutes away, they would qualify for help at  UPMC Williamsport with a bill of just $11,187 since the threshold is only 15% of income there.

Assistance for large bills is just one part of a hospital financial assistance policy. Hospitals may have different eligibility rates for free care, asset tests for eligibility, or may exclude certain services or providers from assistance. However, the above examples show the flexibility that hospitals have to create their own policies, and how a patient’s choice of one local hospital over another could have a major impact on their financial health.