Cancer diagnosis puts people at greater risk for bankruptcy

People diagnosed with cancer are more than two-and-a-half times more likely to declare bankruptcy than those without cancer, according to a new Hutchinson Center study led by Dr. Scott Ramsey, an internist and health care economist in the Public Health Sciences Division.

The study also found that younger cancer patients had two- to five-fold higher bankruptcy rates compared to older patients, and that overall bankruptcy filings increased as time passed following diagnosis.

The findings were published online May 15 in the journal Health Affairs. The paper will also appear in the journal's June print edition.

Co-authors on the paper, which included a chief judge for a U.S. Bankruptcy Court, undertook the research because the relationship between receiving a cancer diagnosis and bankruptcy is less well understood than the much-studied link between high medical expenses and likelihood of bankruptcy filing, according to Ramsey, who directs the Hutchinson Institute for Cancer Outcomes Research (HICOR).

This institute is dedicated to health economics and cancer outcomes research. Its mission is to improve the efficiency and effectiveness of cancer prevention, early detection and treatment to reduce the economic and human burdens of cancer. HICOR is believed to be the first of its kind among comprehensive cancer centers nationwide.

Bankruptcy: 'extreme manifestation' of larger picture of economic hardship for patients

"This study found strong evidence of a link between cancer diagnosis and increased risk of bankruptcy," the authors wrote. "Although the risk of bankruptcy for cancer patients is relatively low in absolute terms, bankruptcy represents an extreme manifestation of what is probably a larger picture of economic hardship for cancer patients. Our study thus raises important questions about the factors underlying the relationship between cancer and financial hardship."

The authors noted that because cancer is generally a sudden and unexpected event, the risk of bankruptcy is influenced by factors such as debt load before diagnosis, assets, presence, and terms of health and disability insurance, number of dependent children, and incomes of others in the household at the time of the cancer diagnosis.

For this study, researchers analyzed data from a registry of adults in western Washington who were diagnosed with cancer between Jan. 1, 1995, and Dec. 31, 2009. They were compared to a randomly sampled age-, sex-, and ZIP-code-matched population of people without cancer. Cancer cases were identified using the Cancer Surveillance System of Western Washington, a population-based cancer registry based at Fred Hutch that is part of the National Cancer Institute's Surveillance Epidemiology and End Results Program.

The cancer and control cohorts were both linked with the records of the U.S. Bankruptcy Court for the Western District of Washington. The court serves all 13 counties represented in the cancer registry used in the study. Researchers included Chapter 7 or Chapter 13 bankruptcy filings only.

'Strongest evidence' between a disease and risk for severe financial distress

"This is the strongest evidence we have between a disease and risk for severe financial distress," Ramsey said. "I've not seen other studies that linked databases of this quality."

Among the study's key findings:

• Between 1995 and 2009 there were 197,840 people in western Washington who were diagnosed with cancer and met the inclusion criteria for the study. Of those, 4,408 (2.2 percent) filed for bankruptcy protection after diagnosis. Of the matched controls who were not diagnosed with cancer, 2,291 (1.1 percent) filed for bankruptcy.
• Compared to cancer patients who did not file for bankruptcy, those who did were more likely to be younger, female and nonwhite. The youngest age groups had up to 10 times the bankruptcy rate as compared to the older age groups.

"The youngest groups in the study were diagnosed at a time when their debt-to-income ratios are typically highest—often unavoidably, because they are paying off student loans, purchasing a home, or starting a business," the authors wrote. "All working-age people who develop cancer face loss of income and, in many cases, loss of employer-sponsored insurance, both of which can be devastating for households in which the patient is the primary wage earner."

In contrast, people age 65 or older generally have Medicare insurance and Social Security benefits. These older people are likely to have more assets and possibly more income than working-age people. "However, it is likely that having stable insurance (specifically, coverage not tied to employment) plays a major role in mitigating the risk of bankruptcy for those over age sixty-five," the authors wrote.

Other findings:

• The proportion of cancer patients who filed for bankruptcy within one year of diagnosis was 0.52 percent, compared to 0.16 percent within one year for the control group. For bankruptcy filings within five years of diagnosis, the proportion of cancer patients was about 1.7 percent compared to 0.7 percent for the control group.
• The incidence rates for bankruptcy at one year after diagnosis for the cancers with the highest overall incidence rates, stated as rates per 1,000 "person years" from diagnosis, were as follows: thyroid, 9.3; lung, 9.1; uterine, 6.8; leukemia/lymphoma, 6.2; colorectal, 5.9; melanoma, 5.7; breast, 5.7; and prostate. 3.7. The incidence rate for all cancers combined was 6.1. ("Person years" takes into account the number of people in the study and the amount of time each person spent in the study.)
• The high bankruptcy incidence rate for those with thyroid cancer may be because this type of cancer affects younger women more often than other cancers do. "Compared to men, younger women are more likely to live in single-income households and to have lower wages and lower rates of employment, and therefore less access to high-quality health insurance - leaving them more financially vulnerable," the authors wrote.

Other Fred Hutch co-authors were Dr. Polly Newcomb, head of the Cancer Prevention Program in PHS; Karma Kreizenbeck, HICOR project director; and Catherine Fedorenko, a systems analyst programmer in PHS.

The National Center on Minority Health and Health Disparities at the National Institutes of Health funded the research. Co-authors included Karen Overstreet, chief judge of the U.S. Bankruptcy Court, Western District of Washington; and researchers from the University of Washington; University of Utah School of Medicine; and University of Bristol (U.K.).