America’s healthcare system is a mess. The idea that one must go bankrupt in order to pay for lifesaving care is a uniquely American problem. And while governments struggle to solve it, one not-for-profit has helped millions of Americans and wiped out $6.7 billion of medical debt in the process.
The not-for-profit is called RIP Medical Debt and it takes a novel approach to the problem of medical debt. It approaches hospitals and buys bundles of delinquent medical debt – debt that is past due and unpaid – and then rather than chasing that debt, simply erases it.
There is a thriving market for delinquent debt around the world. Hospitals do not want to spend their time chasing debts, so they sell this debt for pennies on the dollar. The buyers, debt collection companies, then try and recover this debt and make the difference between what they bought the debt for and what they can recover. RIP Medical Debt are inserting themselves into that process, buying the debt but simply choosing not to chase it.
To date, RIP Medical Debt has repurchased $6.7 billion in unpaid debt and relieved 3.6 million people of their obligation to pay for their healthcare. They report that retiring $100 in debt costs an average of $1.
They do rely on donations, and recently received $50 million from MacKenzie Scott. So this is not a long term solution to America’s healthcare system. But, in the meantime, it is a pretty remarkable organisation helping a lot of people out of an incredibly tough time.
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