Inside Undue Medical Debt, the nonprofit helping hospitals erase medical bills

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Got debt? You’re not alone.

Many hospitals offer financial assistance programs or charity care, but still, over half of US hospital bills go unpaid, Becker’s Hospital Review reported in February 2024.

These hospitals may write off those unpaid bills as “bad debt,” sell the debt to a collection agency for a fraction of its worth, sue patients for payment, or refuse future nonemergency care to them.

But since 2014, there’s been another option: Undue Medical Debt.

The nonprofit uses donations from private organizations and local governments to buy years of bad debt from debt trading companies or healthcare providers—at a discount. The company says it has relieved nearly $23 billion in debt for 14.7+ million patients who make less than 4x the federal poverty level or have debt that’s over 5% of their income.

Undue’s leaders make it clear they are a bandage rather than a solution. But they have partnered with 300+ physician practices and health systems like Connecticut-based Trinity Health of New England as well as states like North Carolina to buy debt and help come up with strategies to help patients avoid it going forward.

Ruth Landé, VP of provider relations at Undue Medical Debt, talked to Healthcare Brew about the organization’s work.

This interview has been edited for length and clarity.

How do healthcare systems and providers benefit from partnering with you?

Not only can we acquire those accounts and do the debt relief, we also give analytics.

We’ll tell you what the [patients’] income levels were. They can then figure out, “Why don’t we capture those people in our financial assistance?” We can really walk them through: What are other hospitals doing in your area? What tools might be out there?

The hospital misses so many people [who qualify for assistance]. And this is not some diabolical plot because it’s not what a hospital wants, but it is hard to find out what people’s income levels are. There’s technology you can buy. You have to pay for it every time you run a transaction, just like we do.

What’s the biggest obstacle in getting healthcare systems on board with a partnership?

We’ve been reaching a lot of places, growing very fast, but it’s still a relatively new concept for healthcare to have an option like us.

We spend a lot of time explaining…we’re not selling anything, and we’re nonprofit. And the other thing, I think, is that hospitals really feel beaten up. They feel so beaten up in the media, and they feel like they’re on the defensive. And when you’re on the defensive a lot, it’s hard for you to open up and trust.

Beyond forgiving debt, what can the average healthcare provider do to help patients afford care?

If you look at the financial assistance policy for any hospital out there, you will see a whole list of clinicians who don’t participate.

People can educate patients. They can poke around to see who’s not included in financial assistance to make sure that nobody falls through. If the anesthesiologists are not a part of that, that makes no sense, right?