The Origins of Medical Debt

In the 19th century, physicians worked as private practitioners and had to negotiate payment directly with patients. Bills were presented on a quarterly or annual basis, and physicians often struggled to collect payments. In the early 20th century, hospitals started to appeal to middle and upper-income patients and became more focused on providing care for paying patients. There was no legal right to care, and hospitals could refuse treatment to patients. This began to change in the 1960s with the passage of Medicare and Medicaid, which decreased the number of uninsured Americans. In the early 1980s, hospitals faced financial shortfalls and started turning away nonpaying patients, leading to the passage of the Emergency Medical Treatment and Active Labor Act (EMTALA) in 1986. EMTALA required hospitals to provide screening exams and stabilize emergent conditions for all patients, regardless of their ability to pay.