Paying Off People’s Medical Debt Has Little Impact on Their Lives, Study Finds

Over the past decade, R.I.P. Medical Debt has grown from a tiny nonprofit group that received less than $3,000 in donations to a multimillion-dollar force in health care philanthropy.

It has done so with a unique and simple strategy to tackling the enormous amounts that Americans owe hospitals: buying up old bills that would otherwise be sold to collection agencies and wiping out the debt.

Since 2014, R.I.P. Medical Debt estimates that it has eliminated more than $11 billion of debt with the help of major donations from philanthropists and even city governments. In January, New York City’s mayor, Eric Adams, announced plans to give the organization $18 million.

But a study published by a group of economists on Monday calls into question the premise of the high-profile charity. After following 213,000 people who were in debt and randomly selecting some to work with the nonprofit group, the researchers found that debt relief did not improve the mental health or the credit scores of debtors, on average. And those whose bills had been paid were just as likely to forgo medical care as those whose bills were left unpaid.

“We were disappointed,” said Ray Kluender, an assistant professor at Harvard Business School and a co-author of the study. “We don’t want to sugarcoat it.”

Allison Sesso, R.I.P. Medical Debt’s executive director, said the study was at odds with what the group had regularly heard from those it had helped. “We’re hearing back from people who are thrilled,” she said.