The Ugly Legacy of “Redlining” and Medical Debt
David R. Jones, The Urban Agenda
The redlining of Black communities in the 1930s, a racist public policy carried out by the federal government and the real estate industry, resulted in countless Black families across the nation being denied the opportunity to build generational wealth through home ownership.
Here’s how it worked: the government “mapped” neighborhoods along racial, ethnic and socioeconomic lines and assigned rankings to them. Households in high rated communities could assess financial assistance and obtain favorable mortgage rates; those in low rated communities were considered high risks for loans. What followed was de facto housing discrimination and segregation in American urban centers, culminating in a generation of Black families being denied access to the very tools White Americans took advantage of to build wealth, shape communities and sustain families.
To say we’re still living with the consequences of these policies is an understatement. Eighty years later, the impact of redlining is still evident in housing, education and medical care policies and practices. Take for example the growing problem of medical debt in our state.
A recent report by the Urban Institute found that over 740,000 New Yorkers have medical debt, with people of color having higher rates of medical debt than Whites. By analyzing a representative sampling of 2022 individual credit reports across the state, the Institute report found that the problem of medical debt was concentrated in Central New York’s poorest communities, including Black neighborhoods in the city of Syracuse.
The Institute’s findings are consistent with a series of Community Service Society of New York (CSS) reports issued over the last three years called, “Discharged Into Debt,” that examined predatory medical debt collection practices by nonprofit hospitals in the state. Between 2015 and 2020, more than 57,000 patients with medical debt were sued, primarily by hospitals in the counties of Nassua, Suffolk, Onondaga, Queens, Broome, Albany, Steuben, Onedia, Chemung, and Fulton—to name a few.
CSS’s reports on nonprofit hospitals begs the question of how patients at the five State-operated hospitals with medical debt were treated. Surprisingly, three of these state-operated hospitals were at the top or near the top of the leaderboard suing patients for medical debt. SUNY Upstate Medical University in Syracuse, Stony Brook hospital on Long Island and Roswell Park in Erie all sue very large numbers of patients for medical debt. In fact, between 2019-2023, the five state-operated hospitals collectively sued over 12,000 patients for medical debt—at a much higher rate than nearly all the nonprofit hospitals.
SUNY Upstate is a glaring example of the overlap of redlining and medical debt. In 2019, lawyers in the State Attorney General’s Office filed 1,562 lawsuits on behalf of SUNY Upstate against hospital patients in just one year. In 2020, State Attorney General Leticia James suspended medical debt lawsuits to avoid inflicting financial harm on patients during the pandemic and economic downturn. However, SUNY Upstate’s lawsuits resumed in 2021, and by the end of the year were occurring just as frequently as in prepandemic years, resulting in an additional 501 lawsuits.
According to a 2022 CSS analysis of SUNY Upstate, more than 50 percent of the medical debt lawsuits filed were in zip codes where residents are disproportionately people of color. Four of the five most common zip codes in which the Attorney General filed lawsuits (13204, 13205, 13207, and 13208) are places in Syracuse where most residents are people of color. In the fifth, 43 percent of residents are people of color. Most notably, 77 percent of the patients who were sued live in zip codes where the median income is under $70,000 annually, meaning they likely were eligible for hospital financial assistance and should not have been sued in the first place. Another dozen patients who were sued were incarcerated at the time.
What does this have to do with the ugly legacy of redlining? Simply put, if a map of these zip codes were created and laid over “Resident Security” maps dating back to the early period of redlining in Syracuse’s Black communities, there’s a good chance the two maps would be indistinguishable.
State-operated hospitals suing low-income patients for outstanding medical debt would have no discernible impact on the operating budgets of these five hospitals, that collectively receive more than $530 million in federal disproportionate hospital funding to support the provision of uncompensated care. That appears to be the view of Westchester Assembly Member Amy Paulin, who chairs the New York State Assembly Health Committee. This month she introduced legislation called the “Stop SUNY Suing Act/A.8170,” which would ban the five state-operated hospitals SUNY Upstate (Syracuse), SUNY Downstate (Brooklyn), SUNY Stoney Brook (Long Island), Roswell Park (Buffalo) and Helen Hayes (Rockland County) from suing patients for medical debt.
Lawsuits for medical debt have an enormously detrimental impact on the economic security of low-income patients. Instead of suing patients, our state-operated hospitals should do a better job of screening patients for hospital financial assistance. For now, we call on state lawmakers to support the “Stop SUNY Suing Act.”