Are All Collections Equal? The Case of Medical Debt

IF 0.3 4区 经济学 Q4 Economics, Econometrics and Finance
Kenneth P. Brevoort, Michelle Kambara
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引用次数: 9

Abstract

Bills for unreimbursed medical care may be reported to national credit reporting agencies by third-party debt collectors. The use of this information in credit scoring models, which have not traditionally distinguished collection accounts for medical bills from other collection accounts, has been controversial because of the unique characteristics of medical debt. This paper explores the predictive value of medical collections in the context of a credit scoring model. We find that medical collections are less predictive of future credit performance than nonmedical collections. We also find that medical collections that have been paid in full are less predictive than those that remain unpaid. These results suggest that the practice of treating all collections the same over-penalizes the credit scores of consumers with medical collections and reduces the predictiveness of credit scoring models.
所有集合都是相等的吗?医疗债务案例
第三方收债人可向国家信用报告机构报告未报销的医疗保健账单。由于医疗债务的独特特征,在信用评分模型中使用这些信息一直存在争议,这些模型传统上没有区分医疗账单的催收账户和其他催收账户。本文探讨了在信用评分模型的背景下,医疗收藏的预测价值。我们发现医疗托收比非医疗托收更难以预测未来的信用表现。我们还发现,全额支付医疗费用的预测能力低于未支付医疗费用的预测能力。这些结果表明,对待所有收集相同的做法过度惩罚消费者的信用评分与医疗收集,并降低了信用评分模型的预测性。
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来源期刊
Journal of Credit Risk
Journal of Credit Risk BUSINESS, FINANCE-
CiteScore
0.90
自引率
0.00%
发文量
10
期刊介绍: With the re-writing of the Basel accords in international banking and their ensuing application, interest in credit risk has never been greater. The Journal of Credit Risk focuses on the measurement and management of credit risk, the valuation and hedging of credit products, and aims to promote a greater understanding in the area of credit risk theory and practice. The Journal of Credit Risk considers submissions in the form of research papers and technical papers, on topics including, but not limited to: Modelling and management of portfolio credit risk Recent advances in parameterizing credit risk models: default probability estimation, copulas and credit risk correlation, recoveries and loss given default, collateral valuation, loss distributions and extreme events Pricing and hedging of credit derivatives Structured credit products and securitizations e.g. collateralized debt obligations, synthetic securitizations, credit baskets, etc. Measuring managing and hedging counterparty credit risk Credit risk transfer techniques Liquidity risk and extreme credit events Regulatory issues, such as Basel II, internal ratings systems, credit-scoring techniques and credit risk capital adequacy.
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