Financial Health Is Health: Addressing Acute and Chronic Financial Stress Across the Care Spectrum

Poverty rates decreased in recent years in Canada and the United States, with 2021 rates falling to 8.1% and 11.6%, respectively.^1,2  However, rates have since fluctuated; US child poverty more than doubled from 2021 to 2022, with the supplemental poverty measure, which is adjusted to account for government benefits, rising from 5.2% to 12.2%.³  Many families endure financial vulnerability, with approximately 1 in 3 Americans and 1 in 4 Canadians unable to pay for an unexpected $400 emergency and 60% of Americans living paycheck to paycheck.^4–6  Financial vulnerability is not equitably distributed; systemic racism and historical and persistent discrimination result in significantly higher rates of poverty for children who may be underrepresented minorities or immigrants. According to the 2022 US census data, 20% of Latino children, 18% of Black children, 12% of children of 2 or more races, and 10% of Asian and Pacific Islander children live in poverty, compared with 7% of White children.⁷ 

For all children and families, hospitalizations and other medical needs can contribute to an acute-on-chronic insult that amplifies financial stress with potential social, mental, and physical health consequences. More than 60% of bankruptcies have been attributed to medical costs, and more than 40% of adults report medical and/or dental debt.^8,9  For children and families who are interfacing with the health care system, there are opportunities to mitigate not only the acute financial stress of hospitalization, including direct medical costs, food, lodging, transportation, childcare, and time away from work, but also to address chronic underlying financial stressors. As Nadarajah et al highlight in their findings in this edition of Hospital Pediatrics,¹⁰  medical settings, including children’s inpatient wards, are primed to support the financial needs of children and families.

In their study, entitled, “Experiences of Financial Stress and Supports in Caregivers During Pediatric Hospital Admission,” Nadarajah et al interviewed caregivers of children admitted to a pediatric hospital and conducted qualitative analyses to assess financial needs, health-related financial barriers, and opportunities for improved financial support systems for families of hospitalized children. Reported themes included the acute financial stressors of hospitalization, ongoing barriers to accessing financial supports, and opportunities for health care systems to mitigate these barriers. The strengths of this study included its incorporation of diverse parent perspectives on what can be a sensitive topic. The authors included multilingual respondents and assessed not only challenges but also potential patient- and family-centered solutions. Although respondents may have been subject to social desirability bias, the authors reported a range of perspectives and insights. Because this is a single-center study in Canada, additional studies in other settings would help elucidate more diverse perspectives, especially if they are conducted in locations where available services and underlying insurance access may vary. In the United States, for example, which, unlike Canada, does not have universal health coverage, higher rates of uninsurance and underinsurance could differentially affect parental perspectives. Importantly, this study builds on a growing body of literature that indicates that screening for health-related social needs, when it can be linked directly to services that benefit children, is often well-received by families, but patient autonomy and individual preferences are important to maintain.^11,12 

As Nadarajah et al discuss, there is a clear need and opportunity to expand and systematize hospital-based financial and material supports in the acute setting while also improving access to financial services through medical-financial partners across the care spectrum. In recent years, the United States and Canada have led the way in establishing novel medical financial partnerships, modeled after the medical legal partnerships, whereby financial wellness and wealth-building resources are integrated into the delivery of clinical services. Medical financial partnerships identify federal and community wealth-building resources that may include access to free tax filing and the Earned Income Tax Credit, financial coaching programs directed at debt and credit management, and establishment of nonpredatory banking accounts and college savings accounts. Although individual medical financial partnership models vary, they all operate within the framework that sound financial health is foundational to long-term physical and mental health.^13–15 

Alongside medical-financial partnerships, opportunities for expanding financial support in medical settings can occur at individual, system, and policy levels. Hospital-based financial aid initiatives mitigating the direct cost impacts of hospitalization should be easily accessible and can include financial support for uncovered health care, travel, parking, temporary housing, and meal expenses. System changes are needed to simplify application burdens for a range of governmental financial support services, as many programs are underutilized.¹⁶  These programs, which in the United States include the Earned Income Tax Credit, Child Tax Credit, and Paid Family Medical Leave Act, are key antipoverty measures that have opportunity for expansion with additional evidence-based initiatives such as Universal Basic Income and Baby Bonds.^17,18  These universally implemented asset building programs are important early steps in reducing wealth disparities and their attendant health inequities.¹⁹  By contrast, in a recent example of a promising US policy that was not sustained, the end of the American Rescue Plan’s Child Tax Credit is attributed to much of the sharp doubling of US child poverty rate from 2021 to 2022.²⁰  Although local, state, and federal policies are needed to expand access to these services and minimize barriers to entry, the health care system can bridge the gap for many. Trusted health care messengers in medical offices and on hospital floors can deliver in-the-moment financial services and enrollment.

The time is ripe to consider financial health alongside physical, mental, and social health and to strengthen medical financial partnership integration into health care models. We can elevate these partnerships alongside other health navigation activities across the health care continuum while centering family’s voices in their implementation.