EDIT: Other commenters have pointed out reasons why the elimination of debt sold really cheap is unlikely to affect much the lives of recipients. Still, if the debt relieved did in fact significantly help the beneficiaries, it could turn out to be very effective. However, we won’t know until RIP releases recipient outcomes data.
TL;DR: About as cost-effective as GiveWells’s top charities, IF my assumption about outcomes is broadly right. $14.16 to provide debt relief to one person. If one assumes a lifespan increase of 0.2% (less than two months) as the effect (by preventing healthcare avoidance), it comes out to $7080 per death-equivalent-in-lifespan averted. I recommend looking further into it, particularly with respect to outcomes.
Hi Layla, welcome to the Forum! Thanks for posting!
This looks like an interesting opportunity. Within the cause area of health in the US, RIP seems to have chosen a big and tractable problem, and to be triaging their beneficiaries according to the relevant metrics.
Here is my attempt to have a rough idea about RIP’s cost-effectiveness.
RIP claims that it has “helped 5,492,948 individuals and families” and has relieved $8,520,147,644 of medical debt. The average debt relieved per recipient is thus $8,520,147,644 / 5,492,948 = $1551. If, as you say, “every $100 donated clears $10,000 in medical debt”, then the cost per recipient is $15.51 (!!!).
I was initially skeptical of this calculation, but it checks out. In its 2021 year end report, RIP says that it relieved debt to 1,312,697 people during the year, and in its 2021 financial statement declares total expenses of $18,587,272. So the cost per recipient is $18,587,272 / 1,312,697 = $14.16.
It’s hard to estimate the benefit from medical debt reduction. Let’s say, for the sake of simplicity, that the avoidance of medical treatment and mental health problems derived from struggling with medical debt make people live 0.2% shorter lives (1.92 months if starting out with an 80-year lifespan), and that the debt relief provided eliminates that effect. It follows that preventing 0.002 death-equivalents costs $14.16, and thus preventing one death-equivalent unit of lifespan reduction costs $7080. This is about as cost-effective as GiveWell’s most recommended charities.
This would be huge if true. However, my priors advise me against getting too hopeful. It should be hard to find a charity about as cost-effective as GiveWell’s top charities. RIP has been assessed by Charity Navigator, and does a fair bit of marketing. It would be weird if no EA had picked this up before. I have reason to believe that I am overestimating the positive effects of debt relief.
To find out whether RIP is really so effective, it would be great to have numbers on the welfare outcomes of debt relief. I found this report on RIP’s site, which while a potentially useful qualitative source, makes no effort to quantify outcomes.
Side note: calling a world modelling disagreement implied by differences in cause prioritisation a “schism” is in my opinion unwarranted and (low-probability, very negative value) risks becoming a self-fulfilling prophecy.