Study shows steep financial costs of healthcare inequities

This article first appeared on our sister site Medical Economics.

According to a recent analysis of the costs of unequal treatment of patients based on race, ethnicity, and socioeconomic status, the estimates run into the hundreds of billions of dollars.^1,2

“Investment in achieving health equity would not only help people live longer, healthier lives, it would also pay dividends economically that would benefit community well-being long-term,” said lead study author Thomas A. LaVeist, PhD.

As of 2018, the estimated burden of racial and ethnic health inequities ranged from $421 billion to $451 billion. Based on education-related inequities, the costs ranged from $940 billion to $978 billion – the latter figure being about twice as large as the annual growth rate of the U.S. economy for the same year.

The economic burden is based on three components: excess medical care expenditures, lost labor market productivity, and premature death. The estimates are a range because researchers used different data sets to tally them.

“The results of this study demonstrate that health inequity represents not just unfair and unequal health outcomes, but it also has a financial cost,” study leader Thomas A. LaVeist, PhD, said in a news release. LaVeist is dean of the Tulane University School of Public Health and Tropical Medicine, which compiled the analysis with researchers from the National Institute on Minority Health and Health Disparities (NIMHD), Johns Hopkins Bloomberg School of Public Health, Uniformed Services University, TALV Corp., and the National Urban League.¹

“Investment in achieving health equity would not only help people live longer, healthier lives, it would also pay dividends economically that would benefit community well-being long-term,” LaVeist said. “To be sure, it will take significant resources to address health inequalities, but it is also true that the costs of not addressing health inequalities are substantial.”¹

Key findings

Funded by the National Institutes of Health, the study used four national databases to estimate economic burdens of health inequities for five racial and ethnic minority groups: Asian, American Indian/Alaska Native, Black, Latino, and Native Hawaiian/Pacific Islander.

The researchers said key findings include:

• The Black population bore 69% of the economic burden for racial and ethnic inequities due to premature mortality.
• Native Hawaiian/Pacific Islander and American Indian/Alaska Native populations had the highest economic burden per person, at $23,225 and $12,351, respectively.
• The Black population had the highest economic burden of racial and ethnic health inequities in most states (33), followed by Hispanic/Latino (nine states), American Indian/Alaska Native (eight states), and Native Hawaiian/Pacific Islanders (one state.)
• The burden of racial and ethnic health inequities relative to each state’s GDP varied from 0.14% in Vermont to 8.89% inMississippi.
• 17 states had a burden higher than the annual growth rate of the U.S. economy in 2018.

Education matters

Apart from racial and ethnic disparities, education is a driver of economic burdens of health inequalities, the researchers said.

Adults with a high school diploma had the highest cost at $9,982 and bore 61% of the burden of education-related health inequities. Adults with less than a high school diploma had a cost of $9,467; that group was 9% of the population but bore 26% of the economic burden. The financial burden for adults with some college was $2,028, according to the study.

Estimated costs were based on premature deaths, which made up 66% of the burden; lost labor market productivity, at 18%; and excess medical care costs at 16%.

“The right thing to do”

In recent years, there have been compelling appeals to social justice arguments as a reason for devoting more resources to eliminating health disparities.

“Addressing health inequities is ‘the right thing to do,’” the study said. “However, there is a compelling utilitarian argument as well. Health inequities are a significant drag on the economy and affect everyone.”

NIMHD commissioned the study and Director Eliseo J. Pérez-Stable, MD, agreed with that finding.

“The exorbitant cost of health disparities is diminishing U.S. economic potential,” Pérez-Stable said in the press release. “We have a clear call to action to address social and structural factors that negatively impact not only population health, but also economic growth.”

References

1. Tulane University. Study: Rising costs of racial and ethnic health inequities in US surpass $450 billion. Accessed June 13, 2023. https://www.eurekalert.org/news-releases/990507.

2. LaVeist TA, Pérez-Stable EJ, Richard P, et al. The Economic Burden of Racial, Ethnic, and Educational Health Inequities in the US. JAMA. 2023;329(19):1682-1692. doi: 10.1001/jama.2023.5965