Expert Commentary

Impact of air quality on hospital spending

2010 RAND Corporation study on the cost of medical care attributed to California's failure to meet federal clean air standards.

Excessive levels of ozone and other air pollutants are costly in many ways, not just to human health. Beyond the direct health care costs resulting from complications, air pollution also imposes substantial burden on public and private health insurers.

A 2010 RAND Corporation study, “The Impact of Air Quality on Hospital Spending,” attempts to quantify the cost of pollution-related medical care attributed to the failure of meeting federal clean air standards across California. To do so, the researchers used records from air pollution agencies and hospitals from 2005 to 2007.

The paper’s key findings include:

  • Between 2005 and 2007, nearly 30,000 hospital admissions and emergency-room visits could have been avoided throughout California if federal clean-air standards had been met.
  • These cases led to higher hospital care cost of approximately $193 million. Medicare and Medicaid spent about $132 million on such hospital care while the rest was incurred by private third-party purchasers.
  • Five case studies of individual hospitals in Riverside, Fresno, Lynwood, Stanford and Sacramento show that the costs incurred by the different types of payers vary by region.

Improving air quality would lower pollution-related health spending. This could potentially translate to lower insurance premiums for consumers, as well as to higher profits for insurers.

Tags: cars, California, pollution, medicine