Economic burdens of health inequalities in the United States

 
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April 4, 2012

America’s national health care expenditures grew 4% to $2.5 trillion in 2009 — $8,086 per person — and accounted for 17.6% of GDP, according to the Centers for Medicare & Medicaid Services. Many communities remain under-insured and under-treated within the current system, potentially adding significantly to overall costs.

A 2009 study commissioned by the Joint Center for Political and Economic Studies and carried out by Johns Hopkins University and the University of Maryland, “The Economic Burdens of Health Inequalities in the United States,” analyzed Medical Expenditure Panel Survey data for the years 2002-2006 to determine the implications of this cost burden.

The study noted that such costs “include direct expenses associated with the provision of care to a sicker and more disadvantaged population as well as indirect costs such as lost productivity, lost wages, absenteeism, family leave to deal with avoidable illnesses, and lower quality of life. Premature death imposes significant costs on society in the form of lower wages, lost tax revenues, additional services and benefits for families of the deceased, and lower quality of life for survivors.” The cost of a premature death (before the age of 75) is calculated at $50,000 per life lost — a “conservative” figure, the authors noted, relative to other research theories.

The study’s findings include:

  • Nearly 31% of direct medical care expenditures for African Americans ($135.9 billion), Asians ($11.4 billion) and Hispanics ($82 billion) were excess costs due to health inequalities. Eliminating health disparities for minorities would have reduced direct medical care expenditures by $229.4 billion for the years 2003-2006.
  • About 95% of all indirect costs of health inequalities ($957.5 billion) were due to the costs associated with premature deaths. The remaining $50.3 billion resulted from costs associated with the treatment of illnesses.
  • Overall, the combined costs of health inequalities and premature deaths in the United States between 2003 and 2006 totaled $1.24 trillion. By eliminating health inequalities for minorities, the U.S. would have reduced its indirect costs associated with illness and premature death by more than $1 trillion over this period.

“The large number of premature deaths,” the researchers concluded, “represents a substantial loss of human potential, a loss of talent and productivity that might otherwise have contributed to the betterment of society. By exacting a substantial burden on the economy, health inequalities visit further suffering on society.”

Tags: race, health care reform, inequality

 

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Citation: LaVeist, Thomas A.; Gaskin, Darrell J.; Richard, Patrick. "Economic Burdens of Health Inequalities in the United States," Joint Center for Political and Economic Studies, September 2009.