Man…institutionalized racism is expensive (2)

The World Bank puts India's GDP at $1.22 trillion dollars. U.S. health disparities cost $1.24 trillion between 2003 and 2006.

The Economic Burden of Health Inequalities in the United States (LaVeist T.A., Gaskin D.J., & Richard P., 2009: Joint Center for Political and Economic Studies)

Aims

a) Estimate the direct medical costs and indirect costs to the economy of health inequalities, which relates to b);

b) Estimate the potential financial benefit that would accrue to the economy if every racial/ethnic group in the United States had similar health outcomes.

Methods

Using the same data as the Urban Institute’s study, the Joint Center researchers took a different–and, dare I say, more sophisticated–approach using 2003-2006 MEPS data.

Direct medical costs

To predict adult health expenditures, the researchers also created a regression model including a variety of demographic, socioeconomic, location, and health status variables. On top of the health status and the chronic diseases examined by Waidmann, the researchers included self-reported mental health status and a few other factors you can read about in the report. Two separate models–one for each of the aims described above–were calculated for each year between 2003 and 2006.

To figure out the cost estimates after eliminating disparities, the Joint Center researchers don’t use non-Hispanic whites as the default comparison, and instead determine the best health profile for each health status/condition measure (in most cases, Asians had the best health profile) and simulates health care expenditures when, essentially,  everyone has the best health profile they could possibly have (i.e., a health profile based on that of that of the racial group with the best health profile for a particular health problem).

Indirect medical costs

To determine the costs of health disparities to society, the researchers used demographic, socioeconomic, geographic (census region and urban-rural residence), and health status measures to model days of work lost because of disability . With a little econometric magic to account for self-selection, and after again simulating health expenditures when whites, blacks, Hispanics, and Asians have the best health profile possible for each health status and condition, the researchers are able to compare predictions for the original sample (in which health disparities exist) to the simulated sample (in which we acheive miraculous equity).

The cost of premature death

Yeah, Urban Institute, what about premature death?

The Join Center researchers use National Vital Statistics Reports to cull the number of deaths and the crude death rate by age and race, and then estimate excess deaths related to health disparities. Actual deaths were then compared to the predicted number of deaths if the mortality rate equaled that of Asians–typically the group with the lowest mortality rates by age. In calculating the value of years of life lost, each year was valued at $50,000 (though they note that recent studies have valued “quality-adjusted life years” or QALYs at $95,000 to $264,000).

Findings

Eliminating health disparities for minorities would have reduced direct medical care expenditures by $229.4 billion for the years 2003-2006. More than 59% of these excess expenditures were attributable to African Americans, who have the worst health profile among the racial/ethnic groups.

More than 30 percent of direct medical costs faced by African Americans, Hispanics, and Asian Americans were excess costs due to health inequities – more than $230 billion over a four year period. And when you add the indirect costs of these inequities over the same period, the tab comes to $1.24 trillion.

About 95% of the indirect costs of health inequalities ($957.5 billion) were due to the costs of premature deaths, while the remaining $50.3 billion resulted from illness. African Americans accounted for $782.8 billion, or more than 77% of all indirect costs attributable to health inequalities.

Discussion

Holy crap. U.S. health care disparities between 2003-2006 cost the equivalent of India’s GDP in 2008.  Clearly, bridging health disparities is not just a noble side-effect of health reform, but a sensible driver. As Thomas A. LaVeist, director of the Hopkins Center for Health Disparities Solutions and the report’s author notes,

“What we are arguing in this report is if you want to get a handle on health care costs and quality and ensuring that the U.S. has a healthcare system that is worthy of this nation, you need to account for disparities. And the economic effect of the disparities alone could likely pay for the care for those who don’t have access now.”

Things I found:
Addressing Racial and Ethnic Health CareDisparities (Joint Center for Political and Economic Studies)

A range of policy strategies are available to federal, state and local governments, but it is important to recognize that no single policy – such as expanding access to health insurance – will fully address health care inequality. Health care disparities are complex and are rooted in many causal factors that span across a range of levels – including institutional, governmental and individual levels. It is therefore important to identify, implement and evaluate multi-level strategies addressing health care financing, systems and workforce development.

Fast Fact: Racial health disparities cost the country $50 billion annually (The National Council for Research on Women)

According to a study released this morning by theJoint Center for Political and Economic Studies,racial health disparities are costing the U.S. $50 billion each year. If you’re anything like me, your jaw just hit the floor. At the health reform briefing held this morning at the National Press Club to honor the launch of this study, speakers such as Secretary Sebelius, Majority Whip Clyburn, and researchers from John Hopkins and the University of Maryland discussed the moral and economic imperative of health equity.

Man…institutionalized racism is expensive.

Institutionalized racism is expensive

I’ve never seen the phrase “health disparities” twittered so furiously as it was when connected to “will cost the health care system $23.9 billion dollars.”

Couldn’t type “health disparities” into a search tool for the last two weeks without encountering both the Urban Institute’s and the The Joint Center for Political and Economic Studies’ investigations of how much it’s costing everyone to ignore health disparities.

It seems the Urban Institute and the Joint Center come up with pretty different estimates ($23.9 vs. $229.4 billion) of how much tax revenue is used to systematically undermine my health and wellness.

Estimating the Cost of Racial and Ethnic Health Disparities (Timothy Waidmann, 2009)

Aims

1) To make a “business case” for reducing health disparities by quantifying the economic costs of excess disease burden (to the health care system as a whole and to the Medicare and Medicaid programs, in particular).

2) To capture health disparities in conditions we can prevent and manage (e.g., heart disease, diabetes, hypertension, stroke and renal disease).

Methods

Waidmann analyzed 2003-2005 Medical Expenditure Panel Survey (MEPS) http://www.meps.ahrq.gov/mepsweb/ survey data, using a fairly typical multi-step process to come up with a regression model, simplified below.

Step 1: Spending = Disease prevalence * Age

This basic model was repeated for Medicare, Medicaid, and out-of-pocket spending.

Waidmann controlled for age, sex, insurance coverage, education, and income as alternate explanations for variations in spending. Where race is concerned, we know something ridiculous is going on from the outset. The differentials in age distributions by race. As you can see, things take a turn for the worse between 40 and 50 years-old, which corresponds to theories about key etiologic periods of disease and the cumulative effects of health risks across the life-span.

Given this evidence and since older people tend to have more spending money than younger people, the researchers also

Not. Pleased.

I’d never seen the phrase “health disparities” tweeted so furiously as when connected to the phrase “will cost the health care system $23.9 billion dollars.”

Both the Urban Institute and the Joint Center for Political and Economic Studies recently published investigations of how much it’s costing everyone to ignore health disparities. Working separately, the organizations have come up with different estimates of how much public money is used to systematically undermine my health and wellness.

An Urban Institute 2009 estimate of $23.9 billion is often quoted in the media. Joint Center representatives have quoted $50 billion in annual excess costs.

Estimating the Cost of Racial and Ethnic Health Disparities (Waidmann T., 2009: The Urban Institute)

Study goals

1) To make a “business case” for reducing health disparities by quantifying the economic costs of excess disease burden (to the health care system as a whole and to Medicare and Medicaid programs, in particular).

2) To capture health disparities in conditions we can prevent and manage (i.e., heart disease, diabetes, hypertension, stroke and renal disease).

Methods

Waidmann analyzed data from the 2003-2005 Medical Expenditure Panel Survey (MEPS) (to calculate the share of total costs by program and race/ethnicity), the Current Population Survey (to make state-level analysis possible), and the National Health Expenditure (NHE) (as a baseline for national estimates) to create projections. He used a seemingly straightforward regression analysis procedure, modeling Medicaid, Medicare, private insurance, and out-of-pocket spending by individuals, controlling for age, sex, insurance coverage, education, and income.

Waidmann's calculations from 2002-2005 MEPS survey. Things take a turn for the worse between 40 and 50 years-old, corresponding to theories about key etiologic periods of chronic disease (e.g., heart disease, hypertension) and the cumulative effects of health risk across the life-span.

As you can see in the “Age Distributions by Race” figure, something strange is going on. Given evidence of this strangeness (not to mention that a) older people tend to have more money to spend on health care than younger people; b) chronic disease treatment may get more expensive as people age, especially if these diseases aren’t being managed properly in the first place), Waidmann calculates the total cost effect of disease prevalence disparities by using age specific cost estimates for each disease. When calculating disease prevalence disparities, Waidmann seems to use non-Hispanic whites as the benchmark, since he estimates only the change in expenditures if African American and Hispanic age-specific expenditures are compared that of non-Hispanic whites.

Findings

In 2009, disparities among African Americans, Hispanics, and non-Hispanic whites will cost the health care system $23.9 billion dollars. Medicare alone will spend an extra $15.6 billion while private insurers will incur $5.1 billion in additional costs due to elevated rates of chronic illness among African Americans and Hispanics.

Over 10 years, the combined cost to all four sources of payment analyzed is estimated at $337 billion. The cost to the Medicare program of the two groups’ disparities is approximately $220 billion. The state and federal cost to the Medicaid programs is a more modest $27 billion, while private insurers and individuals are estimated to pay more than $90 billion over the period because of disparities in these conditions.

Thoughts…

…on what it means to me:

Health disparities are too expensive to ignore.

Acknowledging that the moral argument for bridging health disparities is compelling and right, the economic justification seems a mighty motivator for those struggling to identify with the less fortunate. Private insurers, in particular, should be paying attention–particularly since these cost estimates seem a little conservative. Unlike the Joint Center’s analysis, Waidmann looks only at direct medical costs associated with prevalence disparities in a few chronic, somatic diseases among “Hispanics” and “African Americans” compared to non-Hispanic Whites. As we learn from the Join Center’s analysis, there are a variety of other health status disparities, disparities in premature mortality exact significant costs and…Asians are people too.

Still, $337 billion is a pretty large sum–a little over Argentina’s GDP in 2008.

…on the research:

By excluding Asians, the Urban Institute study doesn’t have to deal with the tricky issue of, “which racial group is the healthiest and, therefore, the standard against which we should measure health disparities among other groups” (the Joint Center analysis finds Asians have the best health profiles for some conditions/health statuses, which complicates things for a secondary data analyst). In this study, Whites are healthiest and the evidence supports using Whites as a standard for comparison. From a theoretical perspective, I think this approach somehow incorporates racial discrimination as it is commonly understood and presented in the U.S (I’m not saying this understanding and presentation is right).

What about between-”marginalized group” comparisons?

I wonder about the potential for “between-’marginalized group’” comparisons since reality–and common decency–precludes us from sweeping all Black and Brown people under the same umbrella and stamping “Minority” on their foreheads.

Which brings me to this question:  Does the Urban Institute study conflate race and ethnicity? If so, is that okay, since this is data comes to us as a policy brief and since this is how the lay-public understands race and ethnicity (as suggested by this post)? Waidmann writes “race/ethnicity” several times in the brief, but the use of “Hispanics” and “African Americans” actually implies self-identified ethnicity (assuming only U.S. citizens and residents access Medicare and Medicaid).

Further, the MEPS data collectors seem to use “Black” as the racial category that Waidmann tags as “African American.” From 2002 onwards, MEPS collected data according to the Office of Management and Budget’s 1997 standards for collecting racial and ethnic data, meaning that self-identified Hispanics may belong to more than one race (which might be one reason MEPS uses “Black” and not “African American,” since it carries a different meaning).

That discrepancy suggests “Hispanic” actually measures a cultural affiliation and that the African American and Hispanic categories, as conceptualized in the Urban Institute study, may actually overlap. I guess this highlights the silliness of measuring race, but it also complicates meanings derived from comparisons to non-Hispanic whites and between marginalized groups.

It’s hard to say for sure because the study doesn’t include much information about how race and ethnicity is conceptualized (it’s not a peer-reviewed exercise, afterall).

What might we learn about from rigorous comparisons of non-Hispanic Blacks and Hispanics? What costs are associated with disease prevalence differences between non-Hispanic Blacks, non-Hispanic Whites and Hispanics? What might these costs mean to policy-makers and political strategists?

Next (and I mean it, I’ve got the post almost ready to go): The Economic Burden of Health Inequalities in the United States (LaVeist T.A., Gaskin D.J., & Richard P., 2009: Joint Center for Political and Economic Studies)

Things I found:

Overweight and Obesity: At a Glance (Surgeon General)

In men, Mexican Americans have a higher prevalence of overweight and obesity than non-Hispanic whites or non-Hispanic blacks. The prevalence of overweight and obesity in non-Hispanic white men is greater than in non-Hispanic black men.

Mexican American boys tend to have a higher prevalence of overweight than non-Hispanic black or non-Hispanic white boys.