
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.




