The Economic Imperative of Health Equity

10 Jun 2014 |
The Economic Imperative of Health Equity

The damage that health inequity -- differences in the quality of health care, access to health care services, and structural barriers that impeded the overall health of communities across racial and ethnic groups -- are well documented. The health of a community is determined by access to services, as well as series of factors including the economic, social, and physical environment.

While the damage to people’s heath is well documented, less understood is the economic consequences of health inequity, particularly among men. A recent study from researchers at Johns Hopkins analyzed the data and found that inequity imposes huge costs on men of color. The study analyzed data from the Medical Expenditure Panel Survey and the National Vital Statistics to quantify the economic consequences of health disparities and found that the cost to African American and Hispanic men was billions of dollars.

African American and Hispanic men pay hundreds of billions of dollars more than white men due to health inequities, both in direct costs and indirect costs. The study found that the total direct medical care expenditures for African American men were $447.6 billion, of which $24.2 billion was excess medical care expenditures. Direct medical expenditures include costs of all type of patient care, prescription drugs, and other services. Direct costs also included out of pocket payments to health care providers but did not include health insurance premiums. The excess medical care expenditures are costs that African American men had to pay due to health inequities. In other words, the factors listed above that cause health inequities cost African American men over $24 billion between 2006-2009.

Adding to these costs, African American and Hispanic men incurred $317.6 and $115.0 billion respectively in indirect costs from health disparities. Indirect costs included loss of productivity and the cost of premature death due to poor health outcomes. The loss of productivity calculation included the number of missed days and hours from work and reduced wages associated with the racial/ethnic differences in health conditions.  

The study concludes that improving the health outcomes of men of color is not just a moral imperative, but also critical for economic growth, particularly given the changing age and racial demographics within our country. As the population of people of color and people over 65 both grow, health inequities will contribute significantly to rising health care costs. Eliminating these inequities is essential for the economic health of communities and our overall economy. Resources on ways to promote health equity can be found here.