Health inequity causes lost productivity and growth---costs and human capital loss.

Wealth and its relationship to health has long been understood and relearned over the past few centuries. In the United States, increasing wealth is associated with better health. Both income (earnings and other money acquired each year) and wealth (net worth and assets) are associated with better health and less likelihood of disease and premature death.7,8 Conversely, US counties that experienced high degrees of economic shock from globalization and exogenous trade in the 2000s saw declines in manufacturing employment and increased mortality rates.9 More recently, in Greece, following the national economic downturn and six years of social welfare austerity, total mortality rate increased nearly three times the 2000 to 2010 rate.10 This relationship holds a gradient across the entire income level spectrum, not only when comparing the very rich to the very poor.

Connecting Health Inequities to Economics

When considering health inequities, the social determinants of health, driven by unequal distribution of health, social, and economic opportunities, have been the focus.11,12 At the individual and family level, poverty is characterized by upstream social determinants that include unfavorable social (eg, education) and economic (eg, employment) factors, inadequate public policies, unfavorable demographic trends (eg, outmigration from locations with low economic or social opportunities), and suboptimal physical and social environments.13,14 (Figure 1). Poverty leads to poor health outcomes among families, driven by economic factors such as the inability to afford medicines, medical treatment or follow-up care.15-17 Downstream determinants include distress (psychosocial factors) driven by anxiety, hostility, racism, adverse life events, aggression, and limited self-control of the local environment, leading to unfavorable biologic responses and harmful coping behaviors.13,14 These upstream and downstream drivers result in disadvantaged health characterized by excess morbidity and premature mortality. In turn, diminished health from chronic diseases, at the population level, can ultimately lead to lower economic growth, less economic opportunities and finally loop back to cause additional poor health (Figure 1).18,19 While this illustration was created to characterize developing countries, developed countries experience similar patterns.

Economic Burden of Health Inequities

Health inequities clearly impose a large, and potentially preventable, burden on the US population. Numerous measurements can be used for estimating their economic impact. For example, individuals and family households can experience losses in income due to disability and need to use household wealth to finance health care services; employers can experience lost productivity due to short or long term worker disability; health care systems can incur more health expenditures; governments lose taxes and incur excess social welfare payments; and the entire population can experience a lower gross domestic product (GDP). Several studies have quantified the economic burdens of health inequalities from different perspectives. (Table 1)

With an understanding of the strong gradient between wealth and health, examining household incomes across US racial and ethnic groups in the United States may be useful in determining whether health inequities are occurring. In 2016, the median household income was $59,000 but was $81,000 for Asians, $65,000 for Whites, $48,000 for Hispanics, and $39,000 for African Americans.13,20 Earning power is also directly related to education level. Median incomes increase from those without high school diploma ($26,500) to high school diploma ($40,500), some college ($47,700), to those with a college degree ($92,000).13,21 These figures indicate large income disparities across racial and ethnic groups and a marked income gradient by education attainment, the context where health inequities may occur. For households with <$50,000, the challenge of paying medical bills may further exacerbate health inequities.1

Another study evaluated household level catastrophic health expenditures for acute myocardial infarction (MI) and stroke in the United States among those uninsured during 2008-2012.22 Median hospital charges were $53,000 for acute MI and $31,000 for stroke. Using an indicator of household disposable income (ie, net of subsistence expenses), researchers estimated the rates of catastrophic health expenditure (ie, spending more than a threshold of 40% of the household disposable income) and found roughly 80% of those with acute MI and 75% with stroke were above this threshold, suggesting severe personal and family financial distress.

Individual economic impact can be assessed in multiple ways. In 2016, a team at Kaiser Family Foundation conducted a population survey to determine the prevalence of problems paying medical bills.15 Overall, 26% of US adults aged 18-64 years reported living in a household that had problems paying or an inability to pay their medical bills during the past year. Most respondents facing problems did not have insurance (53%) but even among those with insurance (employer-based, Medicaid, or private purchased), about 20% reported problems paying their bills. Problems paying bills was more common among households with incomes <$50,000 annually, those with poorer health status and disability, and those who were receiving care for chronic conditions. Coping mechanisms included: cutting spending on food, clothing, and education; working more hours or getting second jobs; drawing down on long-term savings accounts; borrowing money from friends or family; increasing credit card debt; and taking out a second household mortgage. In another study by the Kaiser Family Foundation among persons with health insurance, they found that difficulties with medical bills were, not surprisingly, more pronounced among the poor and near poor – approximately 40% of nonelderly adults with incomes below 200% of the federal poverty level reported problems with paying medical bills.17 Through an online survey, the American Heart Association found that 56% of adults (insurance status unknown) who had heart conditions, stroke, or hypertension, reported having trouble paying for prescription drugs or other medical care in the past year.16

At the population level, economic measures include the impact on the GDP, cost of illness studies, and the societal-based “willingness to pay” for improved quality of life and length of life. (Table 1). A recent study of the entire US population23,24 examined morbidity, mortality, and disability for populations experiencing health inequities and modelled the economic benefits based on the scenario that their health outcomes were raised to that of the healthiest reference population group (ie, Whites). Using this methodology and national data from 2002-2006, the excess health cost due to health inequities was estimated for direct medical costs (ie, the cost of care) and indirect medical costs (cost of disability and premature death) for African Americans, Asians and Hispanics. During the 4-year study period, the excess direct costs due to health inequities ranged from $54 to $61 billion annually, a total of $229 billon for the entire study period. This cost was about 30% of all the direct medical costs expended among African Americans, Asians, and Hispanics. The costs of disability and premature death ranged from $249 to $255 billion each year and totaled $1.008 trillion over the entire study period. However, these figures do not account for actual investments needed in health programs to lower the rates of disease, disability, and early death in these populations. Regardless, these figures are imposing and provide an indication of a strong economic case for reducing health inequities.

Studies on the impact of health inequities directly on the US GDP are scarce. However, a study in the European Union (EU) lends insights into the magnitude of economic burden that health inequities can impose.14,25 Using low education levels to define populations experiencing health inequities, they reported that more than 700,000 deaths per year and 33 million cases of ill health in the EU were attributable to inequities. These deaths and morbidity-related disabilities accounted for 20% of all health care costs and 15% of social security benefits. Losses in labor productivity reduced the EU GDP by 1.4% each year. The monetary value of health inequities related to human capital losses (ie, monetary value to years lived with disease compared with disability-free and avoiding premature death) was estimated at €980 billion per year or 9.4% of the GDP. Thus, both of these measures are insightful. The direct GDP impact was modest while the loss in human capital was substantial.