Racial and Ethnic Health Inequities Led to $421B in Excess Spending

The economic burden of health inequities ranged from $421 billion to $978 billion in 2018, suggesting more resources are needed to improve health equity for racial and ethnic minorities and people with low education levels.

The JAMA study assesses the economic burden of health inequities for five racial and ethnic minority groups: American Indian or Alaska Native, Asian, Black or African American, Hispanic or Latino, and Native Hawaiian or Other Pacific Islander, and three education groups: adults with less than a high school education, those with a high school degree or general educational development (GED) credit, and those with some college or an associate degree.

These populations often face barriers to healthcare, employment, education, and transportation, leading to poor health outcomes.

Researchers used data from the Medical Expenditure Panel Survey (MEPS), state-level Behavioral Risk Factor Surveillance System (BRFSS), National Vital Statistics System (NVSS), and IPUMS American Community Survey.

The study’s health equity perspective was shaped by the health equity goals from Healthy People 2030. The economic burden of health inequities was determined by excess medical care expenditures, lost labor market productivity, and premature death.

According to MEPS data, the overall economic burden of failing to achieve the health equity goals in 2018 was $1.03 trillion, consisting of $421.1 billion for racial and ethnic minorities and $608.7 billion for the White population.

Among racial and ethnic minorities, two-thirds of the economic burden was due to premature death, 18 percent could be attributed to excess medical care costs, and 14 percent was from lost labor market productivity. Meanwhile, excess premature death contributed to more than half of the economic burden for White individuals.

BRFSS data estimated a higher economic burden of racial and ethnic health inequities of $450.8 billion, whereas the $421 billion was generated from MEPS data. The estimates were similar but differed in certain areas. The BRFSS estimated costs were higher for the Latino populations ($94.7 billion versus $56.8 billion) and Asian population ($8.4 billion versus $5.8 billion) but lower for the Native Hawaiian and Other Pacific Islander population ($12.3 billion versus $19.5 billion).

Most of the economic burden of racial and ethnic health inequities was endured by the Black population (74 percent per MEPs or 68.7 percent per BRFSS), followed by the Latino population (13.5 percent or 20.9 percent). The American Indian or Alaska Native population bore 6.5 percent or 5.8 percent, the Native Hawaiian and Other Pacific Islander population bore 4.6 percent or 2.7 percent, and the Asian population bore 1.4 percent or 1.9 percent.

Except for the Asian population, the share of economic burden for each group was significantly greater than their share of the non-White population.

Premature deaths accounted for most of the economic burden for the American Indian or Alaska Native, Black, and Native Hawaiian and Other Pacific Islander populations, while excess medical care costs were the main contributor for Asian and Latino populations.

Among adults 25 years and older, the overall economic burden for not achieving the health equity goals was $975.7 billion, according to MEPS data. This comprised $940.4 billion for adults with less than a four-year college degree and $35.3 billion for adults with a four-year college degree or more. Adults with a four-year college degree did not have any premature death costs, the study noted.

The BRFSS data put the economic burden of education-related health inequities at $978 billion. Two-thirds of the economic burden was due to premature death, 15.8 percent was attributable to excess medical care costs, and lost labor market productivity accounted for 17.8 percent.

Most of the burden of education-related health inequity was incurred by adults with a high school degree/GED, followed by adults with less than a high school education and adults with some college. Adults with less than a high school education accounted for only 9 percent of adults who did not complete a four-year college degree but bore 26.2 percent of the costs.

“The economic burden of health inequities will continue to increase if high mortality and morbidity in the growing racial and ethnic minority population and the decline in life expectancy for adults with less than a college education persist,” researchers wrote.

Policymakers must invest in programs that address health inequities, including structural and individual barriers to education and racial discrimination.

“Even a modest reduction in health inequities could potentially save the nation billions of dollars in medical spending and lost labor market productivity annually,” the study concluded.