Study Finds Racial Inequalities Cost U.S. Health System Over $50 Billion a Year

Racial inequalities in health care access and quality added more than $50 billion a year in direct U.S. health care costs over a four-year period according to a study released today by the Joint Center for Political and Economic Studies.

As stated in the press release from the Joint Center,

In this study, researchers at Johns Hopkins and the University of Maryland found that over 30 percent of direct medical expenditures for African Americans, Asian Americans and Hispanics were excess costs linked to health inequalities. Between 2003 and 2006, these excess costs were $229.4 billion.

Further, the researchers estimated that the indirect costs of racial inequalities associated with illness and premature death amounted to more than a trillion dollars over the same time period. Eliminating these inequalities would have saved the U.S. economy a grand total of $1.24 trillion dollars. The study noted that this four-year $1.24 trillion expenditure is more than the annual gross domestic product of India, the world’s 12th largest economy.

Previous studies have established that minority Americans experience poorer than average health outcomes from cradle to grave. People of color are significantly more likely to die as infants, have higher rates of chronic disease and disability, and shorter life spans.

The costs measured in the Joint Center study include those directly associated with providing care to a sicker and more disadvantaged population, as well as such indirect costs such as lost productivity, lost wages, absenteeism, use of family leave for avoidable illnesses and lower quality of life. In addition, the study measured the costs of premature death in the form of forgone wages, lost tax revenues, additional services and benefits for the families of the deceased and lower quality of life for survivors.

The study is available for download from the Joint Center site.

A related article on the nature and causes of racial disparities in health care from the Washington Post, Studies Look for Reasons Behind Racial Disparities in Health Care, provides some insight on this problem:

Racial minorities are less likely to undergo major surgeries at the hospitals where those operations are done best, and black patients at Medicare HMOs fare worse than whites on several health measures regardless of plan quality, according to studies being released today.

The two studies in today’s issue of the Journal of the American Medical Association, plus a third showing that black women are less likely than their white counterparts to survive breast cancer, add to the voluminous evidence that the U.S. health-care system works differently for minorities than for whites despite years of efforts to erase racial disparities.

Studies have demonstrated that blacks and other minorities are far less likely than whites to receive many types of care, such as appendectomies, heart bypass surgery, or basic tests and drugs for heart disease and diabetes. Minorities on average are more prone to illness, have more complications and recover more slowly. They also are more likely to die from their illnesses, and to die younger.

But while the persistent disparities are well-documented, the causes remain the focus of research and debate. One explanation is that minorities tend to be poorer and less educated, with less access to care. And they tend to live in places where doctors and hospitals provide lower quality care than elsewhere. Others suspect cultural or biological differences play a role, and there is a long-running debate about whether subtle racism infects the health-care system.

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