Health Inequities, Racial Health Disparities Cost US $451B

May 18, 2023 - The United States medical system’s reality of racial health disparities doesn’t come without its price; in fact, race-based health inequities have a hefty price tag of $451 billion, according to a study funded by the National Institutes of Health (NIH).

The research, published in JAMA, also placed a dollar amount on the health disparities caused by inequities in educational attainment, clocking those disparities in at $978 billion.

This study used 2018 figures, the most recent year for which the researchers had data. The data represent a 41 percent rise in the cost of racial health disparities in the US between 2014 and 2018, the researchers said in a press release.

“The exorbitant cost of health disparities is diminishing U.S. economic potential,” according to Eliseo J. Pérez-Stable, MD, the director of the NIH’s National Institute on Minority Health and Health Disparities (NIMHD). “We have a clear call to action to address social and structural factors that negatively impact not only population health, but also economic growth.”

The nationwide $451 billion cost of race-based health inequities shakes out to 2 percent of the GDP and a cost of $1,337 per person, the researchers said. Put otherwise, if all racial and ethnic groups experience equitable health outcomes, the US would save $451 billion, or $1,337 per person, annually.

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The researchers, who used data from four databases to estimate the cost of unequal health outcomes, said costs of racial health disparities are primarily due to the excess premature deaths experienced by certain racial and ethnic groups. Overall, excess premature deaths affecting different racial groups differently amounted to $293 billion, or 65 percent of the total cost of racial health disparities.

Another $81 billion came from lost labor market productivity, and $77 billion came from excess medical costs.

Moreover, they said certain demographics bore the brunt of the cost of racial health disparities more than others.

Black people, for example, carried 69 percent of the costs of racial health disparities, while Latino people carried 21 percent. American Indian/Alaska Native (AI/AN) populations bore 6 percent of the cost burden, Native Hawaiian/Pacific Islanders carried 3 percent, and Asian people bore 2 percent.

Certain states were more economically affected by racial health disparities than others; while states like Alaska, Hawaii, Louisiana, and Mississippi all saw per-person costs between $3,001 and $5,000, fourteen states had per-person costs up to $800. In other words, there are geographic differences in how intensely racial health disparities are felt.

READ MORE: What Is the Healthcare Cost of Racial Health Disparities, Inequity?

The researchers also documented an extremely high cost burden for health disparities born from inequities in educational attainment. The overall cost of education-based health disparities was $978 billion, which is 5 percent of the GDP. That breaks down to a $2,988 per-person cost burden.

Most of that cost burden is felt by folks who have a high school diploma or GED (61 percent), followed by people with less than a high school diploma (26 percent). However, the researchers pointed out that is a disproportionate burden for those with less than a high school diploma; only 9 percent of the US population falls into that category, despite them carrying a quarter of the economic burden of education-based health disparities.

People with some college education carried $128 billion of the cost burden.

And like the race-based health disparities, the researchers said these high cost burdens were driven in large part by the cost of excess premature deaths; $649 billion of the economic burden of education-based health disparities stemmed from excess premature deaths. Another $174 billion was linked back to lost labor market productivity, and $155 billion was linked to excess medical care costs.

Per-person cost burden was more equal across states when looking at education-based health disparities. There was a similar number of states falling into the highest and the lowest tiers of economic burden; nine states saw per-person costs between $4,401 and $8,500, while eight saw per-person costs up to $2,100.

It should be noted that there is a strong ethical component to understanding and addressing health disparities; many in the healthcare industry simply believe it is the right thing to do to provide equitable opportunity for all to achieve health and well-being.

However, this study also showed that there is a strong financial case to be made and lays the groundwork to prove substantial return on investment for organizations considering investments into health equity.

“The results of this study demonstrate that health inequity represents not just unfair and unequal health outcomes, but it also has a significant financial cost,” Thomas LaVeist, PhD, dean of Tulane University School of Public Health and Tropical Medicine and the study’s lead author, said in a press release. “While it surely will cost to address health inequities, there are also substantial costs associated with not addressing them. Health inequities is a social justice issue, but it is also an economic issue.”