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Introduction
United States is spending a huge amount of money on health care. In the year 2010, health care spending, in the U.S., accounted for about 17.9% of the country’s GDP, i.e. approximately $2.6 trillion. Still the country is facing increased health care costs, and several drivers are thought to have a role in increasing the cost of health care. Among the important contributors of increasing health care costs are easy availability of the latest technology that is costly in many cases, chronic disease conditions, administrative expenses of hospitals and health care institutions, mandated insurance benefits, lifestyle including addictions and/or obesity, increase in the aging population, end-of-life care, pharmaceuticals and defensive medicines, and, last but not the least, health disparities (Norbeck, 2012).
Health disparity as a driver of healthcare cost
Health Disparity
According to the Department of Health and Human Services, health disparities are considered as differences in the health outcomes that are usually linked to socioeconomic as well as environmental disadvantage. Healthy People 2020 states that health disparities are adversely affecting the people from different races, ethnicities, socioeconomic status, gender, mental health and age, thereby affecting the health care services and cost (Heiman & Artiga, 2015).
Centers for Disease Control and Prevention (CDC) reported that significant inequalities and disparities in mortality, morbidity, hazardous environmental exposures, and risk behaviors are present in the population of the U.S. Usually, these disparities occur across socioeconomic as well as racial and ethnic groups. Therefore, experts are of opinion that socioeconomic as well as ethnic and racial health disparity has a substantial impact on health care utilization as well as health care spending (Norbeck, 2012).
Socioeconomic health disparities
The socioeconomic conditions of a person and his or her living and working place can influence the health of that person. Usually, educational achievements and household and family incomes are two most commonly used indicators to determine the impact of socioeconomic conditions on health. A significant proportion of the population is vulnerable to health-related problems due to insufficient resources caused by differences in socioeconomic status (Norbeck, 2012).
People of lower socioeconomic status may face more problematic situations, thereby resulting in more spending on health care as compared to economically stable people. According to the reports, the number of poor families, who is earning less than 50% of the poverty line (i.e. deep poverty), increased significantly during the recent recession in the U.S. This increasing number of poor families have several negative outcomes such as poorer health that can lead to increased costs of health care. Therefore, reduction in poverty and an increase in wealth could help in decreasing health care costs (Norbeck, 2012).
Racial and ethnic health disparities
Research shows that racial and ethnic health disparities are also affecting the health care costs. In a study, it was found that the U.S. faced about $1.24 trillion in health care costs between the years 2003 and 2006 due to racial and ethnic health disparities. The cost included $229.4 billion for direct expenditures on medical care related to health disparities and $1 trillion for the indirect costs and expenditures on disparities. According to a CDC Report, differences in the adjusted rate of avoidable hospitalizations in non-Hispanic Blacks and non-Hispanic Whites in the years from 2004 to 2007, resulted in approximately 430,000 more hospitalizations for non-Hispanic Blacks. The report showed that about $3.4 billion in health care costs could be saved at that time by removing the racial and/or ethnic health care disparities (Hanlon, Hinkle, & Healthcare Cost Utilization Project, 2011).
Analysis of measures/changes in the US Health Care System that could help in reducing costs related to health disparity
Health care costs because of health disparities can be measured (Hanlon et al., 2011):
in terms of finances or expenses on excessive health care use such as excessive hospitalization;
in terms of excessive deaths or loss of human lives, and/or
in terms of decreased or lost productivity, such as time spent away from work.
Finances or expenses of excessive health care
With the help of hospital discharge data, the number of excessive admissions among the ethnic or racial minorities or poor population could be determined. Usually, excess admissions are estimated by comparing the rates of admissions of a certain population having the highest rates of admission such as minorities or poor people to the population having the lowest rates of admission as, for example, White people. Governments or institutions will then be able to analyze the data and determine the amount of money that can be saved by helping in decreasing the rates of admission of minorities or poor people. In this regard, institutions or governments can check all the admissions and/or only admissions having particular conditions or diagnoses such as childhood asthma, diabetes, or tooth pain, for which admission rates and hospitalizations could be avoided with preventive care. Governments or institutions can also work in admissions by payer, thereby enabling them to show the costs of Medicaid and Medicare programs (Hanlon et al., 2011).
Excess deaths and/or human life lost
Human health care costs can be measured by assessing excess expenses or by assessing excess deaths by estimating the number of deaths that would not occur if a minority or poor population had the same rate as that of another population such as White population. In this regard, institutions can also use “Wide-ranging Online Data for Epidemiologic Research” (WONDER) databases of the CDC. Those databases have public health data about topics such as cancer, births, deaths, and AIDS (Hanlon et al., 2011).
Lost productivity
Governments can also work on changes in health care costs because of decreased or lost productivity. In this regard, numbers or rates of work-related illnesses or injuries by a minority or poor population that cause excess days away from work are estimated by utilizing occupational health statistics (Hanlon et al., 2011).
Concluding Remarks
Health care cost is an important issue to consider in the economy of the U.S. as it can help not only in giving a healthy life to the people but can also improve the economy by increasing the productivity of people. However, several factors are negatively affecting the U.S. health care costs, and health disparity is one of them. Health disparity may include racial and ethnic disparity as well as disparity based on economic status. It has been found that poor people face more problems of health as compared to people from the middle or upper class. Therefore, their chances of hospital admissions could also increase. Similarly, people from ethnic minorities may face disparities in health. Governments and health care institutions have to take care of these health disparities, and have to study the financial as well as human costs associated with these disparities.
References
Hanlon, C., Hinkle, L., & Healthcare Cost Utilization Project. (2011). Assessing the Costs of Racial and Ethnic Health Disparities: State Experience: Agency for Healthcare Research and Quality.
Heiman, H. J., & Artiga, S. (2015). Beyond Health Care: The Role of Social Determinants in Promoting Health and Health Equity. Health, 20, 10.
Norbeck, T. (2012). Drivers of Health Care Costs: A Physicians Foundation White Paper. The Physicians Foundation.
