Economic Burden of Health Inequities: 5 Insights to Inform Action

The economic burden of racial and ethnic health inequities in the United States was $451 billion, or $1,337 per person, in 2018, according to an analysis of national datasets. For education-related health inequities, the burden was $978 billion, or $2,988 per person.

These findings were shared through a recently released study by the National Institutes of Health. Costs were determined by examining increased spending on medical care, lower labor market productivity, and premature deaths as people experience high levels of poor health, disease, and disability.

“The exorbitant cost of health disparities is diminishing U.S. economic potential," said Eliseo J. Pérez-Stable, M.D., Director of the National Institute on Minority Health and Health Disparities. "We have a clear call to action to address social and structural factors that negatively impact not only population health, but also economic growth.”

Mid-Iowa Health Foundation believes this report offers a critical understanding of the significant economic impact of unaddressed health disparities, and why we must target efforts on addressing the social determinants of health.
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Here are five insights we gleaned from reviewing the study:

1. Using a health equity – versus a health disparity – perspective focuses on societal aspirations for well-being.

Researchers chose to determine economic burden through a health equity perspective, looking at the gap between current health status and the Healthy People 2030 national health goals. This calculation was made instead of a health disparity perspective that would have examined the gap in health status between the White population and other populations. The intentional decision to not compare differences between groups means that the focus of the study is on the overall health standards set for the nation and does not assume that the health of the White population is at the optimal health outcome level.

2. Populations were selected based on challenges across the social determinants of health.

The study focused on populations that are disadvantaged socially, economically, and politically, facing challenges in areas, such as health care delivery, public health, employment, education, transportation, and public safety. The County Health Rankings Model describes how these factors significantly influence health outcomes.

The NIH study looked at the economic burden for five racial and ethnic groups – American Indian or Alaska Native; Asian; Black or African American; Hispanic or Latino; and Native Hawaiian or Other Pacific Islander – as well as three education groups – adults with less than a high school education; those with a high school degree or equivalency credit; and those with some college or an associate degree.

Researchers also examined groups considered to be advantaged – White population and 4-year, college-educated population – to provide context. The findings among groups illustrate that while life expectancy over the past century has increased across the entire population, not all populations have experienced the same level of positive health outcomes.

3. Black Americans experience the greatest economic burden among racial and ethnic groups.

The overall economic burden of failing to achieve health equity goals was $609 billion for the White population. However, racial and ethnic groups’ share of the economic burden was disproportionately greater, except for the Asian population. The Black or African American population experienced the greatest share of economic burden – $310 billion, or 69% of the total burden – among the five racial and ethnic populations. The economic burden is largely attributable to premature death, defined as death that may be preventable through lifestyle modifications, better access to health care, and improvements in other economic, social, structural, and environmental factors. The Hispanic or Latino population had the next highest burden - $94 billion, or 21% of the total burden – largely attributable to excess medical care costs.

In Iowa, the American Indian population experienced the greatest economic burden per person - $11,168 – followed by Black Iowans at $9,058 and Latinos at $2,526.

4. Adults with less than a 4-year college degree experienced the greatest economic burden among education groups.

While the overall economic burden for failing to reach the nation’s health equity goals in 2018 was $976 billion for adults 25 years and older, populations with less than a 4-year college degree had the vast majority of that burden – $940 billion. Adults with a 4-year college degree had zero premature death costs, while two-thirds of the economic burden among the other three educational levels was attributable to premature death.

In Iowa, the economic burden for someone with less than a high school diploma is $9,106 per person; for someone with a high school diploma or equivalent, the burden is $9,145 per person; and for someone with some college, the burden is $1,956 per person.

5. Understanding the economic burden of health inequities is a call to action.

The findings show that health inequities are a significant drag on the economy and affect everyone.

According to the study: “The economic burden of health inequities is unacceptably high and warrants investments in policies and interventions to promote health equity for racial and ethnic minorities and adults with less than a 4-year college degree.”

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

While the costs show the importance of making societal investments to improve population health, it is in the nation’s economic interest to direct resources to specifically target reducing the burden of disease for populations experiencing the greatest disadvantages.

Access the Report

Find a summary of the findings and a the full report.