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Background
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IN THIS SECTION
The Context and Case for Change
The Economic Case for Change
The Context and Case for Change
The Economic Case for Change
The Context and Case for Change
There are many ways to try to convince the public, policymakers, and professionals that a new approach is needed to address health inequities. One can make an ethical case for change by highlighting the social justice argument to support population based strategies. A practical case for change can be made using health statistics to argue that the current approach is not working and an alternative approach grounded in conceptual or evidence-based rational can be offered, as highlighted by the shift in focus of Healthy People 2020 towards the social determinants of health. One can also make an economic case for change by pointing out that our current system is unsustainable and inefficient.
The ethical, practical, and economic perspectives are evident in the implications of a 2011 study which estimated the total number of deaths in the United States that could be attributable to social factors. Researchers (Galea et al., 2011) found that in the year 2000 alone:
The ethical, practical, and economic perspectives are evident in the implications of a 2011 study which estimated the total number of deaths in the United States that could be attributable to social factors. Researchers (Galea et al., 2011) found that in the year 2000 alone:
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"Social justice can be cost effective.” |
A brief overview of the economic burden of health inequity is summarized in the drop-down box below.
The Economic Case for Change
Health care spending in the United States has been described as excessive and unsustainable. The U.S. leads the world in per capita health care spending at almost twice the average of other wealthy developed countries. However, the health outcomes in the U.S. are relatively poor in comparison. Health care spending in the U.S. has generally grown faster than that in most other countries and, for several decades, has consumed a greater share of gross domestic product than other countries.
There is growing evidence that poor quality environments and unmet social needs have a negative impact on health care spending. This is not surprising, given the relation between social conditions and health. For instance, if poor quality housing contributes to increased rates of lead poisoning, asthma, and other respiratory conditions (Krieger & Higgins, 2002), it follows that spending to treat those conditions is higher in areas with poor housing than in areas with higher quality housing. While this makes sense intuitively, the tools to effectively measure the economic burden of social inequities in health have
only recently become available.
In 2009, researchers LaVeist, Gaskin, and Richard conducted an analysis of the economic burden of racial inequalities in health. They estimated that eliminating health disparities would have reduced direct medical care expenditures by approximately $230 billion between 2003 and 2006. Furthermore, indirect costs - such as lost productivity - associated with illness and premature death were estimated to be more than $1 trillion for the same time period. Combined, this equates to $309.3 billion lost annually from the United States’ economy due to health disparities. The authors of the study emphasize the ethical case for change, and offer this economic analysis as additional support for action. They conclude that “social justice can be cost effective” (LaVeist, Gaskin, and Richard, 2009, p. 235).
While aggregate health care spending hurts the overall economy and draws resources from other policy priorities, rising health care costs also burden private businesses. According to one report, businesses in the U.S. spent a staggering $496 billion on health care services and supplies in 2006 alone. At the same time, employees who do not receive adequate health care have higher rates of absenteeism and lower rates of productivity, which negatively impacts the bottom line. One study found that indirect costs associated with unscheduled absences and productivity losses associated with family and personal health problems costs U.S. employers $225.8 billion annually (Stewart, Ricci, Chee, & Morganstein, 2003).
There is growing evidence that poor quality environments and unmet social needs have a negative impact on health care spending. This is not surprising, given the relation between social conditions and health. For instance, if poor quality housing contributes to increased rates of lead poisoning, asthma, and other respiratory conditions (Krieger & Higgins, 2002), it follows that spending to treat those conditions is higher in areas with poor housing than in areas with higher quality housing. While this makes sense intuitively, the tools to effectively measure the economic burden of social inequities in health have
only recently become available.
In 2009, researchers LaVeist, Gaskin, and Richard conducted an analysis of the economic burden of racial inequalities in health. They estimated that eliminating health disparities would have reduced direct medical care expenditures by approximately $230 billion between 2003 and 2006. Furthermore, indirect costs - such as lost productivity - associated with illness and premature death were estimated to be more than $1 trillion for the same time period. Combined, this equates to $309.3 billion lost annually from the United States’ economy due to health disparities. The authors of the study emphasize the ethical case for change, and offer this economic analysis as additional support for action. They conclude that “social justice can be cost effective” (LaVeist, Gaskin, and Richard, 2009, p. 235).
While aggregate health care spending hurts the overall economy and draws resources from other policy priorities, rising health care costs also burden private businesses. According to one report, businesses in the U.S. spent a staggering $496 billion on health care services and supplies in 2006 alone. At the same time, employees who do not receive adequate health care have higher rates of absenteeism and lower rates of productivity, which negatively impacts the bottom line. One study found that indirect costs associated with unscheduled absences and productivity losses associated with family and personal health problems costs U.S. employers $225.8 billion annually (Stewart, Ricci, Chee, & Morganstein, 2003).
