How much do health differences actually cost?

Health injustices in the United States currently cost $ 320 billion a year and could rise to $ 1 trillion by 2040 as the population becomes less white, per capita spending increases, and Medicaid enrollment increases, according to a new report. of consulting giant Deloitte.

The findings serve as a reminder to stakeholders that if they do not take action to correct health inequalities in a health system that already requires serious human casualties, they will also lose money.

“This should be a call to action for organizations so far,” said Andy Davis, FSA, MAAA, Deloitte’s chief actuary, who advises hospitals, healthcare systems and pharmaceutical companies, among other clients from a variety of industries. MedPage today.

To calculate how much health inequalities cost now and to extrapolate their financial damage in the future, the company focuses on differences in health outcomes that arise due to gender, race, or socioeconomic status of patients in multiple populations affected by inequalities in different disease states. .

For example, black adults are 60% more likely to be diagnosed with diabetes than white adults, and two to three times more likely to develop complications such as amputation and end-stage kidney disease. The researchers found that 4.8% of the cost of diabetes was related to this particular discrepancy, leading to $ 15 billion in unnecessary costs.

The researchers also conducted literature reviews among studies with data on differences in different populations to understand indicators of additional disease states, such as asthma, heart disease, breast cancer and colorectal cancer.

Although there are inequalities other than gender, race and class, such as age and ability, Deloitte actuaries have focused on the most thoroughly documented issues. They also took into account the effect of crossing inequalities – for example, a low-income Spanish woman may face biases that are complicated by race, class, and gender in the health system.

According to the report, actuaries were conservative in their estimates of costs. In fact, the cost of inaction on health care injustices can be much higher, as actuaries cannot account for how each disease can affect another and affect health care costs.

While “mathematical modeling allows us to get very close” to accurately calculating these costs, “the problem is likely to be worse than the model predicts,” said Leslie Rennis, MPH, EdD, an associate professor at CUNY’s Borough of Manhattan. Community College and public health research and evaluation expert.

However, “the analysis does an excellent job of identifying the ways in which differences in access to healthcare and treatment affect costs,” she added.

Kelan Baker, Ph.D., executive director and chief education officer at the Whitman-Walker Institute, who researches and advocates for health equity with a focus on LGBTQ + health, also said Deloitte’s assessments appear conservative, although doubts that they can be calculated accurately at all.

The real cost of health disparities “is probably much higher than any estimate, due to the complex and interrelated factors that affect health, many of which are outside the realm of health itself,” he explained.

Deloitte also did not take into account the social determinants of health, such as housing, education, food and the physical environment, which have a huge impact on health outcomes and costs.

Rennis pointed out that the main social determinants of health are economic disparities: “Without addressing poverty and what it does for the health and well-being of those who live in it, we will never be able to fully address health inequalities or their potential costs to society. “

Doing the right thing for those not served by the health care system is not always enough for the big businesses that form its backbone, the report said. “With health insurance organizations, and we see that in health systems and even biopharmaceutical life science organizations, the right thing to do isn’t always the easiest choice because it’s hard to see where the return is coming from,” Davis said.

Although the report does not offer detailed recommendations for policies or systems to improve health equity, actuaries suggested that stakeholders take equity into account in all business decisions, promote cross-sectoral partnerships, address the social determinants of health and build a more inclusive workforce, among other strategies.

We hope to move from “this is not just the right thing to” having a “business imperative behind us,” Davis said.

  • Sophie Putka is an entrepreneur and investigative writer for MedPage Today. Her work has appeared in the Wall Street Journal, Discover, Business Insider, Inverse, Cannabis Wire and others. She joined MedPage Today in August 2021. I follow

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