The total economic burden of health disparities faced by racial and ethnic minorities, and individuals with low educational attainment, is well over $1 trillion, according to an NIH-funded study.
 
Health disparities were defined as medical care costs, lost labor market productivity, and premature deaths.
 
In 2018, racial and ethnic health disparities cost the U.S. economy $451 billion, a 41% increase from the previous estimate of $320 billion in 2014. The study also finds that the total burden of education-related health disparities for persons with less than a college degree in 2018 reached $978 billion, which is about twice the annual growth rate of the U.S. economy that year.
 
This study was the first to estimate total economic burden of health disparities for five racial and ethnic minority groups nationally and for all 50 states and the District of Columbia using a health equity approach. The health equity approach establishes a single standard which can be applied to each nation and state, derived from the federal Healthy People 2030 goals.
 
The study is also the first of its kind to estimate the economic burden of health disparities by education level as a marker of socioeconomic status.
 
“The exorbitant cost of health disparities is diminishing U.S. economic potential. We have a clear call to action to address social and structural factors that negatively impact not only population health, but also economic growth,” said NIMHD Director Eliseo J. Pérez-Stable, MD.
 
Racial and Ethnic Minority Groups
 
Black/African American populations bore 69% of the economic burden due to premature mortality. Native Hawaiian/ Pacific Islander ($23,225) and American Indian/Alaska Native ($12,351) populations had the highest economic burden per person.
 
Black/African American, Native Hawaiian/Pacific Islander, and American Indian/Alaska Native populations derived most of their economic burden from premature deaths, at rates of 77%, 90%, and 74%, respectively.
 
Asian (55%) and Hispanic/Latino (43%) populations derived most of the economic burden from excess medical care costs and lost labor market productivity.
 
States with the highest burden of racial and ethnic health inequities were among the most populous and diverse states. These were Texas ($41 billion), California ($40 billion), Illinois ($29 billion), Florida ($27 billion), and Georgia ($21 billion). Black/African American people had the highest economic burden of racial and ethnic health inequities in most states (33), followed by Hispanic/Latino (nine states), American Indian/Alaska Native (eight states), and Native Hawaiian/Pacific Islander (one state) individuals. The burden of racial and ethnic health disparities relative to each state’s GDP varied from 0.14% (Vermont) to 8.89% (Mississippi). Seventeen states had a burden higher than the annual growth rate of the U.S. economy in 2018.
 
Education
 
Adults with a high school diploma had the highest burden (9,982), followed closely by adults with less than a high school diploma (9,467) and then adults with some college (2,028).
 
Although most of the burden was borne by adults with a high school diploma/GED (61%), a disproportionate share was borne by adults with less education – they were only nine percent of the population but bore 26% of the burden.
 
Most of the education-related health burden was caused by premature deaths (66%) followed by lost labor market productivity (18%) and excess medical care costs (16%).
 
Per person, the economic burden of health disparities varied substantially across states by educational levels. For adults with less than a high school diploma, the burden ranged from $3,152 (California) to $21,372 (Kentucky). For adults with a high school diploma, it ranged from $6,201 (West Virginia) to $25,555 (South Carolina), and for adults with some college, it ranged from $1,072 (Illinois) to $8,374 (South Carolina).
 
In 31 states, adults with less than a high school diploma/GED had the highest economic burden of education-related health inequities. In 20 states, the burden was greatest among adults with a high school diploma/GED. Adults with some college had the lowest burden of education-related health inequities in all 50 states and the District of Columbia.
 
The burden of education-related health inequities relative to each state’s GDP varied from 1.90% (District of Columbia) to 18.29% (South Carolina).  Forty-six states had a burden higher than the annual growth rate of the U.S. economy in 2018. 
 
“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,” said lead author Thomas LaVeist, Ph.D., dean of Tulane University School of Public Health and Tropical Medicine. “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.”
 
Researchers collected and analyzed data from four databases to estimate the burden of racial and ethnic and education-related health inequities: 2016-2019 Medical Expenditure Panel Survey, 2016-2019 Behavioral Risk Factor Surveillance System, 2016-2018 National Vital Statistics System, and 2018 American Community Survey. Specifically, estimates were produced using medical care costs, lost labor market productivity, and premature deaths for Asian, AI/AN, Black/African American, Hispanic/Latino, and NHPI populations.
 
Based on the findings, the researchers called for investments to address structural contributors related to inequities on both a racial and socioeconomic basis. The state-level findings may also help to inform the decisions of federal and state health policymakers, the researchers noted.