Economics and Health Disparity in the US Department of Health Services Policy and Management Arnold School of Public Health University of South Carolina

Economics and health disparity: 1.Economic circumstances affect environment and behavior, which affect well-being 2.Economic circumstances affect health care access, which affects well-being 3.The health care financing system affects economic circumstances, which …

PHYSICIANS FOR A NATIONAL HEALTH PROGRAM 332 SOUTH MICHIGAN AVENUE SUITE 500 CHICAGO, IL TEL: (312) Some slides are courtesy of

Economics and health disparity: 1.Economic circumstances affect environment and behavior, which affect well-being 2.Economic circumstances affect health care access, which affects well-being 3.The health care financing system affects economic circumstances, which …

Causes Of Excess Deaths Among African Americans Source: Himmelstein & Woolhandler - Analysis of data from NCHS Cardiovascular 25% Cardiovascular 39%

Distribution of Wealth, 1976 & 1998

Despite Higher GDP, Most Americans Have Less Disposable Income than Canadians Source: Monthly Labor Review April, 1998 Note: Mean earnings in the U.S. were 15.5% higher than in Canada in 1995

Poverty Rates, 1997 U.S. and Other Industrialized Nations Source: Luxembourg Income Study Working Papers Note: U.S. figure for 1997, other nations most recent available year

Americans Lead the World in Hours Worked Source: International Labor Organization, 1999

Science Sep 17;305(5691): – Inflammatory exposure and historical changes in human life-spans. Finch CE, Crimmins EM. Andrus Gerontology Center and Departments of Biological Sciences and of Sociology, University of Southern California, Los Angeles, CA 90089, USA. Most explanations of the increase in life expectancy at older ages over history emphasize the importance of medical and public health factors of a particular historical period. We propose that the reduction in lifetime exposure to infectious diseases and other sources of inflammation--a cohort mechanism--has also made an important contribution to the historical decline in old-age mortality. Analysis of birth cohorts across the life-span since 1751 in Sweden reveals strong associations between early-age mortality and subsequent mortality in the same cohorts. We propose that a "cohort morbidity phenotype" represents inflammatory processes that persist from early age into adult life. –U.S. Civil War veterans who had infectious disease as young men were more likely to have heart disease after age 50. Frequent diarrhea during infancy, a sign of infection, is linked to cardiovascular disease in adulthood. Americans now in their 50s are 15% more likely to have cardiovascular disease, and twice as likely to have cancer, if they had a serious infectious disease in childhood. Men who weighed less than 5.5 pounds at birth have, on average, a 50% greater chance of dying of heart disease. Women – 23%. (Race effect? Which way?)

An aside on genetics as a residual explanation Differences not attributable to the immediate environment are attributed to genetic differences –E.g. cardiovascular disease race differences Environment effects during development and early childhood can affect adult health and the next generation (e.g. hypertension and pre-eclampsia).

Economics and health disparity: 1.Economic circumstances affect environment and behavior, which affect well-being 2.Economic circumstances affect health care access, which affects well-being 3.The health care financing system affects economic circumstances, which …

45 million uninsured, 15.6% of public, in 2003

Number Uninsured/In Poverty Source: Social Security Bul, HIAA, CPS

Who Are The Uninsured? Source: Himmelstein & Woolhandler - Tabulation from 1999 CPS *Students>18, Homemakers, Disabled, Early retirees »Employed »50% »Children »25% »Unemployed »5% »*Out of labor »force »20%

Blacks’ and Hispanics’ Full Time Jobs Provide Less Insurance Source: Commonwealth Fund, 3/2000

Are Emily and Brendan More Employable than Lakisha and Jamal?

Former Welfare Recipients: Jobs May Not Bring Coverage

Uninsured Forego Care for Serious Symptoms Source: Arch Int Med 2000; analysis of RWJ Foundation Survey Serious Sx = loss of consciousness, breast lump, chest pain > 1 minute, etc. Potentially Serious Sx = Difficulty urinating, productive cough with fever etc.

Health care foregone

Un- and underinsurance costs money and lives

Later diagnosis of cancers

Uninsured get less heart care

Uninsured get less trauma care

Uninsurance 6 th Leading Cause of Death among persons under 65 Pages/Consequences+of+Uninsurancehttp:// Pages/Consequences+of+Uninsurance Primary prevention and screening Cancer care Chronic disease care: diabetes, cardiovascular disease, end-stage renal disease, HIV, mental illness

Uninsurance as Cause of Death continued Acute care for cardiovascular disease, trauma “ Surprisingly, provider response to traumatic injury can be influenced by insurance status. Uninsured trauma victims are less likely to be admitted to a hospital, receive fewer services when admitted, and are more likely to die than are insured trauma victims. ”

Patients Refused Authorization for ER Care 8% to 12% of HMO patients presenting to 2 ERs were denied authorization Authorization delayed care by 20 to 150 minutes One HMO member’s story: Refused at private hospital ER because didn’t have insurance card Admitted to public hospital Then, the HMO insisted on transfer to the private hospital

Patients Refused Authorization for ER Care Of those denied: 47% had unstable vital signs or other high risk indicators 40% of children were not seen in f/u by primary MD Eventual diagnoses included: meningococcemia (2), ruptured ectopic (2),shock due to hemorrhage (2), septic hip, PE, MI (2), ruptured AAA, pancreatitis, peritonsillar abscess, small bowel obstruction, unstable angina, pneumothorax, appendicitis, meningitis(3)

Sick HMO Patients: Barriers to Care Source: Consumer Reports 7/2000:41 - based on survey of 52,000 readers

Tradeoff Savings for Outcome: HMOs Push Heart Surgery Patients to High-Mortality Hospitals Source: JAMA 2000; 283:1976 *CABG = coronary artery bypass graft surgery »45% »49% »59% »64% »0% »20% »40% »60% »Private »FFS »Medicare »FFS »Private »HMO »Medicare »HMO »% of CABG* Patients Using High- »Mortality Hospitals

Milliman & Robertson Pediatric Length of Stay Guidelines 1 Day for Diabetic Coma 2 Days for Osteomyelitis 3 Days for Bacterial Meningitis “They're outrageous. They’re dangerous. Kids could die because of these guidelines.” Thomas Cleary, M.D. Prof. of Pediatrics, U. Texas, Houston Listed as "Contributing Author" in M&R manual Source: Modern Healthcare May 8, 2000:34

Milliman & Robertson “We do not base our guidelines on any randomized clinical trials or other controlled studies, nor do we study outcomes before sharing the evidence of most efficient practices with colleagues.” Wall Street Journal 7/1/98

Racial Disparity in Access to Kidney Transplants

Pharmacies in Minority Neighborhoods Fail to Stock Opioids Source: N Engl J Med 2000; 242:1023

Minority Physicians Provide More Care for the Disadvantaged Source: AJPH 1997;87:817 Ethnicity of Physician

Economics and health disparity: 1.Economic circumstances affect environment and behavior, which affect well-being 2.Economic circumstances affect health care access, which affects well-being 3.The health care financing system affects economic circumstances, which …

$5440 per person

Health Spending, 1990 & 1998: U.S. Costs Rose More Than Other Nations’ Source: Health Affairs 2000; 19(3):150

Elderly as Percent of Total Population, 2000 Source: Health Affairs 2000; 19(3):192

Risky People Charged More

Firms Shift Health Insurance Costs to Workers Source: Int J Health Serv 1999;29:498

Rising Out-of-Pocket Costs for Seniors Voucher/Premium Support Proposals Would Worsen Source: Senate Select Committee on Aging; AARP 4/95 & 3/98; and Commonwealth Fund May, 1999 projections (adjusted to include nursing home costs) Percent of Income

Federal Tax Subsidies for Private Health Spending, 1998 Note: Total federal tax subsidy = $111.2 billion Source: Health Affairs 1999; 18(2):176

Who Pays for Healthcare? Source: Himmelstein & Woolhandler - Unpublished analysis of NCHS data, Health Affairs 1999;18(2):176 * Includes VA, NIH, subsidy for public hospitals, worker's comp, health departments etc. Amount in 1998 (billions) Percent Government$ % Medicare$216.2 Medicaid$170.6 Premiums for public employees$67.3 Tax subsidy for private insurance$124.8 Other*$157.9 Private employers$ % Individuals (excludes tax subsidy)$ % Total$ %

Who Pays for Health Care, US DHHS version (2002)

Behind Who Pays, 1998 Source: Himmelstein & Woolhandler - Unpublished analysis of NCHS data, Health Affairs 1999;18(2):176 * Includes VA, NIH, subsidy for public hospitals, worker's comp, health departments etc.

U.S. Public Spending Per Capita for Health is Greater than Total Spending in Other Nations Note: Public includes benefit costs for govt. employees & tax subsidy for private insurance Source: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

Source: Oxford Rev Econ Pol 1989;5(1):89 Who Pays For Health Care? Regressivity Of U.S. Health Financing

Many Americans Can't Afford the Basics Percent of Insured and Uninsured with Unmet Needs Source: Census Bureau - "Extended Measures of Well-Being: Meeting Basic Needs"

Financial consequences

U.S. Seniors Paying More for Ten Top Selling Drugs* Source: U.S. GAO – *Zocor, Ticlid, Prilosec, Relafen, Procardia XL, Zoloft, Vasotec, Norvasc, Fosamax, Cardizem CD

Financial Suffering at the End of Life Source: Ann Int Med 2000; 132:451 - SUPPORT Study of 988 terminally ill patients * Out-of-pocket medical costs > 10% of household income ** Patient or family sold assets, took out mortgage, used savings or took extra job

Illness and Medical Costs, A Major Cause of Bankruptcy 45.6% of all bankruptcies involve a medical reason or large medical debt 326,441 families identified illness/injury as the main reason for bankruptcy in 1999 An additional 269,757 had large medical debts at time of bankruptcy 7 per 1000 single women, and 5 per 1000 men suffered medical-related bankruptcy in 1999 Source: Norton's Bankruptcy Advisor, May, 2000

Rate of abortions per 1,000 women aged 15 – 44 in the United States and in South Carolina, 1973 – 2000 Guttmacher Institute

Guttmacher Institute data. Two-thirds of women who have abortions cite "inability to afford a child" as their primary reason.

Physician Visits Per Capita Source: OECD, Data are for 1997 or most recent available year

U.S. Public Spending Per Capita for Health is Greater than Total Spending in Other Nations Note: Public includes benefit costs for govt. employees & tax subsidy for private insurance Source: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

Hospital Inpatient Days Per Capita, 1997 Source: OECD, 1999

Difficulties Getting Needed Care Source: Commonwealth Fund Survey, 1998

Continuity of Care Source: Commonwealth Fund Survey, 1998

Reasons for Changing Health Plans *Changed job, or employer changed plan offerings Source: Health Affairs 2000; 19(3):158

Infant Mortality, 1997 Deaths In First Year Of Life/1000 Live Births Source: OECD, 1999 & NCHS

Life Expectancy For Women, 1997 Source: OECD, 1999 & NCHS

Life Expectancy For Men, 1997 Source: OECD, 1999 & NCHS

1.Universal coverage that does not impede, either directly or indirectly, whether by charges or otherwise, reasonable access. 2.Portability of benefits from province to province 3.Coverage for all medically necessary services 4.Publicly administered, non-profit program Minimum Standards For Canada's Provincial Programs

Source: Oxford Rev Econ Pol 1989;5(1):89 Who Pays For Health Care? Regressivity Of U.S. Health Financing

Source: Premier's Common Future Of Health, Excludes Out-of-Pocket Costs Who Pays For Canada's NHP? Province Of Alberta

Health Care Spending % Of GNP: U.S. & Canada, Source: Statistics Canada, Canadian Inst. for Health Info., & NCHS/Commerce Dept

Number of Insurance Products

Hospital Billing & Administration United States & Canada, 2000 Source: Woolhandler/Himmelstein NEJM 1991; 324:1253 & 1993; 329:400 (updated)

Physicians' Billing & Office Expenses United States & Canada, 2000 Source:Woolhandler/Himmelstein NEJM 1991;324:1253 (updated)

Difference in Health Spending Per Capita, U.S. vs. Canada, 2000 Source: Woolhandler/Himmelstein NEJM 1991; 324:1253 & 1993; 329:400 (updated)

Infant Mortality U.S. & Canada, Source: OECD 1999, Statistics Canada & CDF CANADA U.S. FIRST PROVINCE IMPLEMENTS NHP

Infant Deaths by Income, Canada 1996 Even the Poor Do Better than U.S. Average

Homeless in Toronto Death Rate Elevated, But Lower than In U.S. Source: JAMA 2000; 283:2152

Physician Services For The Elderly: Canadians Get More of Most Kinds of Care Source: JAMA 1996; 275:1410

Growth in Spending : Medicare vs. Private Insurers Per Enrollee Source: K. Levit, HCFA - Personal Communication - 3/1/00

NIH Clinical Research Grants (RO1) Falling in High Managed Care Markets Source: Moy et al. JAMA 1997; 278:217

Economics and health disparity: 1.Economic circumstances affect environment and behavior, which affect well-being 2.Economic circumstances affect health care access, which affects well-being 3.The health care financing system affects economic circumstances, which feeds back to 1. and 2. “It doesn’t have to be that way. We can do better!”