Making a financial case for health equity

Did you know that health disparities cost our country billions of dollars each year?

The National Vital Statistics Reports estimated that direct medical care expenses from health disparities have cost $230 billion from 2003-2006 (in 2008 inflation-adjusted dollars).¹

Child poverty shrunk the size of the U.S. economy by an estimated $1 trillion, or 5.4% of the nation’s gross domestic product, in 2015.²

People with low socioeconomic status and those who live in rural and frontier areas also experience worse health outcomes. For instance, rates of incidence and morbidity from cardiovascular disease are high for people with low socioeconomic status.³

And individuals of color and of various ethnic backgrounds, religions, sexual orientation, or people with limited English proficiency all are disproportionately affected by this. 

Conversely, providing equitable care — or ensuring that all individuals receive the tools and resources they need to achieve health and well-being, regardless of gender, ethnicity, geography or socioeconomic status — can have the opposite effect. More equitable outcomes could actually save America up to $1 trillion per year, as a result of improving outcomes and the patient experience.⁴

Put simply: Hospitals and health systems can’t afford not to address health inequity.  

Fortunately, there are many ways to do so. We recommend checking out implicit biases, partnering with community organizations and hiring diverse staffs, to start.

We also are learning from hospitals and health systems who are leading the way in promoting value in their communities by addressing disparities head on. For example, the University of Mississippi Medical Center initiated a Diabetes Telehealth Network pilot program to treat patients in the Mississippi Delta region, one of the most impoverished areas in the country. The Center saved $339,000 in health care costs, as measured through Medicaid.

Sinai Health System uses community health workers to help children disproportionally affected by asthma in Chicago. They reduced children’s symptoms and significantly decreased emergency department visits and hospital stays. Sinai also estimates $3 to $8 in health care costs are averted for every $1 spent on the program.

And Dallas-based safety-net hospital Parkland Health & Hospital System launched a program to allow uninsured patients — many of whom are low-income, don't speak English and/or have low literacy levels — to self-administer long-term antibiotics. While insured patients who needed long-term antibiotics could self-administer necessary medication at home or had other options, uninsured patients were relegated to inpatient status at Parkland or discharged to another location, with the hospital paying for outpatient treatment.

In 2015, Parkland freed up 5,893 inpatient bed days through this program, equaling a direct cost avoidance of more than $7.5 million in unreimbursed care.

In each of these situations, hospitals have reduced costs, improved outcomes and made for happier and healthier communities. To access more examples like these and to learn how you can promote better health and enhance value in your organization, especially where disparities exist, visit http://www.diversityconnection.org and https://www.aha.org/value-initiative.

And please stay tuned for future blogs from us on health equity and value. If you missed our podcast from last month about how health equity affects the length and quality of our lives, you can listen to it here. 

Priya Bathija is vice president of AHA’s The Value Initiative and Duane Reynolds is president and CEO of the AHA’s Institute for Diversity and Health Equity. 
 

_{1 NCBI: Estimating the economic burden of racial health inequalities in the United States: https://www.ncbi.nlm.nih.gov/pubmed/21563622}

_{2 Peter G. Peterson Foundation: What are the economic costs of child poverty? https://www.pgpf.org/blog/2018/09/what-are-the-economic-costs-of-child-poverty}

_{3 Centers for Disease Control and Prevention. Heart Disease and Stroke Prevention: Addressing the Nation's Leading Killers: At A Glance 2011. http://www.cdc.gov/chronicdisease/resources/publications/AAG/dhdsp.htm. Accessed 2/27/12.}

_{4 NCBI: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5620509/pdf/ahdb-10-279.pdf}