Ethnic Health Disparities

American Public Health Association

NOVEMBER 2008

Evaluating the
Economic Causes and Consequences of Racial and Ethnic
Health Disparities
Kristen Suthers, PhD, MPH

R

acial and ethnic health disparities are differences in health status driven by social inequities. While most agree that disparities in health are a social justice issue, underlying economic issues that exacerbate these differences have not been recog-

nized. This paper dissects the economic costs of disparities first, at the individual level in terms of adverse impacts on employment and greater out-of-pocket health care expenditures, and second, at the population level by evaluating costs to government and business. We also make the case that the adverse
The second section will describe the impact health disparities have at the societal level, such as the economic consequences of racial and ethnic health disparities to the larger
Indeed, uninsured population: increased competition for resources, lost patients are often labor productivity and greater spending for all taxpayers. charged more than
It should be noted that this report serves as a primer rather than an exhaustive analysis of the econominsured patients for ics of health disparities. While it will touch on the the same care, a broad economic consequences of health disparities, poor health and economics are inextricably linked in practice known as
America in far more subtle ways than this report will
‘discriminatory pricing.’ document and warrant further study in future reports.
Discriminatory pricing results when uninsured patients are billed the full gross charge while insured patients receive substantial discounts. Part I: The Economic
Impact of Health
Disparities on Individuals and Communities
I. Lost income and labor productivity.

Racial and ethnic minorities suffer a
Conclusions: The Costs of Health Disparities
Can Be Reduced.
While barriers to eliminating health disparities exist, measures can be implemented to begin to turn the tide.
Researchers have found that health care organizations that partner with community stakeholders can improve availability and quality of health care in under-served neighborhoods. The CDC’s Racial and Ethnic Approaches to Community Health Across the United States (REACH) program has found community partnerships to be an effective strategy to improve quality of care and reduce disparities. While the return on investment for businesses who invest in employee health promotion may not be immediately apparent, researchers argue that continued efforts to reduce health disparities will become the norm over time, therefore improving the ratio of returns to costs in the future.
This report has explored some of the economic costs at both the individual and the societal level that result from the injustice of racial and ethnic health disparities. Some of the issues that have been discussed include