The Economic Impact of Racial, Ethnic, and Educational Health Disparities in the U.S., 2018

In the United States, health disparities exist by race and ethnicity and by educational level due to differential exposure to environmental risks and access to health care and socioeconomic opportunities and resources.

Compared to 2014, when researchers estimated that the economic cost of racial and ethnic health disparities in the United States was $320 billion, a new, follow-up study supported by NIMHD estimates the 2018 economic burden at $451 billion. This new study also estimates the cost of education-related health disparities at $978 billion.

Society incurs cost when health disparities are unaddressed, and this cost is growing. 

*GDP: Gross domestic product. GDP measures the size and growth of an economy.

The researchers concluded that the economic impact of health disparities in the United States is high—highlighting the need for policies and interventions that promote better health outcomes for all populations.

Key Findings

• The total economic impact of health disparities is high.
• The impact varies by educational level and by race and ethnicity.
• The economic impact of racial and ethnic and education-related health disparities varies by state.

Study Recommendations

• Federal and state health policymakers can use these estimates to inform areas where policies and programs are most needed to address health disparities and as take remedial actions to reduce them.
• State policymakers can look at the magnitude of the economic impact across racial and ethnic and education groups within their states and compare this to the size of their economy.

Go to economic impact details by: Race and ethnicity | Educational level
(Each broken out by national and state estimates)

Key Contributions

• This study is the first to provide estimates of the economic impact of health disparities at the national level and for all 50 states and the District of Columbia.
• Where prior estimates did not include American Indian/Alaska Native and Native Hawaiian/Pacific Islander populations, this study estimates the economic burden of health disparities for 5 racial and ethnic groups.
• It provides estimates of the economic impact of health disparities for adults without a 4-year college degree.

Background

In the United States, health disparities exist by race and ethnicity and by educational attainment due to differential exposure to environmental risks and access to health care and socioeconomic opportunities and resources.

Populations experiencing health disparities are likely to have limited access to treatment and preventive health care, which in turn, increases their risks for morbidity and mortality.

Among adults without a 4-year college degree, life expectancy has declined. Life expectancy—the average number of years a person is expected to live—is 78 years in the United States. Adults without a 4-year college degree also suffer higher rates of morbidity than adults with a 4-year college degree.

When people experience high levels of poor health, chronic diseases, and disabilities—coupled with low access to quality health care—these can result in more spending for medical care, lower labor market productivity, and premature deaths.

Approach

Racial and ethnic groups:

• Asian
• American Indian/Alaska Native
• Black/African American
• Hispanic/Latino
• Native Hawaiian/Pacific Islander

Education groups:

• Adults with less than high school/GED
• Adults with high school/GED
• Adults with some college

Economic Burden by Racial and Ethnic Minority Groups

National Estimates

The total cost of racial and ethnic health disparities was $451 billion and $1,377 per person. At about 2% of the U.S. GDP, this was comparable to the annual growth rate of the economy in 2018.

Across all racial and ethnic groups (except Asian), the highest to lowest impact was by:

• Premature deaths (65%)
• Lost labor market productivity (18%)
• Excess medical care costs (17%)

Impact borne by each racial and ethnic group, most to least:

• Black/African American (69%)
• Hispanic/Latino (21%)
• American Indian/Alaska Native (6%)
• Native Hawaiian/Pacific Islander (3%)
• Asian (2%)
• Although most of the impact was borne by the Black/African American population, the impact borne by the American Indian/Alaska Native and Native Hawaiian/Pacific Islander populations exceeded their share of the population.

Racial and ethnic groups that bore the most impact by economic components:

• Most impact from premature deaths:
  • Native Hawaiian/Pacific Islander (90%)
  • Black/African American (77%)
  • American Indian/Alaska Native (74%)
• Most impact from excess medical care costs:
  • Asian (55%)
• Most impact from lost labor market productivity:
  • Hispanic/Latino (43%)

State Estimates

Racial and ethnic groups with highest impact by number of states:

• Black/African American (33 states)
• Hispanic/Latino (9 states)
• American Indian/Alaska Native (8 states)
• Native Hawaiian/Pacific Islander (1 state)

Five states with the highest impact were among the most populous states:

• Texas ($41 billion)
• California ($40 billion)
• Illinois ($29 billion)
• Florida ($27 billion)
• Georgia ($21 billion)

Per person, from lowest to highest, the impact varied substantially:

• $76 (Vermont)
• $4,965 (District of Columbia)

States with the highest and lowest impact relative to their GDP:

• Impact equivalent to 5% or more of GDP:
  • Mississippi (8.89%)
  • Alabama (6.12%)
  • Louisiana (5.99%)
  • New Mexico (5.85%)
  • Nevada and South Carolina (5.18%)
• Impact equivalent to less than 0.6% of GDP:
  • Vermont (0.14%)
  • New Hampshire (0.33%)
  • Maine (0.43%)
  • West Virginia (0.51%)
  • Wyoming (0.58%)

Economic Impact by Educational Levels

National Estimates

The total impact of education-related health disparities was $978 billion and $2,988 per person. At about 5% of the U.S. GDP, this was 2 times the annual growth rate of the economy in 2018.

Across all educational levels, the highest to lowest impact was by:

• Premature deaths (66%)
• Lost labor market productivity (18%)
• Excess medical care costs (16%)

Burden by educational levels, most to least:

• High school/GED (61%)
• Less than high school/GED (26%)
• Some college (13%)
• 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 than a high school diploma/GED—who were only 9% of the population but bore 26% of the burden.

State Estimates

Impact in states by educational levels:

• Adults with less than a high school diploma/GED had the highest burden in most states (31 states)
• Adults with a high school diploma/GED (20 states)
• Adults with some college had the lowest impact in all 50 states and the District of Columbia.

Five states with the highest impact of education-related health disparities:

• Texas ($71 billion)
• California ($59 billion)
• Florida ($57 billion)
• North Carolina ($48 billion)
• Ohio ($48 billion)

Per person, from lowest to highest, the impact varied substantially:

• $1,503 (California)
• $8,432 (South Carolina)

States with the highest and lowest impact relative to their GDP:

• Impact equivalent to 10% or more of GDP:
  • South Carolina (18.29%)
  • Mississippi (13.44%)
  • Alabama (12.66%)
  • Kentucky (12.35%)
  • Arkansas (10.18%)
• Impact equivalent to less than 3% of GDP:
  • District of Columbia (1.90%)
  • California (1.97%)
  • New York (2.14%)
  • Connecticut (2.64%)
  • Minnesota (2.72%)

This study is a collaboration by researchers from the National Institute on Minority Health and Health Disparities, Tulane School of Public Health and Tropical Medicine, Johns Hopkins Bloomberg School of Public Health, Uniformed Services University, TALV Corp, and National Urban League.

Contact

Dr. Tilda Farhat
NIMHD
tilda.farhat@nih.gov