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Saving Lives and Decreasing Costs: The Economic Case for Health Justice

By Wendy Netter Epstein

Most proponents of health justice will tell you that health is a fundamental human right. They will say that there is a moral imperative to eliminate health inequities and to give all people equal opportunity to lead a healthy life. And they will be correct. Health justice as a framework is driven by this narrative — the laudable goals of health equity and social justice.

What you aren’t as likely to hear from health justice advocates, however, is that health justice is economically efficient. To the contrary, most health justice advocates see its framework as an alternative to the markets, efficiency, autonomy, and individual responsibility that are the hallmarks of conservative ideology.

Yet, there is no question that health inequities are costly to the individuals that bear them, in higher health care expenses, missed days of work, and fewer years lived. There are also significant costs to society — both direct and indirect. According to one analysis, disparities lead to $93 billion in excess medical care costs and $42 billion in lost productivity per year.

Making the economic case for health justice, and noting how it is inextricably linked to the moral case, is crucial. Because not only is the framework bolstered by notions of both fairness and efficiency, but also, as a practical matter, getting legislative and regulatory buy-in to fund initiatives to address health inequities requires making the economic case.

If health inequities could be ameliorated, government health spending and other safety net spending would be drastically reduced, workforce productivity would increase, and even healthy and wealthy Americans — who are the most likely to oppose the health justice framework — would benefit.

Reducing Government Spending

Few dispute the need to make more efficient use of government spending on health care. Although the U.S. does not provide universal health care, it still spends nearly twice the average of other industrialized nations. In exchange for that high spending, it has the lowest life expectancy among 11 peer countries.

Over time, the government has come to fund an increasingly larger share of health care. Now, more than 34% of Americans are either covered by government insurance or receive their care by direct public provision. The share of the federal budget required to pay for those services doubled in less than three decades.

There is growing evidence that addressing the Social Determinants of Health (SDOH) — such as access to nutritious food, safe housing, clean air and water, and public safety—would lead to an overall healthier population, and in turn, lower government health expenditures. A study conducted a decade ago estimated that eliminating health disparities for people of color would have reduced direct health care expenditures by $230 billion over a three-year period and that almost one-third of direct medical expenses for people of color were excess costs due to health inequities.

More recently, an analysis of COVID-related hospitalizations, which were disproportionately high among people of color, found that had Black and Latino people been hospitalized with COVID at the same rates as their white counterparts, $550 million could have been saved in health care costs in Texas alone.

And it isn’t just health care utilization that is at stake. There is also strong evidence that poor health leads to higher unemployment, which in turn means higher government spending on Medicaid and government disability benefits.

Spending money to create a more equitable society now almost certainly leads to a healthier population over time. Government spending on other safety net programs, such as public housing and food assistance, in turn would also decrease.

Workforce Productivity

The economic case for health justice must also consider economic gains from a healthier workforce.

People need to be healthy in order to be able to work in the first place. One study of data in Minnesota found that there were large racial disparities correlating with labor market non-participation. Correcting for those disparities would have meant thousands more Minnesotans in the workforce, and $247.43 million to $538.85 million in yearly net benefits to Minnesota.

Workers in ill health also miss more days of work and are less productive, leading to lower business efficiency. The health disparities that cause poorer health outcomes therefore impact the bottom line of the businesses employing these workers.

Economic Growth

One final consideration is the impact of inequality, generally, on economic growth. A popular conservative opinion is that inequality benefits growth because policies that benefit the rich ultimately benefit everyone through trickle down effects. Relatedly, equality is thought to shrink the size of the pie.

Evidence, however, suggests the opposite. Inequality hampers economic growth. And some preliminary evidence suggests that reducing health inequalities specifically leads to more rapid economic growth. One analysis estimated that a 10% reduction in cardiovascular mortality was connected with a 1% increase in growth of per capita income.

To be clear, not all interventions that target the SDOH will end up being economically efficient or will cause economic growth. Sometimes the cost of addressing the SDOH will exceed the economic benefit. Nevertheless, the intervention might still be merited based on principles of fairness and morality. Furthermore, the evidence is encouraging that many health justice interventions will be economically efficient, and the case for continued experimentation and data analysis is clear.

Most Americans believe there is a right to health, just as there is a right to free speech and a right to privacy. But unlike most other rights protected by the Constitution or recognized by the Supreme Court, a right to health obligates the federal government to pay for care, which limits some policymakers’ support of the creation of this right. The success of health justice-oriented policies, therefore, will be all the more likely if they can be supported by both moral arguments and economic ones.

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