Health

‘Bias is beneficial’: Health inequality could cost $1 trillion by 2040

A new report warns that disparate health outcomes could cost the US healthcare system $1 trillion a year by 2040, nearly tripling over the next 20 years and accounting for almost 12.5% ​​of healthcare spending.

An analysis released by Deloitte on Wednesday showed that the cost of excess healthcare provided due to inequality is $320 billion a year, and the growth rate is outpacing overall spending trends. Total healthcare spending is expected to grow by 5.3% per year until 2040, while spending related to inequality will increase by 6.2% per year.

For consumers, this trend could mean up to $3,000 per person per year in healthcare spending by 2040. Today, the average person spends about $1,000 a year on health care.

“What you keep seeing is the lack of a concerted effort to reach that number collectively. With a cynical eye, you can see that injustice and bias are beneficial in certain cases,” said Neil Batra, director of life sciences and healthcare at Deloitte Consulting and co-author of the report. “It’s a real disappointment because it says you have a fundamental incentive gap that perpetuates this and creates barriers to addressing this issue.”

The analysis identified the cost of socioeconomic, racial and gender differences among several costly diseases, including breast cancer, diabetes, colorectal cancer, asthma and cardiovascular disease.

For example, racial disparities in diabetes care now increase costs by $15.6 billion a year, which is approximately 4.8% of total annual diabetes care costs. Socioeconomic disparities in asthma management cost about $56 billion a year, or nearly 4.3% of annual asthma care costs.

“These avoidable costs are the result of an unfair healthcare system and can have serious consequences for the health and well-being of all people,” the authors write. “No individual, no family, no healthcare system is capable of withstanding such inefficiency and its consequences. We can begin to address this problem by designing a fair future today.”

The report calls for legacy organizations, industry innovators, community groups and government agencies to come together to end health inequalities and curb rising healthcare costs. “Trying to do this in isolation is not the way to address this problem,” said Andy Davis, report co-author and head of healthcare practice at Deloitte Consulting.

The report offers several recommendations, such as implementing value-based care models, building cross-sectoral partnerships, unifying the health data infrastructure, and ensuring diversity in data collection efforts.

At the local level, Davis and Batra called for addressing the social determinants of health and building trust among underserved communities. The report recommends that healthcare organizations look for ways to engage with the community to address environmental issues that exacerbate health inequalities, such as nutrition, infrastructure, wealth, employment, education, and public safety. They should also expand their community networks to facilitate data sharing, early diagnosis and intervention, eventually moving to a more proactive model.

The report comes at a time when health equity experts are looking to create sustainable funding for equity initiatives. But moving away from grants and philanthropic funding to close health inequalities and moving towards disease prevention will require more robust data collection and collaboration, industry experts agreed.

It will also require organizations to allocate money for long-term solutions, said Dr. Windell Washington, chief clinical officer of Verily Health Platforms, an Alphabet subsidiary.

“You prioritize your community based on how you spend your budget,” Washington said. “So if you say you’re going to do something with one-time funding, the chances of you building something sustainable are zero.”

Dr. Kelly Tice, the first-ever chief health equity officer at GuideWell, the joint holding company of the Florida Blue insurance company, said the industry is trying to redirect resources spent on health inequalities towards prevention. Florida Blue is committed to rewarding members and providers for overall wellness to help with the transition.

“Our system is built on a diseased model, not a healthy model. We are already paying the unfavorable price of longstanding disparities in health,” she said. “Across the payer industry, we really need to understand where these costs are coming in and whether some of the money can be channeled into health equity solutions if it is already being spent on follow-up care.”

Eliminating these differences requires their identification. According to industry observers, efforts to collect data on race, ethnicity, gender and social determinants of health need to be strengthened. Health organizations also need to push for policy changes and the massive investments in public health infrastructure that investors and consumers have begun pushing in recent years, experts say.

“If you are on the wrong side of this narrative, either in reality or imagined, you can have a huge whiplash effect on your consumer group,” Batra said. “That’s the reason investors care. And that’s the reason I think it’s now becoming a major business investment, rather than a “let me do the right thing” investment.


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