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Essay: Solving Equity Disparities in US Health Care: Investigating Socio-Economic Impact on Health Spending

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In response to the directives of the World Health Organization (WHO), many research studies into health equity have been carried out and discussed over the past few decades in the United States (U.S.). Being a rich nation, embracing the ideologies of capitalism and democracy leads to unavoidable disparities and inequities when it comes to health services. It is the interrelationships between social, economic, and political factors (alongside others, such as individual behaviour and biology) which affect the overall status of both individual and population-based health. It has become a focus within U.S. health policy to develop a roadmap designed to target and mitigate the impacts of these health determinants with a view to promoting health equity and eliminating disparities.

The U.S. Health System:

Introducing quality health coverage for uninsured citizens and lowering the general costs of health care have always been the two major concerns within the U.S. health system. Despite the enforcement of the 2014 Affordable Health Care Act (ACA), these issues have been improved but are not yet resolved. According to the Centers for Disease Control (CDC), the number of uninsured Americans (those possessing no health insurance for the entire year) remained at the high figure of 28.1 million, or 8.8% of the population in 2016 (Barnett and Berchick, 2017). Government intervention in health policy has caused the number of uninsured people to decline from the Pre-ACA era figures: 42.0 million (13.4% of the population) in 2013 and 45.3 million (15.6%) in 2004 (Cohen et al., 2017).

As per Medicare and Medicaid Services (CMS), the data saw a 4.3% increase in U.S. health care spending as compared to prior years, reaching $3.3 trillion (17.9% of GDP) or $10,348 per person in 2016, partly driven by the subsidies paid on behalf of lower-income Marketplace plan participants (CMS 2016, Table 1). In 2013, health care spending sat at $2.9 trillion ($9,515 per person) and 17.2% of GDP. In 2004, it attributed to a mere $1.9 trillion ($6,481 per person) and 15.4% of GDP (CMS 2015, Table 1). The U.S. health care spending has been trending high over the last decade.

The government/public share of total health spending accounted for 45.2% of the total health spending in 2016; whereas, the private health insurance and out-of-pocket spending accounted for 54.8%. The public spending portion is expected to rise to 47% by 2025 (CMS 2016, Table1).

In 2016, the U.S. health spending figures were also the highest among any other countries in the Organization for Economic Cooperation and Development (OECD). The OECD consists of 35 member countries, including the U.S., Canada, South America, Europe, and the Asia-Pacific region, with national health spending (as a percentage of GDP) ranging from 4.3% (Turkey) to the second highest at 12.4% (Switzerland) (OECD, 2017).

WHO assessed the world’s health systems and reported in its June 21, 2000 report that the U.S. health care system ranked 37th out of 191 countries according to its performance; it also came last in the category of overall quality of health care among the top 11 industrialised countries, according to The Commonwealth Fund’s ranking based on 2011 data. Although Switzerland's health spending is the second highest among the OECD member states, the Swiss health system is universal, meaning that there are no uninsured residents (Osborn et al., 2016).

Yet, the American issue is more complex than aiming to achieve universal health insurance. Instead, the goal is for all citizens to: '…have accesses to health services they need without the risk of financial ruin or impoverishment’ (WHO, 2013). Putting aside the uninsured population still leaves those with insurance, despite paying an expensive insurance premium, constantly trying to avoid financial repercussions and often opting to avoid medical care so as to save costs. Health equity has by no means been a reality since the introduction of the Affordable Health Care Act.   

The need for the U.S. to rethink its health policy is critical, with it having been suggested that: 'The continuation of these problems threatens the financial health of households, federal and state governments, businesses and non-profit organizations' (Fuchs, 2011). This opinion has been echoed by Dr. Margaret Chan, WHO Director-General, at the Ministerial meeting on Universal Health Coverage at Singapore in February 2015. She claimed that:

'If public health has something that can help our troubled, out-of-balance world, it is this: growing evidence that well-functioning and inclusive health systems contribute to social cohesion, equity and stability' (Chan, 2015).

The ultimate goal is to make quality health care accessible and affordable for all American citizens. The first step to achieve this lies in identifying and understanding the interrelationship of determinants of health on health care expenditures; this is central to the task of affecting a change to cost-effective health promotion interventions/policies. Following this, research and a measurement of health outcomes will be required to further determine the critical questions in developing practical policy options.

Political and Socio-Economic Factors:

Responsible for supporting all member states of the World Health Organization (WHO), Global Health Initiatives have existed for over four decades. WHO’s strategic directives help shape our understanding of how to identify health determinants, the definitions of standards for health, health policy options, and the standards for research and outcome performance measurements. These are very useful indicators in the approach to global health.

The Declaration of Alma-Ata, signed on September 12, 1978, established the framework for global health policy that would continue throughout the 20th century, stating that:

‘. . .  health, which is a state of complete physical, mental, and social well-being, and not merely the absence of disease or infirmity, is a fundamental human right and that the attainment of the highest possible level of health is a most important world-wide social goal whose realization requires the action of many other social and economic sectors in addition to the health sector (WHO, 2013).’

In response to WHO directions, all countries have since enhanced their collaboration to ensure primary health care: ‘as a key to the attainment of the goal of Health for All’ (WHO, 1978). Although the timeline outlined in the Alma-Ata Declaration posited that all immunisations against major infectious diseases, basic sanitation and safe water would be available for all by the year 2000, this was by no means feasible. However, significant progress has still been made.

To further build upon the terms of the declaration, in 2005 all WHO member states committed to strive for universal coverage by the year 2015 through the adoption of the eight United Nations Millennium Goals (MDGs) to fight poverty and positively influence health services (United Nations, 2015). 'Good health and well-being' is the third Sustainable Development Goal (SDGs) (Donaldson, 2017) established as part of the post-2015 WHO health agenda. Target 8 of SDG 3 is to achieve universal health coverage.

The Millennium Goals Report 2015 offers evidence-based observations that socio-economic, physical, and individual behavioural characteristics, combined with government policies, are important determinants of health within communities. Disparities and inequity of health services are thus seen as: ‘systematic differences in health outcomes’ (WHO, 2017).

The U.S. Department of Health and Human Services' (HHS) Office of Minority describes health disparity as being: 'a particular type of health difference that is closely linked with social, economic, and/or environmental disadvantage (based on gender, age, race, and/or ethnic group, etc.)'. In 2015, the U.S. Centers for Disease Control and Prevention (CDC) identified significant health disparities as being the leading causes of death. The organisation reported that African Americans are the demographic most likely to suffer premature death from heart disease. Heart disease was found to be most prevalent in people with lower incomes and lower education levels. The report continued that the high levels of health care offered to disabled people incurs an imbalanced cost, meaning that individuals with other social risk factors are more likely to receive lower quality health care (National Quality Forum, 2017).

There were numerous factors identified as being responsible for the skyrocketing of health care costs. More traditional reasons included high administrative costs, ‘waste’ in health care (Fuchs, 2009), and high staffing costs, but these could not fully address the root causes of health inequities that attributed to the disproportionate costs. Considering these discrepancies as a result chain, it can be said that each of the cost factors can reasonably be considered an output rather than an input or process (build on the concept from ‘A representation of the result chain for universal health coverage, focusing on the outcomes’ developed by WHO) (WHO, 2013). High administrative costs exist as the result of the complex requirements of various insurers. Health care ‘waste’ can be considered the output of excessive defensive medicine or expensive treatments mix (low value of expected benefit or no possible benefit). High demands within health care can be attributed to accidents, geography, living environments, poverty, or poor health behaviours. Evidence shows that level of educational attainment, employment status, income level, gender, and ethnicity each determine individual health outcomes. Such a review shows that it is the interrelationships between social, economic, physical, environmental, and political factors that influence the health of an individual. A cost-effective, high-quality, and equal health service can only be realised when interventions are used to target multiple determinants of health.

Health services are multi-faceted and multi-levelled, requiring systematic intervention methods to target promotion, prevention, treatment, rehabilitation and palliation across health care in communities and various medical treatment facilities. To provide such extensive coverage, it is imperative to address social, economic, and political determinants both within and beyond the traditional health sector. Sectors such as transportation, environment, housing, education, and agriculture are highly correlated with satisfactory health outcomes.

In order to develop a cost-effective policy, the U.S. government has taken on board UN resolutions with a view to realising the underlying causes/determinants of health care issues, and their impact of social-political, economic, personal behavioural, structural, cultural, community-based, and health-related disparities (Cooper, Hill and Powe, 2002). The quest for health equity began decades ago. A prominent move was the 1983 President’s Commission for the Study of Ethical Problems in Medicine, Biomedicine, and Behavioural Science Research; equally significant were the following reports: the 2001 report, Crossing the Chasm by the National Academy of Medicine; the 2013 CDC report, Health Disparities and Inequalities Report – United States, 2013; and the 2017 National Quality Forum Final Report, A Roadmap for Promoting Health Equity and Eliminating Disparities: The Four I’s for Health Equity. These publications highlighted the efforts of government initiatives and funding support systems to mitigate risk factors, and implement cost-effective measurements for spending in health care.

Despite the enormous research effort and subsequent government subsidies allocated to health care, health equity is by no means a reality for individuals residing in the U.S. – a failure that can be explained by the lack of governance and political control over the American health sector. The U.S. government exerts very little control over the cost of drugs, medical equipment, and hospital costs, all of which would help to reduce health costs (Fuchs, 2010). Through the expansion of Medicaid and the establishment of health insurance marketplaces, the ACA initiated a rapid increase in health insurance coverage in 2015. The policy is structured so as to ensure the attainment of health insurance, with little political influence being harnessed in the establishment of cost-restraining measures. Chin et al. (2007) provided evidence-based findings on the need for interventions by government, communities, organisations, and providers. Statistical data makes clear that other countries that have exerted huge political control over costs and redistribution of resources have managed to keep health care costs at sustainable and manageable levels, and have provided universal health coverage in practice. Many health determinants are dependent on political decisions and policy.

Following the post-2015 United Nations’ SDGs towards universal health coverage, it became clear that there is a need to articulate a quantifiable measurement that uses parameters and indicators to monitor progress. According to the National Quality Forum (2017), A Roadmap for Promoting Health Equity and Eliminating Disparities, it provides a fine example of beneficial government participation in research within health sectors. Recommendations, funded by the HHS, are made as to how performance measurement and its associated policy levers can be used to eliminate health disparities and promote health equity. Its emphasis on collaboration and partnerships across communities, health care providers and government agencies (alongside the promotion of public policies) is of vital importance to achieve health equity. Significant investment is required for the creation of medical innovations and infrastructure, particularly with the rising numbers of non-communicable diseases, and of mental health. The report comes up with 10 recommendations:

'1. Collect social risk factor data; 2. Use and prioritize stratified health equity outcome measures; 3. Prioritize measures in equitable access and high-quality care for accountability purpose; 4. Invest in preventive and primary care for patients with social risk factors; 5. Redesign payment models; 6. Link health equity measures to accreditation programs; 7. Support outpatient and inpatient services with additional payment for patients with social risk factors; 8. Ensure organizations disproportionately serving individuals with social risk can compete in value-based purchasing programs; 9. Fund care delivery and payment reform demonstration projects to reduce disparities; and finally, 10. Access economic impact of disparities from multiple perspectives.' (National Quality Forum Final Report, 2017)

Such recommendations, when implemented, will make for a powerful change in U.S. health services. The policy is intended to prioritise the identification of the causes of health disparities, with actions in place aiming to reduce these inequities through the implementation of evidence-based interventions, performance measurements, and incentive payment programs.

Many recommendations have been made to construct a roadmap to health equity in the U.S.; still, it will prove difficult for the U.S. government to solely pursue health equity when confronted with the hard evidence of economic, security and political risks from other pressing national issues. A curative approach is by far most important strategy to tackle sickness but can only be effectual when new medicine and biotechnologies are complemented with the support of public policies, for example, an increase in health care public financing; at this point, it will provide quality health services to patients in its fullest sense.

Throughout history, the area of health has never taken precedence over other political and societal objective, such as partisan and economic growth. Moreover, in today's ever-evolving and imbalanced world, it would be wrong to assume that the continual improvement of health could go on uninterrupted. No country is completely isolated from the risks imposed by natural disasters, world conflicts and other unexpected events. It is full of difficulties to run extrapolations due to political risks, event risks and many other factors that found outside health sector.

At an international level, war conflicts in Syria and in African countries have caused massive migrations. Many refugee camps contain alarming levels of health concerns. Polio, once a near-extinct disease, is now a major health emergency due to a lack of sanitation and clean water. In the wake of austerity measures in Greece, health is suffering. Food price volatility in many African countries has instigated waves of hunger and malnutrition. Each example here proves that global health outcomes are dependent on global governance.

Based on WHO’s findings which suggest that gaps in the accessing of preventive and curative health services have been widened between poor and rich countries, and between urban and rural areas. For example, using the rate per 1,000 live births as scale to compare Norway with developing countries shows that infant mortality was 3.4 in Norway, versus 100-190 in the developing countries; the mortality rate for children under 5 years of age was 3.5 versus 175-300; the maternal mortality rate was 7 versus 600-1,600; and general life expectancy was 83.5 years for women and 70 years for men in Norway, versus less than 50 years for both categories in the developing world (Ottersen and McNeill, 2014).

Ever-increasing poverty, mass migration, and population displacement caused by armed conflicts, famine, and climate change remain the biggest threats to human development and health well-being. The transformation of commercial landscapes, due to multi-national trade treaties and transnational corporations (Ottersen and McNeill, 2014), has altered the behavioural patterns of large population groups which in turn negatively impacts the health systems of treaty countries. Global political domains (such as Russia and Eastern Europe, the European Union, China and Asian-Pacific, and the Americas) are powerful political forces that have shaped the global health systems. More than ever, altruistic international governance of health movements is critical to the continuous development and financing of health policies in today’s world.

The highly disproportionate distribution of income is getting worse. For example, in the U.S., about 47% of the nation’s total adjusted gross income (AGI) goes to the top 10% of taxpayers, while the bottom 50% account for just 11% of the total AGI (Tax Foundation, 2017, Table 1). Social and economic gaps are widening which could indicate the potential for a further deterioration in health care performance and coverage, should the U.S. government not take corrective action immediately. That said, it could also push back the role the U.S. government play at this supranational level, other than offering trivial support to the UN initiative. The U.S. government recognises the importance of promoting health equity, and eliminating disparities in health services. However, it is doubtful that the U.S. administration is ready to turn health policy into social policy (Robert and Booske, 2011) due to the necessary trade-off that would emerge between political freedom and health (Kickbusch, 2015). All the same, several studies suggest that: 'more years of social-democratic government are associated with better population health', indicating that government intervention policies in health and tax reforms are necessary in order to create health equity (Mackenbach, 2014).

Both on a global and national level, recognising political, social, and economic determinants of health are imperative in the quest to develop effective health policy. Directives for health equity, health financing, medical innovations, and mitigations of social risk factors are each dependent on satisfactory political actions along with a positive change regarding socio-economic factors.

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