Addressing Racial Disparities in Health Care Expenditures: The Impact of Racial and Economic Equity

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Recent research has indicated that racial disparities in health outcomes tend to diminish when Black and White adults live in comparable living conditions. However, until now, it remained uncertain whether these improvements extended to health care expenditures, according to a new study.

The new findings demonstrated that racial disparities in health care expenditures diminish or disappear in conditions of both racial and economic equity, where Black and White adults have similar living conditions and access to health care services.

In the cross-sectional study, investigators utilized a nationally representative sample, aiming to evaluate whether these disparities are minimized when Black and White adults reside in areas with similar racial composition and economic conditions.

The study, conducted using data from the Medical Expenditure Panel Study (MEPS) in 2016, included 7062 non-Hispanic Black or White adults residing in 2238 US Census tracts with a Black population of 5% or greater.

Among these respondents, 33.1% identified as Black and 66.9% as White. The average age was 49 years, and the gender distribution was similar. Demographic characteristics varied significantly across income-race Index of Concentration at the Extremes (ICE) quintiles.

The research examined total health care expenditures as well as specific categories, comparing expenditures between Black and White adults living in the same ICE quintile, a measure of racialized economic segregation.

Higher ICE quintiles, indicating areas with greater White racial and economic privilege, had fewer Black residents, higher education levels, higher income, lower poverty rates, better mental and physical health, and better access to health care services.

The study found an increasing trend in health care expenditures from the lowest to the highest ICE quintiles, including total health care, office-based care, prescription drug use, and dental services. Emergency department expenditures decreased with increasing ICE quintiles, while outpatient and inpatient expenditures showed no clear pattern.

In areas characterized as mostly high income with mostly White residents (ICE quintile 5), Black adults had significantly reduced odds of incurring any health care expenditures compared with White adults, at an estimated $2145 less per year.

Among those in ICE quintile 5 with any expenditures, Black adults spent 30% less on health care, indicating a substantial disparity in costs between Black and White individuals despite similar health statuses, the study showed.

In ICE quintile 3, representing the most racially and economically integrated areas, differences in total annual health care spending were minimal, with an average annual difference of $79.

Despite similar living conditions, differences persisted between Black and White respondents. In areas with comparable conditions (Q1), Black respondents had lower education, income, and higher rates of public insurance or uninsurance compared with White respondents.

In moderately integrated areas (Q3), Black respondents were more likely to be employed and had fewer comorbidities. In predominantly high-income areas (Q5), Black respondents were younger and had lower income, higher rates of uninsurance, and more difficulties paying medical bills compared with White respondents.

Ratings of good physical and mental health varied across the quintiles, with some differences noted in mental health between Black and White respondents in specific areas.

“Expanding on previous findings that health disparities between Black and White individuals are minimized or nearly nonexistent in areas where Black and White residents live under similar conditions, this cross-sectional study shows that health care expenditure disparities can also be minimized or nonexistent—but only under conditions of both racial and economic equity and equitable health care access,” investigators concluded. “Altogether, our findings further reinforce that place is important and that the social, economic, and health care equity context is key to minimizing health care expenditure disparities for Black adults in the US.”

Reference

Dean L, Zhang Y, McCleary R. Health care expenditures for Black and White US adults living under similar conditions. JAMA Health Forum. doi:10.1001/jamahealthforum.2023.3798