High spending, poor outcomes: the health results of inequality in the US

A recent article in JAMA, “Health care spending in the United States and other high-income countries”, by Irene Papanicolas, Liana Woskie, and Ashish Jha, is the latest in the almost continuous series of articles on this topic that have been appearing for decades. The dramatic difference between how much we in the US spend (per this paper, the US spends 17.8% of GDP on “health care” compared to 9.6-124% for the other 10 highest-income countries—United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland, and Denmark) and our health outcomes (e.g., lowest life expectancy and highest infant mortality) continues to be striking. This information appears regularly, in one form or another, from reliable sources such as the Commonwealth Fund, the Kaiser Family Foundation and its Kaiser Health News. It is the subject of many academic studies and books by experts, such as “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back”, the 2017 book by Elisabeth Rosenthal, now editor of KHN. I have addressed this topic extensively both in my book, “Health, Medicine, and Justice: Designing a fair and equitable healthcare system” (Copernicus Healthcare, 2015) and in many of my blogs (e.g., US Health Rankings remain low and #Trumpcare will make them worse!, June 18, 2017).

So what is new in this current study? Why is it important? As best as I can tell, it is the spin being put on it by a variety of commentators, and in articles that point out those aspects that seem to be different from what has been published before, such as in "Why Is U.S. Health Care So Expensive? Some of the Reasons You’ve Heard Turn Out to Be Myths” by Margot Sanger-Katz in the New York Times March 13, 2018. The original title of that article, preserved in the hyperlink URL, was “United States healthcare resembles rest of world”, an amazingly hard claim to make given the data that the study itself presents. The Sanger-Katz piece manages to do this by both cherry-picking some data points, including that “…the United States sends people to the hospital less often, it has a smaller share of specialist physicians, and it gives people about the same number of hospitalizations and doctors’ visits... while its spending on social services outside of health care, like housing and education, looked fairly typical.” Maybe, but the important findings, even mentioned in the Times article, are not suggested by the headline, such as “The nation did rank near the top in its use of certain medical services, including expensive imaging tests and specific surgical procedures, like knee replacements and C-sections.”

The article in JAMA is accompanied by four editorial commentaries, taking different approaches; they are well and accurately analyzed by Don McCanne in the “Quote of the Day” piece he wrote on it. The most important is that by Howard Bauchner and Phil B. Fontanarosa, “Health Care Spending in the United States Compared With 10 Other High-Income Countries: What Uwe Reinhardt Might Have Said” (JAMA. 2018;319(10):990-992. doi:10.1001/jama.2018.1879, full text requires subscription). Reinhardt died a few months ago, but the authors do an excellent job of pointing out the important issues that he had already called attention to in previous articles, and would likely emphasize regarding this one.

Importantly, the article by Sanger-Katz goes on to say

There were two areas where the United States really was quite different: We pay substantially higher prices for medical services, including hospitalization, doctors’ visits and prescription drugs. And our complex payment system causes us to spend far more on administrative costs. The United States also has a higher rate of poverty and more obesity than any of the other countries, possible contributors to lower life expectancy that may not be explained by differences in health care delivery systems.

Let us look separately at these two, higher prices and high administrative costs, and high rates of poverty and obesity. Higher prices and higher administrative costs are, shock, a major reason that our medical care costs so much! The higher administrative costs, which the study estimates at 8% compared to 1-3% for other countries, are a huge driver; so are prescription drug expenses, $1443 per capita in the US vs a range of $466 to $939 in the other countries. What all this is about is profit.It is the elephant in the room in all these discussions. In the US, “healthcare” spending includes the enormous profits made by insurance companies, pharmaceutical companies, device makers, and providers (especially hospitals and health systems, as well as some very expensive specialists). This is money being taken out of the system, and is not about providing medical care, not to mention “health” care or certainly “health”. And while the study shows that US physicians (even primary care physicians, although this is very variable country to country) make more, this important graphic, recently updated, shows how much of this cost is related to the increase in the number of “administrative” personnel compared to doctors in the US over the last few decades. I first saw this graph in about 1995, and while the relative increase was huge

it is dwarfed by the phenomenal increase since then, as shown in the full graphic:

(Note that after the ACA went into effect, the uptick was even steeper.)

The other point identified by Sanger-Katz is that the US has a “higher rate of poverty and more obesity than any of the other countries”. These go hand in hand to some degree (the easy and cheap availability of calorie-dense low nutrition foods to poor people), but both are about blaming the victims. The higher rate of poverty is most important. The damning fact is that the US tolerates this and does not have, like other rich countries, social service programs in place to both decrease the rate of poverty and to mitigate its most malignant effects on health such as lack of food, housing, warmth and education. And, of course, health care, which is available either free or at prices people at different income levels can afford (much less for poor people) in those other nations. The US is very unequal economically; the growth in wealth has been so disproportionately to the top <0.1% that the three richest Americans now have as much wealth as the bottom half of our population. Our inequality-adjusted Human Development Index (HDI) is lower than most of the wealthiest nations of the world (#19).

Arguing that the fault in our cost and quality of healthcare is the result of higher poverty levels (and for the record, I don’t think that this is what either the study’s authors or Sanger-Katz is doing) is somewhat parallel to saying we have worse health because of our ethnic and racial diversity (which has been done). The important 2015 Case and Deaton study, which I have previously discussed (Rising white midlife mortality: what are the real causes and solutions?, November 14, 2015), showed increasing mortality for poor white non-Hispanic people. This was shocking, but it would be shocking even if it included Hispanics, or Blacks, or Native Americans. There is an old joke about the person who murders his parents and pleads for mercy because he is an orphan; this is pretty analogous to the issue of poverty and health.

Bauchner and Fontanarosa note that Uwe Reinhardt was very critical of insurance companies for having, on top of nearly 3% profit, 18% “operating costs” (only 79% was spent on actual health care) that included, among other things, “…marketing, determining eligibility, utilization controls (e.g., prior authorization of particular procedures), claims processing, and negotiating fees with each and every physician, hospital, and other health care workers and facilities. These operating costs are about twice as high as are the overhead costs of insurers in simpler health insurance systems in other countries.”

To say we have worse health status because we have more poor people is an indicting tautology; we should identify and address the causes of poor health which are mostly “upstream”, the social determinants, and very tied to poverty. Our healthcare dollars should be spent on delivering healthcare and not profits; our overall dollars should be spent on decreasing the impact of the tremendous economic and social inequities that exist in the US.

This is the way to both a more healthy and more just society.

Rising white midlife mortality: what are the real causes and solutions?

 A widely covered and important health research study was recently published by Princeton economists Anne Case and Angus Deaton in the Proceedings of the National Academy of Sciences, “Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century”. The main message is contained in the title – mortality rates for white middle-aged Americans are going up – but there are three other important findings that emphasize its significance.

The first is that mortality rates are going down for every other age and ethnic group, as well as for whites of the same age in other developed countries (see graphic). This means something special is happening to this population group in the US. The second is that this increasing mortality rate is not evenly distributed across class, but is concentrated in the lower-income, high-school-educated or less, group of people. This begins to suggest what is special about this group: that they are being hit hard by societal changes that particularly affect them. The third is that the mortality rates for African-Americans, while decreasing, still significantly exceed those of this group of midlife whites. All of these bear further examination.

That these death rates are rising was apparently surprising to the study’s authors, according to the New York Times article “Death Rates Rising for Middle-Aged White Americans, Study Finds” by Gina Kolata on November 2, 2015, which begins with the sentence “Something startling is happening to middle-aged white Americans.” It surprises not only Case and Deaton, but also numerous commentators quoted in the article and in subsequent coverage. An example cited by Kolata is Dr. Samuel Preston, professor of sociology at the University of Pennsylvania and an expert on mortality trends and the health of populations, whose comment was “Wow.”  I guess this is an appropriate comment about an increase in mortality rates of 134 more deaths per 100,000 people from 1999 to 2014, which Dr. Deaton says is only matched by HIV/AIDS in current time.

But the findings are not too surprising to me. After all, Deaton and Case are economists, not physicians or health researchers, and they came upon this data almost serendipitously while studying other issues (such as whether areas where people are happy have lower suicide rates). But others, those who are physicians and health researchers, should know better. Maybe the doctors expressing surprise are those who don’t take care of lower-income people. And the health researchers are those who have not been reading. In a blog piece  from January 14, 2014 (“More guns and less education is a prescription for poor health”) I cite  Education: It Matters More to Health than Ever Before, published on the Robert Wood Johnson Foundation website by researchers from the Virginia Commonwealth University Center for Society and Health, which notes that “since the 1990s, life expectancy has fallen for people without a high school education, a decrease that is especially pronounced among White women.” This was reported over a year and a half ago, and discusses a trend in place for two decades!

Or maybe I am not surprised because I am a doctor, and see these patients both in the clinic and in the hospital. We do take care of lots of lower income people – those not in the 1%, or the 20% or even the top 50%. Yes, the bottom half of the population by income do exist, and many of them are white, and they are not doing well. The study by Case and Deaton indicates that the causes of death that are increasing the mortality rates in this group of people are not increases in the “traditional” chronic diseases such as diabetes, heart disease, and cancer, but are rather due to substance abuse (illegal drugs, prescription narcotics, and alcohol) and suicide. This is not to say that we don’t see much illness and many deaths from those other chronic diseases in this population; we do, and they account for the high baseline mortality among this group, but these other causes are the reasons for the rising mortality rate.

We have seen the explosion of prescription opiate use in people who (like Dr. Case, as it happens) have chronic musculoskeletal pain (despite increasing evidence that opiates are not very effective for such pain). This often results from their work as manual laborers, either from a specific accident or from the toll wreaked by chronic lifting, bending, twisting, and straining. We also see increased use of alcohol, that traditional intoxicant. While sometimes it seems that we hear more about studies touting the benefits of a couple of glasses of wine a day, the reality is that millions of lives are destroyed directly and indirectly by alcohol use: those of the drinkers, those of their families, those of the people they hit when driving drunk. And in both urban and rural areas (people in rural areas were particularly affected by the mortality increase in Case and Deaton’s study) the use of methamphetamine. And as the drop in standard of living for people who used to make their living with their bodies doing jobs that have disappeared or they can no longer physically do becomes clearly irreversible and leads to serious depression, often compounded by chronic pain and substance use, increasing rates of suicide.

What is only alluded to in some of the coverage of this study is the most important point: this is about our society failing its people. It is about the “social determinants of health” writ large. Yes, the direct causes of the increased death rate in this population are alcohol and drug use and depression leading to suicide, and we do need better treatment for these conditions. But to leave it there would be like looking at deaths from lung cancer and chronic lung disease and concluding only that we need better drugs to treat these conditions without considering tobacco. Our society has, for at least four decades, been somewhere between uncaring and hostile to a huge proportion of its people. Where once we were a land of rising expectations, where people who worked hard could expect to have a reasonably good life, this changed beginning in the 1970s. Jobs for those with high school educations started to become rarer, and in the Reagan 1980s, “Great Society” programs that supported the most needy were decimated. (For the record, the “War on Poverty” actually worked; poverty rates went down!)

In the 1990s, economic growth hid the concomitant growth in income disparities. With the crashes of the tech and housing bubbles leading to severe recession in the mid-2000s, the impact of these disparities became apparent. While there were protests in response (e.g., the “Occupy” movement), the banks were bailed out, the wealthy continued to grow wealthier, and working people have seen their jobs, incomes, standards of living, health, and ultimately lives disappear. Only the blind or willfully ignorant could have not seen this coming.

To a large extent, then, this is an issue of class, however much “important people” decry the use of that word. It is also an issue of race, since, as noted, mortality rates for African-Americans (although not for Latino/Hispanics) continue to exceed those of whites; even as they begin to converge, there is still great disparity. Camara Jones, MD, the new president of the American Public Health Association (APHA) uses the term “social determinants of equity” to describe why African-Americans are so over-represented in the lower class.  The current data showing that lower-income whites are moving toward the long-term disadvantaged should not obscure this fact, but rather remind us that white people have had a privilege that is now, for the lowest income, being eroded.

The irony is that many of the people in the groups reported on, and their friends and relatives and neighbors, voted for those in Congress and their states who pursue policies that make their situations worse. That the 1%, or 0.1%, or 0.001% (after all, 153 families have contributed 50% of all campaign donations this year!) like these policies is understandable provided that they are not only rich but selfish, but they alone don’t have many votes. That their money controls votes, both by buying advertising and directly buying politicians, is undeniable. Maybe poor people cannot contribute as much as rich people, but they can vote (most of the time) and there are so many more of them. If we must reject “trickle down”, we must also reject appeals for votes that are implicitly or explicitly racist; lower income white people are not benefiting by voting for the racists.  The lives and health of Americans will be improved by improving the conditions in which they live, by an economy whose growth is marked by more well-paying jobs, not money socked away by the wealthiest corporations and individuals. People, of all races and ethnicities and genders and geographical regions need dignity and opportunity and hope that is based in reality, not false promises.

We need to treat the diseases that affect people and cause rising mortality, but we need to treat the conditions that lead to them even more urgently.