Research Update: Health Care Spending Differences by Race and Ethnicity

This week, I’m highlighting recent research looking at differences in health care spending by race and ethnicity. Researchers from the Institute for Health Metrics and Evaluation, Johns Hopkins University, and the University of Michigan, Ann Arbor examined health care spending, health system encounters (like office visits, emergency admissions, and prescriptions), diagnosed health conditions, and self-reported demographic data from 2002-2016 across six dimensions of health care: ambulatory care, emergency care, inpatient care, nursing facility care, dental care, and prescribed pharmaceuticals.

With data from 7.3 million encounters, the researchers estimated spending by race and ethnicity and examined whether per-person spending differences were driven by care utilization or by the price of care at each encounter. The research relied on several data sources: the Medical Expenditure Panel Survey (MEPS), the National Health Interview Survey (NHIS), the Medicare Current Beneficiary Survey (MCBS), and the Disease Expenditure project,

US Health Care Spending by Race and Ethnicity, 2002-2016, JAMA

What it Found:

  • The researchers estimated that total health care expenditures, including spending by private and public insurers and out-of-pocket spending, topped $2.4 trillion in 2016. Of this total, white individuals incurred a disproportionally high amount of health spending relative to their share of the population (72% of spending vs. 61% population share). Hispanic (11% spending vs. 18% population), Black (11% spending vs. 12% population), and Asian, Native Hawaiian, or Pacific Islander individuals (3% spending vs. 6% population) incurred a disproportionately low amount of spending.
  • Per-person health care spending differences between racial groups shrank when accounting for age, with children ages 0-19 having the smallest differences by race/ethnicity. Multiple-race children had the highest per-person spending at $3,816 in 2016, followed by white ($3,423), Hispanic ($2,803), Black ($2,791), American Indian or Alaska Native ($2,677), and Asian, Native Hawaiian, Pacific Islander children ($2,488).
  • Compared to the full population’s average spending in each category, white individuals had higher spending on ambulatory care, dental care, and prescriptions. Emergency care spending among American Indian or Alaska Native individuals was 90 percent above the average, and Black individuals had higher-than-average spending on inpatient care, emergency care, and nursing facility care.
  • Asian, Native Hawaiian, or Pacific Islander individuals and Hispanic individuals both had below-average spending for ambulatory care, nursing facility care, and prescriptions. Asian, Native Hawaiian, or Pacific Islander individuals also had lower spending for emergency and inpatient care, and Hispanic individuals also had lower spending on dental care.
  • These patterns held steady when researchers looked at specific health conditions. White individuals had higher-than-average spending on low back and neck pain, driven by higher spending on ambulatory care and prescriptions for that condition, while Black individuals had higher spending on asthma, cardiovascular disease, cerebrovascular disease, chronic obstructive pulmonary disease (COPD), and hypertension, driven by spending on inpatient and emergency care that ranged between 65-148 percent higher than the average for those conditions.

Why it Matters:

  • The researchers found that differences in utilization drove most of these spending differences, suggesting that below-average spending among Hispanic and Asian, Native Hawaiian, or Pacific Islander individuals —or above-average inpatient and emergency spending among Black individuals— indicate that these groups lack needed access to ambulatory or preventive care.
  • Additionally, the researchers note that higher rates of uninsurance among Black and Hispanic households historically suggest that the resulting greater out-of-pocket financial burdens for these groups may have discouraged utilization of needed health care services as well.