Improving health equity could add $2.8 trillion to GDP by 2040

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Addressing health inequities could add $2.8 trillion to the U.S. economy by 2040, significantly boosting GDP and improving population health, while corporate profits could increase by $763 billion by that time, according to a new Deloitte analysis.

Contending that health equity is a business imperative for payers, providers and other healthcare organizations, the study underscored the need for systemic changes to reduce disparities that disproportionately affect marginalized populations, particularly people of color, low-income individuals and those living in rural areas.

The potential return on investment (ROI) from reducing these inequities could be enormous, with significant benefits for both healthcare costs and overall economic productivity, according to the report.

WHAT'S THE IMPACT?

Disparities in health cost the U.S. economy roughly $320 billion annually, with this figure projected to rise to $1 trillion by 2040 if left unaddressed, according to Deloitte's figures.

The financial burden stems from a variety of factors, including higher rates of chronic conditions, reduced workforce participation and increased healthcare spending on preventable diseases. This aligns with previous findings showing that social determinants of health – such as income, education and access to quality care – significantly contribute to these disparities.

The economic drag of health disparities also affects employers, who face higher healthcare premiums and lost productivity, the authors said. For example, unmanaged chronic conditions and limited access to preventive care can lead to higher absenteeism and presenteeism (when employees work despite health issues), both of which reduce economic output.

Among the key findings is the significant ROI for healthcare organizations that prioritize health equity. By addressing disparities, providers and payers could see a reduction in uncompensated care, fewer hospital readmissions and improved patient outcomes – all factors that can collectively drive down healthcare costs, the report said.

For payers, this may involve rethinking how they design benefits, ensuring that underserved populations have access to necessary treatments and preventive services. Providers, on the other hand, are increasingly adopting value-based care models that emphasize outcomes over the volume of services provided.

The report also highlights the role of technology in reducing health disparities. Telehealth, for example, has the potential to expand access to care for those in remote or underserved areas. During the COVID-19 pandemic, telehealth usage surged, offering a glimpse into how digital tools can help bridge the gap in care delivery. But disparities in broadband access and digital literacy remain significant barriers.

Many health systems are now investing in digital infrastructure to ensure equitable access to these services. Initiatives like expanding broadband access, creating user-friendly platforms, and providing training for digital literacy can all contribute to narrowing the gap, according to the analysis.

The report recommends addressing biases in data and leveraging diverse datasets to help design more inclusive products and services that better meet the needs of underserved populations.

David Rabinowitz, principal, Deloitte Consulting, said technology in medicine and health is at a critical juncture.

"If the data we use is based on underlying biases, then tools and solutions could exacerbate inequities," he said. "This is important to consider across the board in clinical algorithms."

One example is race-based kidney scoring that is based on a biological interpretation of race and can result in Black patients receiving higher functional scores and delaying treatment.

Rabinowitz explained health IT and analytics can also help address gaps in data and result in more useful data and insights to address health equity. For example, FHIR standards and other regulatory tools can expand interoperability, which can bring data sets together including social and environmental data, non-medical drivers of health data, and medical data.

He added the assessment and identification of technology investments should include technology that can support specific communities with significant disparities, like investing in virtual health services to reach people in rural communities who would not otherwise access care.

"ROI for all technology investments should be framed around a broader set of impacts beyond financial metrics that show value," he said. "This could include improvements in experience, access, outcomes, and health equity."

THE LARGER TREND

Last year, the American Medical Association, the Institute for Healthcare Improvement and Race Forward launched Rise to Health, a call to action for providers, payers, pharma and professional societies to make health equity a priority.

Specific actions defined by the coalition include: a commitment to acting for equity, getting grounded in history and the local context, identifying opportunities for improvement, making equity a strategic priority, taking on initiatives, and aligning, investing and advocating for thriving communities.

In a 2022 initiative, the Department of Health and Human Services committed $90 million through the American Rescue Plan to improve data collection in healthcare centers, particularly on social determinants of health. The goal was to reduce health disparities by targeting inequities more effectively, with an eye toward mitigating long-term financial strain.

- Writer Nathan Eddy contributed to this report.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.