Employers have a bad habit of providing health plans to their employees without engaging in or even thinking about what the root causes of employees’ health problems actually are. This isn’t surprising — even in a time of hypersensitivity to social inequities, employers are rarely informed on what they can do to actively address some of these issues.
But as advisers, we can play a critically important role in helping bring this to their attention and actually do something about it. There’s both a business and moral imperative at play for taking action, and it’s reaching a tipping point that’s hard to ignore.
There’s no shortage of examples to prove this point, which I will detail in this column, the first of a two-part commentary. Let’s start with a 2017 nationwide study of nearly 43,000 employees that compared the utilization of healthcare by income. While the medical costs of those in the highest income cohort were fairly close to the costs in the lowest income cohort, how they spent those dollars differed dramatically.
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When demographics and other characteristics were controlled, employees in the lowest-wage group had half the usage of preventive care, nearly twice the hospital admission rate, more than four times the rate of avoidable admissions, and more than three times the rate of emergency department visits relative to top wage-group earners.
Relatedly, a Federal Reserve survey in 2019 found that 40% of Americans did not have $400 in savings for emergency costs — and yet many of these people end up in health plans with deductibles as high as $6,000 or more. According to the 2020 United Benefit Advisors nationwide survey, the average PPO and HMO deductible in America was $2,000 in-network, and $3,000 for an HSA plan.
UBA also found an average annual health plan cost of $10,736 per employee (including dependents). While the average employee percentage contribution for a governmental employer is 23.4%, it’s 36.4% for construction and agriculture employers that are predominately made up of lower-income workers. While those employees might be able to afford insurance for themselves, what about their dependents?
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My larger point is that the result is often deferred healthcare, potentially leading to serious problems later. A 2021 study by Patientco determined that one third of patients avoided doctor visits due to cost, and 66% of patients would need financial assistance for a claim cost over $1,000. Such problems are exacerbated by a healthcare insurance delivery system that is too complex for even the smartest and savviest among us. The same study found that 52% of patients with a Ph.D. could not understand what was covered in their last bill.
This problem is obviously more pronounced within vulnerable populations. A study of maternal and infant mortality in Florida, for instance, showed a dramatic difference in maternal mortality between white and Black mothers. But Black maternal mortality was cut in half if the birth was handled by a Black physician, who likely has a better idea of the social determinants of health as it relates to the mother.
Noting that more than half of maternal deaths occur after birth, a Commonwealth Fund report argued that “strengthening postpartum care should be a priority.” It went on to explain that while expectant mothers in the U.S. typically see their doctor only once during this crucial time, the World Health Organization recommends that at least four such visits be scheduled in just the first six weeks.
A more pervasive concern is access to proper nutrition, which can have a profound impact on good health. This is much harder to accomplish in a “food desert,” which the U.S. Department of Agriculture defines as “an area where people have limited access to a variety of healthy and affordable food.” In a 2012 report, the U.S.D.A. reported a correlation between food deserts and places with higher poverty rates across both rural and urban settings.
But food is just the start. Research suggests that mortality rates are tied to differences in education, employment, housing, safety, community development and access to quality healthcare. Let’s Get Healthy California notes that these factors can cause someone to die as many as 20 years earlier than others who live just a few miles.
Achieving healthcare equity may seem like a tall order, but it’s absolutely within reach and worth pursuing for the sake of national health and safety. Is there anything employers can do? Be sure to read Part 2 of my commentary, later this week, for some answers.
