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Robbing the Poor to Give to the Rich

Since 2004, national healthcare expenditures are becoming more concentrated on the wealthy. (Volume 9, Issue 4)

Soaring health care costs have been a popular topic of discussion in the public arena, even in the midst of a recent spending slowdown between 2004 and 2013. The authors of this study investigated how health care expenditures differed between Americans from different income brackets from 1963 to 2012.

Source: Wikipedia (Creative Commons)

Source: Wikipedia (Creative Commons)

For much of the study period, the lowest income quintiles accounted for the highest health care expenditures. This trend changed, however, in the early 2000s when there was a shift towards increased healthcare spending by the wealthiest Americans. From 2004 to 2012 the poorest quintile’s expenditures fell 3.7% while the middle income quintiles rose 12.5%. and the wealthiest’s rose 19.7%.

During this time period, for Americans older than 65, spending for most income brackets experienced flat growth and the poorest quintile continued to have the highest spending. Thus, the overall shift in healthcare spending from the poorest Americans to the richest was driven in large part to an increase in spending by the wealthiest Americans under age 65, not the elderly or those on Medicare.

By 2012, the wealthiest Americans made 40% more outpatient visits and spent more per visit than other Americans. These spending changes were not due to high-cost patients as was the case for low-income Americans prior to 2004. In fact, expenditures grew for both low- and high-cost wealthy patients and actually fell for both low -and high-cost low-income patients.

As the United States continues to work towards decreasing the nation’s health care expenditures, it remains important to consider how these changes affect all members of our society. This divergence in health care spending between the wealthiest and poorest Americans is concerning for a decrease in access to, and availability of, healthcare for poor. Conversely, perhaps the wealthiest Americans are simply obtaining too much health care – some of it potentially unnecessary – or paying more than is necessary for similar services. Cutting healthcare costs should not be pursued blindly, without consideration of access to needed care, especially for the poor. Future health policy initiatives targeting cost control should be sure to consider this emerging and extremely troubling trend.

commentary by Vidya Eswaran


US medical spending growth slowed between 2004 and 2013. At the same time, many Americans faced rising copayments and deductibles, which may have particularly affected lower-income people. To explore whether the health spending slowdown affected all income groups equally, we divided the population into income quintiles. We then assessed trends in health expenditures by and on behalf of people in each quintile using twenty-two national surveys carried out between 1963 and 2012. Before the 1965 passage of legislation creating Medicare and Medicaid, the lowest income quintile had the lowest expenditures, despite their worse health compared to other income groups. By 1977 the unadjusted expenditures for the lowest quintile exceeded those for all other income groups. This pattern persisted until 2004. Thereafter, expenditures fell for the lowest quintile, while rising more than 10 percent for the middle three quintiles and close to 20 percent for the highest income quintile, which had the highest expenditures in 2012. The post-2004 divergence of expenditure trends for the wealthy, middle class, and poor occurred only among the nonelderly. We conclude that the new pattern of spending post-2004, with the wealthiest quintile having the highest expenditures for health care, suggests that a redistribution of care toward wealthier Americans accompanied the health spending slowdown. PMID: 27385233 

Dickman. Health Affairs. 2016; 35 (7): 1189-1196.

Vidya Eswaran, MD
About Vidya Eswaran, MD

Dr. Eswaran is an Emergency Medicine Resident at Northwestern University in Chicago, IL. She received her medical degree from Baylor College of Medicine. Follow her on Twitter @vidyaeswaran. She has contributed to Policy Prescriptions® since 2014. Contact: Website | Facebook | Twitter | Google+ | More Posts