While high-wage earners spend the most, per patient, on healthcare in the United States, it may surprise you that the lowest-wage workers are the next biggest spenders. Those in the middle income brackets, meanwhile, are the least likely to misuse and overuse healthcare services, according to a new study published in the Journal of Health Affairs.
The lowest earners accounted for half the usage of preventative care, nearly twice the hospital admission rate, more than four times the rate of avoidable readmissions, and more than three times the rate of emergency department visits compared to the highest earners.
High-deductible health plans, which cover nearly 30 percent of the workforce (and which are growing in popularity), represent a sizeable portion of the cost shift to employees, the study found. While those plans may seem attractive to low-wage earners due to their more affordable premiums, they might also create financial barriers for those same earners because of the considerable out-of-pocket costs they face until the deductibles are met.
The financial challenges are compounded for low-wage workers because of the higher prevalence of unhealthy lifestyle behaviors and chronic conditions among them compared to higher-wage workers, the authors said. That increases their need for healthcare, and the cost. They’re also more likely to be paid hourly and to have fewer days off to seek medical care, and confront other challenges such as lack of transportation, stable housing and access to providers.
Low-wage workers have been particularly affected by employers’ healthcare cost containment efforts, the study found. Cost shifting in benefit design has resulted in a 67 percent increase in deductibles since 2010, which is six times more than the rise in workers’ wages (10 percent) and general inflation (9 percent). Perhaps related, financial challenges are now the most prevalent source of employee stress — ahead of work issues, family concerns and personal health.
When it comes to utilization patterns, low-wage earners seem to have a more reactive approach to healthcare, perhaps as a result of either necessity or choice. It has led to substantially greater emergency department use and fewer preventive visits, along with a significantly greater number of ambulatory care-sensitive hospitalizations, relative to their higher-paid counterparts.
In contrast, higher-wage earners had higher healthcare utilization rates for nearly all outpatient categories, along with comparatively lower hospitalization rates. With their greater use of preventive and outpatient services, they appeared to be addressing health concerns before they became serious, therefore avoiding either emergency department or inpatient care.
Finding solutions is a tricky proposition, the authors said. But possible interventions include evidence-based care for chronic conditions as a pre-deductible covered service, either through legislation or benefit design. Such approaches would increase access for workers at all wage levels, although with the risk of increasing near-term benefit expenditures.
Alternatively, a shift in employer health-related incentive strategies to disproportionately reward low-wage workers might also promote more appropriate use of healthcare services, the authors said. And the use of wage-based deductibles may help reduce the out-of-pocket spending burden for low-wage workers.