Is Healthcare More Expensive in Black Neighborhoods?

By Ashleigh Knowles on Feb 29, 2024.

Fact Checked by RJ Gumban.

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There is ample data-based evidence to suggest that the black community is at a significant disadvantage when it comes to healthcare in the United States. Data highlights that the U.S economy has harmed black citizens with its racial disparities and has yet to encounter a massive overturn in how healthcare is accessed within the community. It’s a systemic misstep that leaves many black citizens struggling to access basic healthcare necessities and care in 2022. 

Not only does this strongly affect black neighborhoods, but it also affects the health industry as a whole. Regardless of your position, the numbers are irrefutable, with racial disconnect causing an economic burden of over $35 billion annually. This also includes $200 billion in premature deaths and $10 billion in illness-related productivity loss.

This is especially important when taking the recent COVID-19 climate into consideration. Despite African Americans making up 13% of the U.S population, they made up for 21% of deaths. This translates to a mortality rate of 1.5 times higher than other ethnic American groups. 

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Why does this happen?

A major contributing factor to the reason healthcare tends to be more expensive in predominantly black neighborhoods is accessibility. 

For instance, in a University of Michigan study, published in the Journal of the American Geriatrics Society, the research found that the cost of the last six months of life under the Medicare healthcare insurance system for patients is $7,100 more expensive for black people. This translates to 20% more than the cost for a white person, which is considerably staggering. 

The racial composition of neighborhoods significantly influences the use of healthcare due to its impact on health provider supply. According to a PubMed research study, based on the 2006 Medical Expenditure Panel Survey and the 2000 Census,  fewer health providers were located in minority neighborhoods. This was revealed to be largely due to low reimbursement rates for providers. 

Hospital location is a major player in how price is located, as many healthcare options are curated in response to residential segregation. For instance, studies have shown that it is statistically more likely for hospitals with better quality care, more advanced equipment and technology, as well as staff with greater expertise, to be placed in areas where reimbursement is higher. In black neighborhoods, there tends to be 60% more reliance on community-based healthcare providers due to the resulting lack of primary care within the residential area. Evidently, there is less incentive for large healthcare providers to base themselves within black neighborhoods. 

Hospitals serving the largest share of black Medicare patients saw $283 lower mean per patient day revenue than other hospitals from 2016 - 2018, which also equates to $111 less mean per patient profit. These numbers translate to a 21.6% lower average reimbursement rate. This is in comparison to white neighborhoods, where there are typically higher proportions of individuals who are insured and are able to pay for services out-of-pocket. 

The National Academy of Medicine (formerly recognized as the Institute of Medicine), released a report in 2005 that identified that racial and ethnic minority groups receive lower quality care for higher costs when compared to predominantly white neighborhoods. The black community, specifically in impoverished areas, is less likely to have access to appropriate cancer, cardiac, kidney, and AIDS type care than white people. A further study highlighted that 400 hospitals across the United States had black patients receiving older and more conservative treatments. Over time, this  contributes to higher costs due to treatment inefficacy. 

Naturally, there are several other significant factors of consideration that contribute to higher expenses in black neighborhoods, which include the following:

  1. Commute costs: It can be significantly more expensive for black people to access healthcare, as due to residential segregation, the appropriate hospitals are not closely approximated. Black citizens are more likely to fork out greater costs in order to travel to their appointments at hospitals that are able to provide the right care.
  2. Insurance barriers: Many people within particularly poverty-stricken areas do not have access to insurance, with lower income levels not fulfilling insurance eligibility criteria. Several states have not expanded their Medicare coverage, with around 30 million black people remaining uninsured. This means healthcare comes at an inevitably higher cost, which can set back communities from receiving the care they need. 
  3. Higher health risks: There is ample evidence to suggest black citizens have a higher predisposition to certain health conditions, such as diabetes. Statistics emphasize the need for greater healthcare at lower costs so that high-quality treatment and effective care are both accessible and affordable.

Do specific places face greater health expenses for the black community?

As an established fact that predominantly black communities and neighborhoods face higher health costs than predominantly white neighborhoods, the question arises as to whether there are specific black neighborhoods that are at risk. While data does not highlight specific towns or cities in the United States, there are notable states where black neighborhoods may face higher challenges than others. Data from the most recent 2021 Commonwealth Fund analysis presents the following findings. 

Worst States for Healthcare in Black Communities

Oklahoma was ranked as the worst state to receive healthcare in the United States for black people, with a health score of 6/100 based on health performance, access to care, and the quality of healthcare services. Mississippi closely followed this with 8/100, and Missouri with 9/100. These states are likely to see higher costs due to medical inefficiency and lack of access. For each of these states, care for white people was ranked considerably higher by at least 60%. 

Best States for Healthcare in Black Communities

Rhode Island was the highest performing at 80/100, with this followed by Massachusetts at 70/100, and Maryland 64/100. It’s important to note that these states were still higher performing for white people by at least 10%, with greater access and quality of care that require fewer expenses.

These rankings have also failed to improve within the previous 5 years, and have worsened in multiple states in comparison to data from 2018

Concluding thoughts

Statistics and data strongly suggest underlying discrimination within black communities that set them at an obvious disadvantage when it comes to accessing affordable healthcare. Evidence highlights that it is more likely that healthcare costs are higher in predominantly black neighborhoods in comparison to predominantly white neighborhoods. There are a multitude of factors that contribute to this, including residential segregation, insurance coverage, and income levels proportionate to geographic areas. 

Further analysis of socioeconomic and demographic levels may reveal more inequalities and injustices when it comes to healthcare, and consequently, more positive notes on where to start making amends. As a takeaway, health practitioners and professionals must be aware of such foundational injustices that can contribute to different treatment and perceptions of healthcare. They can affect your operations, patient interactions, experience, and most importantly; the future of the industry. 

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