Impact

Improving Health Outcomes

The United States is known for spending the highest proportion of its gross domestic product on healthcare among western peers, according to research by the Commonwealth Fund. Despite the expense, however, American healthcare ranks at the bottom of these 11 countries on performance measures observed by the Organization for Economic Cooperation and Development and the World Health Organization.

These observations of healthcare quality are based on five core areas: ​​access to care, the care process, administrative efficiency, equity and health-care outcomes. The high performers stand apart from the United States primarily in providing universal coverage and removing cost barriers, investing in primary care systems to reduce inequities, minimizing administrative burdens, and investing in social services among children and working-age adults.

The exorbitant costs for medications, the rising costs of healthcare premiums, the persistence of low-quality care, or the inability for many to even afford healthcare are all uniquely American problems. Direct cash policies implemented at the federal level can play a pivotal role within the existing framework of healthcare in the United States by lowering cost barriers and improving health outcomes as a result.

The American healthcare system places an enormous burden on economically disadvantaged citizens. Throughout the past decade, health insurance costs have increased 55 percent, with a notable increase of four percent occurring in 2020. Due to the private nature of health insurance, the federal government cannot dictate the cost of premiums or deductibles that insurance companies establish.

While the Affordable Care Act increased accessibility into the health insurance marketplace, the costs of healthcare are still unreasonably high for millions of Americans. A study published by JAMA illustrated that 11 million Americans experienced catastrophic medical expenses or spent 40% or more of their income after housing and food-related costs. Furthermore, privately insured Americans represented more than half of that number. With the large premiums, high cost of service, and a significant portion of Americans unable to afford an unexpected $500 expense, many are finding themselves in financial peril. Medical expenses are the nation’s top cause of individual bankruptcy, according to the American Public Health Association.

The impact of direct payments has already been exemplified with the last two rounds of stimulus payments. An analysis conducted by the University of Michigan illustrated that food insufficiency fell by 40 percent, financial instability by 45 percent, and adverse mental health problems by 20 percent, all within five months. Decreasing food insufficiency and financial instability can narrow the American health-poverty gap, with poverty long being recognized as a contributor to poor health outcomes. 

For many economically disadvantaged Americans, the cost of healthcare forces them to forgo primary care altogether. In these instances, the emergency room becomes the source of medical care, as medical issues which would otherwise be treated with preventative care go undiagnosed, untreated, or self-treated. About 30 percent of emergency department visits among patients with common chronic conditions are potentially unnecessary, leading to $8.3 billion in additional costs for the industry. By supplementing income with direct cash, citizens become more likely to access primary and preventative care, thereby reducing the number of Americans who neglect medical issues, reducing the burden on emergency rooms in American hospitals and preventing the high expenses of emergency room visits for the patient.

Direct cash transfers also reduce food insufficiency and improve nutrition among its recipients. A U.S. Census Bureau survey found that within the first month of Child Tax Credit payments, recipient households with adults and children experienced a 24% decrease in food insufficiency. Similarly, studies of the Earned Income Tax Credit have shown that additional income provided by the policy supported more nutritional food choices by lowering financial barriers to healthy food options. EITC recipients were more likely to spend more on fresh fruit and vegetables, meat and poultry, and dairy products during the months when most refunds are paid. These behavioral changes enabled by added income allow recipients of direct cash to reduce the unhealthy meals commonly associated with low-income circumstances and life in food deserts, and instead benefit from long-term health benefits of a more well-rounded diet. The resulting benefits can include healthier metabolism and prevention of chronic metabolism-related illnesses such as diabetes.

Humanity Forward’s legislative successes on direct cash policies have a direct impact on American citizens’ ability to access primary and preventative care, as well as healthier lifestyle choices that can indirectly reduce the costs of healthcare. Successful passage of economic impact payments in December 2020 and March 2021 and implementation of the monthly expanded Child Tax Credit have afforded millions of Americans with supplementary income which can lower the cost barriers to accessing healthcare and increase access to healthy nutritional options that can improve health outcomes.