The Cost of Poverty in Canada - a potential way to reduce health costs

The posting Determinants of Health January 9 2012 had a quick reaction, something that is very welcomed.   The comment that evoked the response was 20-25% of health care costs are directly attributable to income disparities.   Where did this come from?  Is it time this information came to the finance table?  Great questions and thank you.

There are several analyses of health care costs associated with poverty that have been undertaken.   The absolute simplest is recognizing a linear relationship between income and poorer health outcome, whereby those in the lowest income bracket have a relative risk of about 2 which (might be interpreted as the proportional increased costs as well), gives a simple graphic as follows:

For the mathematicians in the audience, the total area under covered by the bars is 7.5 units.  The area covered in excess of a relative risk of 1 is 2.5 units.  Hence to eliminate all inequality by shifting to the status enjoyed by the highest income quintile would result in a 1/3^rd reduction.    If you think a relative risk of 2 is too high -  note that at relative risk 1.5 the potential reduction is still 20% - a relatively conservative estimate for total costs. 

Of course reality isn’t quite so simple,  there are many other aspects that affect the equation.  At a simple level there is not only increased rate of disease, but also differences in cost for ameliorating the effects of a problem, and those in the highest income quintile tend to respond better to treatment as well (the determinants of health should also be seen as the determinants of recovery).   Most analyses of income impacts are limited to studying one of these components, not the combined effect of the three.

Having said this, there are numerous attempts to try to define the “cost of poverty”.  Canada’s tome on the issue is a consultant’s report that is posted to their website, but not identifiable on the sites of the agencies that contacted the work, namely PHAC, Nova Scotia, and BC.  The findings of the 421 page document support the 20-25% number.   The report provides a fairly definitive review on the known consequences of poverty and also critically appraises four reasonably done studies looking at health care costs – however it is notable that the report does not render its own conclusion.  Health costs of poverty in Canada GPIAtlantic      

The report also acknowledges that the costs of poverty extend well beyond the health sector and include at least justice, education, and social services.

So the three deep questions that DrP would ask and welcome comments (or send to drphealth@gmail.com)

1.       Why is the only place this document is posted is that of the consultant and not of the three government agencies that contracted the work?

2.       Since we are relatively good at describing poverty consequences, can we apply this intellect to determining what have been the effective interventions?

3.       Why is the message that poverty is expensive so difficult for some health decision makers to swallow?