Why your health is America's most important asset
Since 1992, the Americans, through the efforts of the U.S. Health and Retirement Study (HRS), have interviewed more than 27,000 individuals over a period of 200,000 hours. Likewise, beginning in the late 1990s, the British put their own study in place. That study, called the English Longitudinal Study of Ageing (ELSA), is directly comparable to the HRS study. The English began collecting data for ELSA beginning in 2002. When scientists began studying the data they found significant differences and similarities.
One of the most important things they noticed was that in a comparison between American and British citizens, White Americans between the ages of 55 and 64, were not as healthy as their English counterparts. In fact, in both countries there is a correlation between health, income and education such that lower incomes and education levels were associated with poorer health. The only disease for which the relation between education and income did not hold true was cancer. However, Americans at the highest income and education levels had rates of diabetes and heart disease similar to the least healthy in England. One study found that Americans had significantly larger waist sizes as compared to the British. When waist sizes were taken into account, approximately three-quarters of the differences for women and 38 percent of the differences in the men can be explained. Researchers found that the differences existed despite the higher cost of U.S. health care expenditures, similar life expectancies in both countries and similar smoking habits.
Why it matters
A study using data from HRS looked at the impact of health events on cumulative household income over a ten year period. Researchers then looked at the impact at 2-year intervals. What they found was that the cost of lost income due to a major health event (cancer, heart condition, stroke and/or lung disease) over an 8-year period was $37,000. The cost due to a minor health event (all other health events) during the same period of time was $8,700. When increased medical expenses were factored in the costs rose to $49,000 and $11,500 respectively. More importantly, researchers did not find that households were ever able to regain the costs associated with those events. (If these numbers seem low, the HRS has only a very low percentage of nursing home residents and those cohorts weren’t included in this study.)
One reason for the impact is that lower income individuals were more likely to leave the work force due to a health event, however, the onset of a major health event from any income level frequently led directly to withdrawal from the work force. In 2002, 20 percent of men and 25 percent of women between the ages of 55 and 64 reported that a health problem limited their work activity. When you incorporate the costs of family members providing care, the HRS study found that the value of care amounted to an estimated $18 billion annually.
On top of the cost to the individual are the corporate and national costs. An article in September of last year, the author, Sarah Kliff wrote that employer-sponsored health plans cost $15,745 annually. When employees miss work because of illness, the cost associated with that runs to $344 billion. Employers spend an additional $232 billion on medical bills and pharmacy costs.
For other reasons, Americans spend so much money on health, consider the following articles:
The high cost of caring for an aging relative
The cost of long term care will take your breath away
The high cost of medications in America