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Socio-economic Disparities in U.S. Healthcare Spending: The Role of Public vs. Private Insurance

Author

Listed:
  • Elena Capatina

    () (UNSW Sydney)

  • Michael P. Keane

    () (UNSW Sydney)

  • Shiko Maruyama

    () (University of Technology Sydney)

Abstract

In the US healthcare system, patients of different socio-economic status (SES) often receive disparate treatment for similar conditions. Prior work documents this phenomenon for particular treatments/conditions, but we take a system-wide view and examine socioeconomic disparities in spending for all medical conditions at the 3-digit ICD-9 level. We also compare SES spending gradients for those covered by private vs. public insurance (Medicare). Using data on adult respondents from the Medical Expenditure Panel Survey 2000-14, we estimate multivariate regressions for individual medical spending (total and out-of-pocket) controlling for medical conditions, demographics, health, and insurance, separately by sex, education, and age. Within age-sex categories, we assess how spending on each condition varies with education (a proxy for SES). In the predominantly privately insured population aged 24-64, system spending for several of the most socially costly conditions is strongly increasing in education (e.g., breast cancer for women and chest symptoms for men). These disparities are not explained by differences in health, insurance status, or ability-to-pay, suggesting they arise due to discrimination. However, we find no positive SES gradients for individuals over 64 covered by the public Medicare program, suggesting that Medicare plays an important role in improving equity.

Suggested Citation

  • Elena Capatina & Michael P. Keane & Shiko Maruyama, 2018. "Socio-economic Disparities in U.S. Healthcare Spending: The Role of Public vs. Private Insurance," Discussion Papers 2018-03, School of Economics, The University of New South Wales.
  • Handle: RePEc:swe:wpaper:2018-03
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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2018-03.pdf
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    Keywords

    Education gradient; Health insurance systems; Healthcare equity; Private and Public health insurance; Socio-economic disparities;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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