Future Health Consequences of the Current Decline in US Household Income

Today's clinicians and health care leaders are perhaps unaware of the decline in household income and the widening of income disparities that are occurring in the United States. The effects of these trends may not become apparent in hospitals or examination rooms until late in the careers of today's physicians or in their children's generation, but the potentially harmful influence on the health care system and, ultimately, on patients deserves attention now.

Income is a significant determinant of health. The connections between poverty and disease have been well documented, but even modest reductions in income among more affluent persons can also influence health. For example, results from the US National Longitudinal Mortality Study indicated that individuals with an income of $25 000 to $49 999 in 1979-1989 had a shorter life expectancy than those with an income of $50 000 or greater.¹ A more recent British study found that people in the fourth income quintile were 29% more likely to report poor health than those in the highest (fifth) income quintile.² Although income reductions and resulting health effects tend to be less severe in the middle and upper classes than the poor, by sheer numbers their subtle economic experience may ultimately exert greater influence on population disease burden.

Income is not the only variable that influences health status. Trends in disease emanate from a variety of factors that include behavioral risk factors (eg, smoking), environmental exposures, access to and quality of health care, and sociodemographic factors other than income, such as education, race, and ethnicity.³ But evidence is persuasive that income—either as a marker or as a causal factor—is among the more powerful predictors of health status.^{3 - 4}

With this in mind, 3 phenomena currently affecting the income of the US population deserve the attention of the health care community: increasing poverty rates, decreasing household income, and widening income inequality.

Although poverty in the United States declined in the 1990s, it resurged after 2000. Between 2000 and 2005, the poverty rate increased from 11.7% to 12.6%. The prevalence of severe poverty (income below 50% of the poverty threshold, or less than $10 000 per year for a family of 4 in 2005) increased by 22.7% (from 4.4% to 5.4%).^{5 - 6} The proportion of families with incomes at least $8000 below the poverty threshold increased by 45.2% (from 3.1% to 4.5%), the proportion of unrelated individuals with this income deficit climbed by 68.2% (from 4.4% to 7.4%), and the mean income deficit for poor families increased by 19.1% (from $6820 to $8125).^{6 - 7} In 2006, the mean income deficit increased further (from $8125 to $8302), although the poverty rate did decline slightly (from 12.6% to 12.3%) and severe poverty declined from 5.4% to 5.2%. These reductions largely reflected improvements for seniors and some minorities; for the 77% of the population composed of children and non-Hispanic whites, the poverty rate did not decline significantly in 2006. Children accounted for 1 of 3 poor persons in the United States. Although poverty rates among black (24.3%) and Hispanic (20.6%) individuals in 2006 were slightly lower than in 2005, they remained 2 to 3 times higher than those of non-Hispanic whites (8.2%).⁷

Except among the most affluent, US household income has decreased. For example, although the total income reported on taxes in 2005 increased by almost 9% for the entire population, income for those below the 90th percentile decreased by 0.6%.⁸ The Federal Reserve Board reported that median “real” household income (adjusted for inflation) increased by 1.6% between 2001 and 2004 but mean income decreased by 2.3%.⁹ According to the US Census Bureau, median real income decreased by 4% between 1999 and 2004; between 2004 and 2006, median income increased by 0.8% for the highest income quintile but decreased in all other categories.⁷

The gap between the rich and poor has widened in the United States, as it has elsewhere in the world. The Gini index, a widely used measure of income inequality, has risen 4.4% in the last decade (from a score of 0.450 in 1995 to 0.470 in 2006).⁷ Between 1952 and 2005, the proportion of pretax income reported by the wealthiest decile of the population increased from 31% to 44%; the greatest gains occurred among the richest 1% of the population (those earning more than $250 000 in 2005), whose share of income increased from 8% in 1980 to 17% in 2005.⁸

Expanding wealth among the affluent helps explain the seemingly contradictory reports of declining household income vs vibrant economic productivity and corporate earnings. Between 2003 and 2006, the nation's gross domestic product increased by 3% to 4% per year,¹⁰ and the stock market reached new heights in 2007. The paradox of a booming economy and falling family incomes is best explained by the concentration of wealth among a small segment of the population, exemplified by high earnings of corporate executives and investors.¹¹ In 2002, median compensation for a corporate chief executive was $33.4 million.¹² Between 1965 and 2001, the ratio between the earnings of chief executives and their employees increased from 26 to 245.¹³

What do these economic trends portend for the future of US health care? If one accepts the premise that income affects health, an expansion in the prevalence of poverty, especially severe poverty, is likely to produce severe health consequences for that population and to stress clinical facilities serving the poor. It would be easy, however, to succumb to the misconception that this threat endangers only a small, highly disadvantaged segment of the US population, such as the 12.3% who live below the poverty threshold.⁷ Rather, because most social classes are experiencing some income loss, the health status of all but the most affluent could be affected.

The increase in poverty and income inequality is troubling on many levels. While there are several familiar and compelling concerns—that it is unjust on moral grounds, that it destabilizes the civic health of the community, and that it could ultimately stifle the economy by inhibiting the development of human capital¹⁴ —the focus herein is that the current decline in US household income is likely to intensify demands on the health care system.

This concern arises from the hypothesis that income reduction will manifest clinically some years later in the form of more frequent and more severe diseases. The science to support this hypothesis is incomplete, and valid data are lacking to predict the outcome of changes in income: how long it will take, the causal pathway, or the effect size. However, accumulating evidence suggests the mechanism by which income reduction might precipitate illnesses. Family budgets are already strained by the rising costs of health care and insurance.¹⁵ Income losses that compel greater stringency, such as limiting or forgoing insurance or medical care,¹⁶ have predictable immediate health consequences, as when patients with heart failure discontinue essential medications because of cost. Delayed consequences are also likely, as when a patient with financial difficulties postpones a colonoscopy and lives a decade longer before developing complications of undetected colorectal cancer.

The effects of income on health behaviors are more insidious, shaping disease trajectories over many decades. It can take a lifetime for smoking, physical inactivity, poor diet, and overweight—risk factors that the poor find more difficult to modify¹⁷ —to progress to clinically overt illnesses, such as coronary artery disease, cancer, and diabetes. The cumulative health effects of reduced income on children are especially protracted.¹⁸ The next generation of physicians will treat diseases that are originating now among young children exposed to unhealthy lifestyles, inadequate medical care, and harmful environments.⁴ Obesity, which may overtake smoking as the leading cause of death,¹⁹ is more prevalent among those with lower incomes.¹⁷

Ripple effects of income on health extend beyond its direct influence on access to care and personal efforts to modify behavioral risk factors. For example, individuals with limited incomes often lack the resources to remove themselves from unhealthy communities, jobs, and schools. They cannot afford to live in neighborhoods where they can exercise safely; shop at markets with healthy food choices; escape advertising for fast foods, tobacco, and liquor; and avoid violent crime. Traveling across town to access better resources or health care facilities is often beyond their means.

Perhaps the most enduring health consequences of income are mediated by education. Parents with limited income are more likely to live in poorly funded school districts, and their children are less able to obtain a college education, a good job, and sufficient earnings to avoid repeating the cycle with their own children.²⁰ Individuals with inadequate education are less likely to have the necessary knowledge and health literacy to successfully modify behaviors, recognize warning symptoms, and manage complex chronic illnesses amid a highly fragmented health care system.²⁰

Widening income inequality, a measure of relative rather than absolute income, may exert an independent effect on health.²¹ Even after adjustment for per capita income and other variables, US metropolitan areas with a steep socioeconomic gradient appear to have higher death rates than areas with more equal distributions.²² To the extent that this gap is harmful to health, the fact that income inequality is increasing is further cause for concern.

These 3 trends—increasing poverty, decreasing household income, and widening income inequality—are harbingers of a future wave of poorer health. Even without declining income, the US health care system faces the extant threat of a surge in the prevalence and costs of chronic illnesses created by an aging population, longer life spans, and more expensive treatments. Government leaders responsible for the Medicare and Medicaid programs and corporate executives who wish to continue offering employer-based insurance are studying options for absorbing the anticipated costs and demands on health care. It is an inauspicious time for the emergence of a new factor—reduced household income—which is poised to heighten disease burden even further.

One policy response is to plan for a larger volume of patients and expand the capacity of the health care system. Such a strategy faces dubious prospects, given the challenges already facing the delivery system in strengthening its infrastructure, training health care professionals, and financing high-quality care amid limited resources and rising costs. Such efforts would likely fall short: the growing impoverished class would swell the ranks of the uninsured and further strain the health care system, enlarging disparities in the quality of care and health outcomes of the disadvantaged.

The alternative is to address economic hardship more directly, a strategy no less formidable and far more contentious, but one with potentially greater returns on investment. Proposals to improve the job market and increase incomes come from across the political spectrum.^{23 - 24} Examples include lower interest rates to tighten the labor market and increase wages, changes in tax policy, trade agreements that ease worker displacement, and an increased minimum wage. Other options include the promotion of New Deal–style “stepping stone” jobs that can lead to jobs with higher earnings, of new job sectors (eg, renewable energy), and of “work bonds” to encourage personal savings.

Although these economic measures could be helpful, education may ultimately hold the greatest promise and figures prominently in master plans to resolve poverty. Globalization and the decline of US manufacturing jobs have fostered a “knowledge economy” in which a living wage is most accessible to those with technological and other skills. Interest is converging on the need for more competitive early childhood, primary, secondary, and college education. Parallel efforts to enhance human capital are also vital. For example, job retraining can focus on marketable skills as well as building contacts and self-discipline. Education reform can address classroom conditions (eg, curricula, teacher quality and salaries, size and organization of schools) as well as the need for improved parenting, enhancing the home environment for learning, and acquiring useful life skills.

Given the influence of social determinants on health, efforts to improve education and income—seemingly unrelated to medicine—have the potential to accomplish more to reduce the severity and costs of major diseases than traditional medical advances.²¹ For example, the prevalence of coronary artery disease among US adults without a high school diploma could decrease by 40% (from 10.1% to 6.1%) if they had the prevalence rate of college graduates; prevalence rates for diabetes and stroke could be reduced by 50% (from 11.9% to 5.9% and from 4.0% to 1.9%, respectively).²⁵ Improved income and education could reshape disease trajectories and medical spending, but their benefits could also extend beyond the health sector to more broadly improve the lives of individuals, communities, and the economy. There are arguments against strategies to improve personal income, and powerful interests that oppose them may ultimately prevail, but then US leaders and the public must be prepared to deal with the diseases and social ills that persistent economic hardship will cultivate.