Resolution on Inequality and Health: Background
We as family physicians treat patients in the context of their lives outside our exam rooms, and we can choose to advocate for societal changes that will improve health. Three areas in particular have a strong impact on health outcomes: income inequality, tax structure, and educational status. Negative trends in all three areas in Washington State pose a significant threat to our health. Though the three are often pitted against each other in budgetary discussions, this resolution will present a unified approach to improving all three areas, and in so doing, significantly improve the health of our patients.
Income inequality correlates with poor health outcomes.1-9 Greater equality correlates with better health, and not just for the poor, but for all members of a society. Studies that compare areas on a gradient of low to high income inequality consistently find a strong correlation with better to worse health, respectively. This relationship has been demonstrated in a variety of settings, including comparisons of low-inequality to high-inequality countries and states. One of the findings of this research is that among developed nations the degree of income inequality (having a larger “gap” between rich and poor) is a more accurate predictor of health outcomes than is the actual average income of a country or state. On average, areas of high income inequality suffer from three to ten times worse outcomes compared to areas of low income inequality.1
Furthermore, there is a body of peer-reviewed evidence published in respected scientific and medical journals that finds that this association holds across a wide variety of health measures.1-9 These measures include child well-being, drug abuse, education and educational performance, incarceration rates, mental health, a host of physical health measures including lifespan and infant mortality, degree of social mobility, teenage birth rates, and violence and homicide rates. Serum biomarkers of inflammation have even been studied as well.9 All indices measured have better outcomes in settings of greater equality.
Local, state, and national tax structure can serve to alleviate or exacerbate the effects of income inequality.10 Tax structure also directly impacts spending on education. Educational status is strongly associated with health outcomes,11-14 and this association is even stronger in areas with a steeper income inequality gradient.1 In other words, if one lives in an area with a bigger gap between rich and poor, having a better education is even more important for good health.
The U.S. ranks at or near the bottom in income inequality among developed nations. As predicted by the inequality-health relationship, it ranks 30th out of 30 in health outcomes.1 How does Washington State fare within the U.S.? It is illustrative to compare Washington with our neighbor, Oregon.
Among the 50 States, Washington ranks 16th best in income equality, and ranks even nearer the top (13th, at $56, 835) in median income15…but is absolute worse in fairness of tax structure.16 Here, “fairness” is the degree to which taxes are progressive (rate increasing proportionately with income) rather than regressive (rate decreasing as income rises). In Washington the tables are upside-down: The poorest 20% of earners pay 17% of their income in taxes while the richest 1% pay only 2.8%. While still managing to come in at 13th best for health outcomes,17 our State ranks 28th in K-12 public school revenue per pupil, and 46th—only 4th from the worst—in school revenue per personal income.1 This is a drop from just 20 years ago, when Washington ranked 17th and 24th in these two measures. Over the same time period our ranking in high-school graduation rates fell from 20th (with a 78% graduation rate) to 37th (with 73.7%). We now rank 47th in the percentage of young adults enrolled in college.18 Given the degree to which educational status predicts health, these are worrisome trends.
Our neighbor to the south tells a different story. At first blush, Oregon might seem our twin, tying us at 13th best for health outcomes, but a closer look reveals a very different trajectory. Although coming in $10,000 lower for median income (31st in ranking, at $46816), rating worse for income equality (23rd), and even having a much higher poverty rate (37th in ranking with 17% poverty compared to Washington’s 21st in ranking with 14%),15 Oregon has the 4th fairest tax structure in the U.S.16 While spending only slightly more on education per pupil, Oregon has raised its high-school graduation rate from 33rd (70.8%) in 1990 to 27th (76.5%) in 2012, almost exactly opposite Washington’s course.17 Paralleling this educational improvement, Oregon has seen its health outcomes rise from 28th best in the nation in 1990 to its current standing at 13th. Washington, after enjoying a brief rise upwards from 14th best in 1990, fell steadily backward, ending up again at 13th in 2012. The two states’ tax structures appear to play a major role in their ranking.
Contrary to popular media portrayal, tax levels overall are at historic lows.1 At a time when a “budget crisis” pits cuts in education against healthcare, it is important to remember that both State and national taxes collected per $1000 of income have fallen to their lowest level in 50 years. Washington’s rate of collection is well below even the national average.
Why does Washington rank 50th out of 50 States in fairness of tax structure, and what implications does this hold for our future in terms of education, equality and health? A report from the nonpartisan Economic Opportunity Institute titled “House of Straw” details how our current tax structure worked well when it was designed, in the 1930’s.10 As one of only seven states lacking an income tax, Washington relies on its sales tax to provide 48.8% of General Fund spending. In 1930 the majority of state economic activity fell under taxation from the sales tax and provided for our educational, transportation, and public health and safety needs. Since then we have shifted to a largely non-taxed service economy; the tax base relative to the needs of our growing population has shrunk considerably. In 1979, when the sum of personal income was just under $50 billion, taxable retail sales represented 56% of that sum. By 2010 they made up only 35%. During that time, personal income grew more than six-fold to over $300 billion, while taxable economic activity grew to barely over $100 billion—meaning that more than $200 billion of our State’s economic activity goes untaxed.
These untaxed economic gains have gone almost exclusively to the super-rich.10 From 1979 to 2007 the income of the wealthiest 1% of Americans went up 275%, compared to a meager 18% increase for the poorest fifth. And in Washington State, as above, the poor shoulder an undue tax burden as a percentage of their income. Everyone buys bread, clothes, a car. Beyond that, the richer you are, the less of your income goes to taxable goods.
Taken together, the effects on health outcomes of poor and falling investments in education and the most regressive tax structure in the U.S., against a background of a high level of income inequality and falling public revenue at the national level, present a formidable threat to the health of our patients in Washington.
Importantly, areas that achieve good health outcomes matched with low levels of income inequality do so through a variety of means. These range from high levels of redistribution through spending on social programs, as in Sweden or Minnesota, to low social spending but also a low level of pre-tax income inequality, as in Japan or New Hampshire.2 Areas with poor outcomes are often beset by the dual challenges of low spending on social programs as well as high income inequality, as in Washington State.
A final note is that addressing income inequality represents perhaps the single most cost-effective approach to improving health outcomes, in sharp contrast to spending more on healthcare. The U.S., largely driven by an inverted pyramid of high-cost specialty care, spends more per capita than any country in the world, yet falls behind 29 other countries in terms of health outcomes.2 While shifting costs within healthcare to invest more in primary care has been shown to improve outcomes, simply spending more in total is in fact associated with worse outcomes.19,20
Family medicine is primarily focused on the health of the individual. At the same time, each individual presents in the context of his or her environment, and to offer medical treatment void of that context can be costly, inefficient, and ineffective. If as physicians we have the opportunity to positively impact our patients’ contextual environment and thereby better their health, we should seize that chance.
Resolution on Inequality and Health
WHEREAS, family physicians treat patients within the context of their broader lives, and,
WHEREAS, increased income inequality correlates consistently and strongly with worse health outcomes for all citizens across a wide range of measures studied,1-9 a regressive tax structure further exacerbates the negative health effects of income inequality,10 and lower educational status correlates with worse health outcomes,11-14 and,
WHEREAS, among developed nations the U.S. has a high level of income inequality1,15-16 and poor health outcomes1 despite high spending on healthcare,19-20 and,
WHEREAS, within the U.S., Washington State has a shrinking tax base10, ranks 50th out of 50 in fairness of tax structure15-16, 46th in spending on K-12 education10 and 47th in young adult college enrollment rates18, and, has fallen in our health outcomes ranking despite a high per capita income17 , and,
WHEREAS, Washington State’s high income inequality, regressive tax structure, and low relative education levels all are associated with worse health outcomes of all of our citizens, therefore, be it
RESOLVED, that the Washington Academy of Family Physicians shall support reforms at the national and state level which reduce income inequality, and,
RESOLVED, that the Washington Academy of Family Physicians shall support reforms in Washington State which increase tax fairness, where fairness is defined as the degree to which taxes rates increase proportionately with income, and,
RESOLVED, that the Washington Academy of Family Physicians shall support reforms in Washington State which increase spending on public education through funding from new tax sources rather than from any cuts to existing programs.
REFERENCES
1. Pickett, Kate and Wilkinson, Richard. The Spirit Level: Why Greater Equality Makes Societies Stronger, Bloomsbury Press; Reprint edition 2011, ISBN-10: 1608193411
2. Wilkinson RG, Pickett KE. Income inequality and population health: a review and explanation of the evidence. Soc Sci Med. 2006 Apr;62(7):1768-84. Review. PMID: 16226363
3. Bezruchka S. Income inequality and population health. Hierarchy and health are related. BMJ. 2002 Apr 20;324(7343):978. PMID: 11965671
4. Bezruchka S, Namekata T, Sistrom MG. Interplay of Politics and Law to Promote Health: Improving Economic Equality and Health: The Case of Postwar Japan. Am J Public Health. 2008 April; 98(4) PMCID: PMC2376982
5. Kondo N, Sembajwe G, Kawachi I, van Dam RM, Subramanian SV, Yamagata Z. Income inequality, mortality, and self rated health: meta-analysis of multilevel studies. BMJ. 2009 Nov 10;339:b4471. Review. PMID: 19903981
6. Spencer N. The effect of income inequality and macro-level social policy on infant mortality and low birthweight in developed countries--a preliminary systematic review. Child Care Health Dev. 2004 Nov;30(6):699-709. Review. PMID: 15527480
7. Sengoelge M, Elling B, Laflamme L, Hasselberg M. Country-level economic disparity and child mortality related to housing and injuries: a study in 26 European countries. Inj Prev. 2013 Feb 12. PMID: 23403852
8. Granados JA. Health at advanced age: social inequality and other factors potentially impacting longevity in nine high-income countries. Maturitas. 2013 Feb;74(2):137-47. PMID: 23276601
9. Clark CR, Ridker PM, Ommerborn MJ, Huisingh CE, Coull B, Buring JE, Berkman LF. Cardiovascular inflammation in healthy women: multilevel associations with state-level prosperity, productivity and income inequality. BMC Public Health. 2012 Mar 20;12:211. PMID: 22433166
10. Watkins, Marilyn. House of Straw: How Washington’s tax structures undermines our economic future—and how to fix it. Economic Opportunity Institute, Oct. 2012. http://www.eoionline.org/tax_reform/reports/house-of-straw-wa-tax-structure-oct12-web.pdf
11. Cutler DM, Lleras-Muney A. Education and Health: Evaluating Theories and Evidence. 2006. Natnl Bur Econ Reseach working paper No. 12352. http://www.nber.org/papers/w12352
12. Fiscella K, Kitzman H. Disparities in academic achievement and health: the intersection of child education and health policy. Pediatrics. 2009 Mar;123(3):1073-80. Review. PMID: 19255042
13. Backlund E, Sorlie PD, Johnson NJ. A comparison of the relationships of education and income with mortality: the National Longitudinal Mortality Study. Soc Sci Med. 1999 Nov;49(10):1373-84. PMID: 10509827
14. Braveman P, Barclay C. Health disparities beginning in childhood: a life-course perspective. Pediatrics. 2009 Nov;124. PMID: 19861467
15. Ojha H, Weber M, Syzmanski C. The unequal state of America: Data Interactive, SOURCE: 1990 Census; 2000 Census; 2006-2011 1-year American Community Survey. http://www.reuters.com/subjects/income-inequality/list
16. Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. Institute on Taxation & Economic Policy, January 2013. http://www.itep.org/pdf/whopaysreport.pdf
17. America’s Health Ranking: United States Overview 2012. Source: State-Based Health Surveys; US CDC; US Census Bureau. Accessed Feb. 2013. http://www.americashealthrankings.org/ALL/2012
18. America’s Health Ranking: United States High School Graduation Rate (1990 - 2012). SOURCE: National Center for Education Statistics. Accessed Feb. 2013. http://www.americashealthrankings.org/ALL/Graduation/2012
19. Shi L. Primary care, specialty care, and life chances. Int J Health Serv. 1994;24(3):431-58. PMID: 7928012
20. Gawande, Atul. The Cost Conundrum: What a Texas town can teach us about health care. The New Yorker, June 2009.
