Health and Economic Status

Last reviewed: February 2017

Abstract

In many countries, access to health care is dependent on economic status. Even in poor countries, the wealthy and well-educated tend to be healthy, while the poor and marginalized die from diseases and conditions that may have been prevented by immunizations or proper treatment. Less than one percent of all child deaths each year occur in developed countries. Medical research has demonstrated that health in childhood has an impact of an individual’s health throughout his/her life span.

Overview

In 1883, Germany became the first country to offer health care insurance. Over the course of the next three decades, Britain, Sweden, Denmark, France, Switzerland, Austria, Hungary, Norway, the Netherlands, and Russia instituted policies expanding access to health care insurance. The American Association of Labor began the battle for health care insurance in the United States in 1906. The early decades of the twentieth century produced vast improvements in living standards in most developed nations. Life expectancies increased along with greater access to health care, education, good nutrition, and improved sanitation.

In 1910, Montgomery Ward became the first American employer to offer health insurance to its employees. Almost two decades later, a physician in Oklahoma established the first health care cooperative in the United States. Between 1930 and 1960s, a number of health care cooperatives were established by private companies such as Kaiser-Permanente (1942) and by city and state governments. Blue Cross was the first American insurance company to offer private insurance, but it was only available in some states. Over time, health care cooperatives came to be known as Health Maintenance Organizations (HMOs).

By 1935, nineteen companies in thirteen states were offering private health care insurance. That same year, passage of the Social Security Act under President Franklin Roosevelt provided financial assistance to the elderly, the disabled, and widows and dependent children and offered temporary help to unemployed and injured workers. On January 11, 1944, Roosevelt issued his Economic Bill of Rights, which has come to be popularly known as the Second Bill of Rights. The document stated that all Americans have a right to a good job; a living wage; a decent home; access to medical care and economic protection when sick, elderly, or unemployed; and access to a good education. In the United States, health care insurance first became available during World War II. Since wages were frozen, employers began offering improved benefit packages to recruit or retain workers.

Roosevelt had developed a national health care plan, and Truman built on that plan to introduce a universal health care plan on November 19, 1945, only seven months after Roosevelt’s death and Truman’s ascension to the presidency. The Truman plan called for major health care reforms designed to increase access to hospitals and health care professionals and promised to provide federal assistance to underserved areas to build new facilities and attract physicians and nurses. He also proposed optional national health care insurance funded by the federal government and monthly premiums from insured individuals. The American Medical Association strongly opposed the bill, and it was ultimately defeated.

By the mid-twentieth century, access to health care had improved significantly, and the quality of health care had been enhanced by medical advances and more sophisticated technologies. The American economy flourished during the postwar years, and most Americans were able to afford health care insurance through their employers or through private insurance companies. However, the oldest and the poorest segment of the population had failed to prosper at the same rate as other Americans.

Existing disparities in health care were addressed in the mid-1960s when President Lyndon Johnson launched a number of War on Poverty programs that included health care insurance for the elderly (Medicare) and the poor and disabled (Medicaid). Nevertheless, large numbers of Americans continued to lack access to health care or had inadequate coverage because they were not eligible for either Medicaid or Medicare, could not afford private health care, worked for employers with no or inadequate health care benefits, or had conditions that prevented them from obtaining or maintaining insurance. Physicians could refuse to see patients with outstanding bills. Consequently, many Americans turned to hospital emergency rooms where they could not be turned away, and hospitals passed the costs for helping the uninsured on to others by increasing overall hospital costs.

Applications

Throughout the first half of the twentieth century, countries around the world continued to institute universal health coverage, and Democrats in the United States were generally in favor of such an action. However, anti-socialist sentiments intensified during the Cold War, and conservative Americans continued to resist the concept of socialized medicine.

National Health Care in the United States. In 1973, the Nixon administration introduced the Health Maintenance Organization Act that was intended to keep health costs down without providing universal health care. Congress committed $376 million to strengthening HMOs, insisting that improved competition among health care providers would ultimately benefit the American people. Critics of the act argued that it would provide large insurance companies with new ways to increase profits and limit access to health care. At the same time, the growth of large pharmaceutical companies guaranteed that the cost of prescription drugs and medical devices would continue to rise.

The time was considered ripe for another try at health care reform in 1993 when Bill Clinton entered the White House, and he appointed First Lady Hillary Clinton to head up a taskforce charged with developing a proposal for a new national health care plan. The foundation of the plan was the creation of a group of regional health alliances to provide access to health care for all Americans and the establishment of a National Health Board that would have monitored the health care industry. The poor would have paid nothing for coverage. Partisan wrangling and successful lobbying by the health care industry and conservative organizations defeated the bill.

Infant Mortality in Poor Countries. Globally, research on health care suggests that countries with high infant mortality rates are also likely to exhibit low life expectancies, high rates of infectious disease, poor access to improved sanitation, and chronic food shortages. By contrast, nations with low infant mortality rates have high life expectancy, low rates of infectious diseases, improved sanitation, high immunization rates, and good nutrition (Delaney & Smith, 2012).

Infants in the world’s poorest countries die from pneumonia (17%), diarrhea (17%), infectious diseases (12%), neonatal infections (11%), prematurity (11%), low birthweight (7.8%), malaria (7%), maternal sexual behaviors (6.6%), and unsafe water (6.1%). Children in developing countries are made even more vulnerable by such factors as poor nutrition and improper sanitation. A decline in breastfeeding until age two is also believed to have a negative effect on infant health (Delaney & Smith, 2012).

The United Nations made slashing global infant mortality rates a priority of the Millennial Development Goals (MDGs), and global rates dropped from 11.9 million in 1990 to 7.7 million in 2010. However, some seven million children under the age of five continue to die each year chiefly because they are poor and have unequal access to health care.

Throughout the world, unequal access to health care frequently has catastrophic results. This is particularly true in sub-Saharan Africa where around half of all child deaths occur each year. In Ethiopia, for example, where the infant mortality rate in 2016 was 51.1 deaths per 1,000 live births, most children died from diseases such as malaria and measles that could have been prevented with immunizations, rehydration assistance, or medication. E. Gurmu and D. Etana (2016) examined the deaths of Ethiopian infants between the ages of 12 and 23 months, discovering that less than one fourth had been immunized. Poverty is a major factor in many of these deaths, and the best predictors of whether or not children in developing countries will be immunized is the socioeconomic status of the mother, the frequency of media access that dispenses health care news, and regular prenatal visits (Gurmu & Etana, 2016).

Immunization and Nutrition. Access to health care and immunizations may also be unequal in more developed nations. In cultures such as India, the preference for sons results in inferior health care for daughters. Poor families with large numbers of offspring are less likely than other families to immunize all children, and first-borns are more likely than their younger siblings to be fully immunized.

Good nutrition is a major factor in maintaining health, and poverty and malnutrition are highly correlated with high mortality rates. Studies have shown that malnutrition may slow both physical and cognitive development, and students who are malnourished may perform poorly in school because they are unable to concentrate on academics. On the other hand, students who are well-nourished tend to perform well academically. They attend school regularly and are likely to participate in class discussions and activities, play sports, and graduate on time (Masbaño, 2016).

Issues

Marginalized groups in many countries have unequal access to health care. In the United States, a lack of language proficiency and cultural restrictions may erect obstacles to receiving proper health care even among the more affluent. African Americans have a mortality rate that is 1.6 percent higher than that of whites, and this disparity has been consistent since the 1950s. African Americans have higher mortality rates from both cancer and cardiovascular disease than whites and Asians, and they are more vulnerable to being exposed to poor housing and unsafe neighborhoods. Americans in the lowest income quartile have a mortality risk 2.8 times higher than those in the highest income quartile (Zuniga, Marks & Gostin, 2013). Income and educational levels are highly correlated with mortality rates, and African Americans (24%) and Latinos (21%) are more likely to be poor than whites (9%). They also have lower levels of education, with 31 percent of whites obtaining college degrees as compared with 17.3 percent of African Americans and 11.4 percent of Latinos.

In the twenty-first century, many countries have instituted health care reform packages designed to make access to health care more equal. Mexico stands as an example of a country where reform has been both popular and successful. Access to health care had been declared a constitutional right in 1983, but half of all Mexicans had no access to health care in 2003 (Frenk & Gómez-Dantés, 2015). The government addressed the issue with passage of the General Health Law in 2003, which employed a three-tier approach that embraced technical, political, and ethical aspects designed to address such issues as widespread poverty and high rates of maternal malnutrition. The reform was successful in large part because it was supported by government officials, politicians, political parties, and unions.

Contrarily, the United States is the only developed nation in the world that does not offer universal health care to its citizens, and many less developed nations also offer universal health care. In the United States, access to health care is provided on the basis of supply-side economics that allows insurance companies to emphasize profits over health care (House, 2014). This policy has also allowed insurance companies rather than physicians to make medical decisions, and insurers have denied health care coverage to those who could not afford it, who had preexisting conditions, or who had major diseases or conditions that exhausted arbitrary caps established by insurers. House (2014) maintains that in the 1950s, the American health care system was one of the best in the world. At that time, life expectancy was high, infant and maternal mortality rates were low, and there was widespread access to health care and good nutrition.

In the twenty-first century, the United States spends more on health care than any other nation in the world. In 2014, 17.1 percent of the national budget was allotted to health care, and that figure was three times the amount spent in 1960. When state allotments for health care are added to the national allotment, it results in government health care expenses of more than a trillion dollars each year. Critics note that one reason that American health care costs are so high (around $300 billion spent each year) is that 480,000 people die each year from cigarette smoking. More than 40,000 of those who died of tobacco-related illnesses were not smokers themselves. Drug pricing is also blamed for out-of-control rises in health care costs. For example, in 2016, a major scandal erupted over the cost of Mylan’s EpiPen, a livesaving device relied upon by people with serious allergies, when it was learned that the cost of the product had risen 500 percent since 2007.

Obamacare. President Barack Obama made health care reform a major priority, and Congress passed the Patient Protection and Affordable Care Act in March 2010. The plan, better known as ACA, or Obamacare, was designed to expand Medicaid and make health care available and affordable to all Americans by creating a marketplace in which the non-insured could buy into the system through plans based on individual income levels. ACA was expected to provide insurance coverage to two-thirds of those who were previously uninsured. The act also prevented insurance companies from denying coverage due to preexisting conditions, abolished caps on lifetime coverage for all individuals, and allowed dependent children under 26 to be covered on their parents’ insurance. Despite repeated conservative efforts to derail the plan, the Supreme Court upheld the act on two separate occasions.

Under ACA, the federal government pledged to cover 100 percent of Medicaid expansion for 2014, 2015, and 2016. After 2020, 90 percent of costs will be covered. States maintain the right to determine whether or not to expand access to Medicaid. By January 2016, states that had opted not to expand Medicaid included Alabama, Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming. Large numbers of Americans continue to be uninsured in these states.

In addition to socioeconomic factors, access to health care may be influenced by political ideology. In some countries, governments are run by political parties that have virtually total control of relevant decisions. In others, the party that holds the majority of legislative seats can block policies of the minority. In the United States, for example, Conservatives argue that the poor should be held responsible for their own situations, and they fail to pass social legislation, limit access to assistance programs, and cut funding for existing programs. Liberals are more likely to pass policies that benefit the poor and broaden access to health care, even when it means raising taxes. Under Obamacare, 90 percent of health care insurance for households made up of those under the age of 65 who earn less than 138 percent of the poverty line is paid for by the government (Baker & Hunt, 2016).

Terms & Concepts

Conservatives: Individuals who support the notion of limited government. In the United States, conservatives lean toward policies that support big business, including insurance and pharmaceutical companies, and oppose large entitlement programs, such as universal health care.

Liberals: Individuals who believe that the government has an active role in improving the lives of people. In the United States, liberals favor action by the national government to support social programs.

Medicaid: Federal program established in 1965 to provide access to health care to poor, disabled, pregnant, and chronically ill Americans. States control access to Medicaid by determining eligibility and establishing payments. As a result, benefits may vary greatly from state-to-state, with the wealthiest and most liberal states providing the greatest benefits.

Medicare: Health care program designed to provide the elderly with access to health care. The Medicare program was created in 1965, and it was improved in 2003 with the Medicare Prescription Improvement and Modernization Act. An update in 2006 provided access to optional drug assistance programs, and low-income elderly may be eligible for government assistance in purchasing a drug plan.

Millennial Development Goals: Established by the United Nations in 2000, the eight Millennial Development Goals (MDGs) are committed to improving the quality of life for the poorest people of the world through such efforts as eradicating poverty, reducing infant and maternal mortality, and improving access to health care. Although many countries failed to meet the target date of 2015, significant progress has been made in virtually all areas.

Rehydration: Process of replacing fluids lost during bouts of prolonged or intense diarrhea. In developing nations, thousands of children die because their parents or caregivers do not understand the rehydration process. Consequently, UNICEF and other international organizations have attempted to educate populations in developing countries about the dangers of dehydration, and they dispense life-saving rehydration fluids to the poor.

Socioeconomic Status: An individual’s status within society that is based on such factors as income and educational levels, occupation, and community of residence. In some societies, religion and ethnicity may be major factors in determining social standing. Persons of higher socioeconomic status tend to be healthier than others because they have greater access to health care and good nutrition.

Bibliography

Adams, L. V., & Butterly, J. R. (2015). Diseases of poverty: Epidemiology, infectious diseases, and modern plagues. Hanover, NH: Dartmouth College Press.

Baker, A. M., & Hunt, L. M. (2016). Counterproductive consequences of a conservative ideology: Medicaid expansion and personal responsibility requirements. American Journal of Public Health, 106(7), 1181–1187. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=116097693&site=ehost-live

Delaney, L., & Smith, J. P. (2012). Childhood health: Trends and consequences over the life course. Future of Children, 22(1), 43–63. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=75184691&site=ehost-live

Frenk, J., & Gómez-Dantés, O. (2015). Ethical and human rights foundations of health policy: Lessons from comprehensive reform in Mexico. Health and Human Rights: An International Journal, 17(2), 31–37. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=112088320&site=ehost-live

Gurmu, E., & Etana, D. (2016). Factors influencing children’s full immunization in Ethiopia. African Population Studies, 30(2), 2306–2317. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=116929897&site=ehost-live

Hausman, D. M. (2015). Valuing health: Well-being, freedom, and suffering. New York, NY: Oxford University Press.

House, J. S. (2014). Beyond Obamacare: Life, death, and social policy. New York, NY: Russell Sage Foundation.

Masbaño, N.L. (2016). Linking academic achievement and nutritional status of secondary school students. Journal of Asian Regional Association for Home Economics, 23(2), 61–68. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=116701653&site=ehost-live

Walraven, G. E. L. (2011). Health and poverty: Global health problems and solutions. Washington, DC: Earthscan.

Zuniga, J. M., Marks, S. P., & Gostin, L. O. (Eds.). (2013). Advancing the human right to health. Oxford, UK: Oxford University Press.

Suggested Reading

Loh, D. A., Moy, F. M., Zaharan, N. L., & Mohamed, Z. (2015). Disparities in health-related quality of life among healthy adolescents in a developing country—The impact of gender, ethnicity, socio-economic status and weight status. Child: Care, Health & Development, 41(6), 1216–1226. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=111382469&site=ehost-live

Meijer, E., Gebhardt, W. A., Van Laar, C., Kawous, R., & Beijk, S. C. (2016). Socio-economic status in relation to smoking: The role of (expected and desired) social support and quitter identity. Social Science & Medicine, 162, 41–49. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=116907731&site=ehost-live

Mode, N., Evans, M. K., & Zonderman A. B. (2016). Race, neighborhood economic status, income inequality and mortality. PLoS ONE, 11(5), 1–14.

Poole, R., & Higgo, R. (2014). Mental health and poverty. Cambridge: Cambridge University Press.

Roxburgh, S., & Bosich, P. (2015). Social support and perceived mental health by race/ethnicity, gender, and socio-economic status: Is social support more salient for african american well-being compared with white Americans? Conference Papers—American Sociological Association, 1–15. Retrieved October 23, 2016, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=111786068&site=ehost-live