BACKGROUND PAPER 

Health Differentials 

Between White 

and Nonwhite Americans 

September 1977 

Congress of the United States 

Congressional Budget Office 

Washington, D.C. 

HEALTH DIFFERENTIALS BETWEEN WHITE 

AND NONWHITE AMERICANS 

Congress of the United States 

Congressional Budget Office 

For sale by the 8uperlntendentof Documents, U.8. Government Prlnting Ofece 

Washington, D.C. 20402 

NOTE 

Throughout this paper, unless otherwise noted, the term white 

applies to Caucasians and to a1 1 persons of Hispanic heritage, whatever their racial background. This follows the method of counting 

used in most government programs. The term nonwhite includes blacks, 

Ameri can Indians, and Oriental s. 

PREFACE 

Heal th Differential s Between White and Nonwhite Americans is 

part of a series of studies undertaken by the Congressional Budget 

Office to examine the causes of and possible remedies for racial 

inequalities. It was prepared at the request of Parren J. Mi tchell , Chairman of the Task Force on Human Resources, and Louis Stokes, 

Chairman of the Task Force on Community and Physical Resources, 

House Budget Committee. Topics of the related papers will include 

i nequal i ti es in education and weal th. 

This paper was prepared by Bonnie Lefkowitz of CBO's Division 

of Human Resources and Communi ty Development, under the supervi si on 

of Robert D. Reischauer and Stanley Wallack. The author wishes to 

acknowledge the research assistance of Robert H. Meyer, Mark Chandler, 

and Matthew Stiefel and the helpful comments of David Allen, Laura 

Murphy, and Nathaniel Thomas. This author especi a1 ly thanks the 

National Center for Health Services Research for providing much of the 

data on health status and utilization. The manuscript was edited by 

David Howell Jones and typed for publication by Toni Wright. 

In keeping with CBO's mandate to provide nonpartisan and objective analysis, the paper makes no recommendations. 

Alice M. Rivlin 

Di rector 

August 1977 

TABLE OF CONTENTS 

Summary ..................................................... 

Chapter I. Plan of the Paper ................................ 

Chapter 11. The Problem .................................... 

Differentials in Health Status ......................... 

Di f ferenti a1 s in Care Received ......................... 

Chapter 111. Federal Efforts -- How Big and How Successful? - 

Financing Programs ..................................... 

Resource Programs ...................................... 

Chapter IV. Approaches to Improvement ...................... 

Financing Programs ..................................... 

Resource Programs ...................................... 

Health Service Programs ................................ 

Conclusion ............................................. 

LIST OF TABLES 

1. Selected Measures of Health Status, By Race and Income --- 4 

2. Trends in Selected Health Status Indicators, By Race, 1950-1975 ............................................. 7 

3. Selected Measures of Health Care Utilization, By Race 

and Family Income, 1975 ............................... 9 

4. Determinants of Utilization of Health Care and 

Explanatory Factors ................................... 11 

5. Percentage Distribution of Sources of Visits to 

Physicians, By Race and Family Income, 1974 ----------- 13 

6. Average Medicaid Payment Per Beneficiary, By Race 

and Region, Fiscal Year 1974 .......................... 18 

7. Di stri buti on of Federal Heal th Service Program 

Beneficiaries, By Race and Ethnicity ------------------ 26-27 

SUMMARY 

The health of nonwhites is not as good as that of whites, yet 

nonwhites get less -- and possibly less effective -- health care 

than whites do. This disparity, the magnitude and effectiveness of 

federal efforts that could address it, and ways in which the situation 

could be improved, are discussed in this paper. 

THE PROBLEM 

Di fferenti a1 s in health status between whites and nonwhites 

persi st, despite considerable recent progress in narrowing the gap. 

Nonwhites still experience nearly 50 percent more bed disability days, 

70 percent higher infant mortality, and a life expectancy six years 

shorter than that of whites. Nonwhites are more likely than whites 

are to suffer from a number of specific conditions known to be improved by health care, which may indicate failure to receive needed 

prevention or treatment. 

Some observers question whether more or be'tter care can be 

effective when environment plays such a large role in determining 

health status. Past increases in the availabi 1 ity of care, however, 

can be related to improvement in the health of nonwhites. Infant 

mortal i ty is parti cul arly suscepti bl e to increased access to care, 

that among nonwhites having been cut in half since the initiation of 

medicaid. Care may be needed for the relief of pain and suffering, 

moreover, even if it does not produce measurable improvement in health 

status. Thus, despite the significance of nonmedical factors, it is 

important to identify and correct differentials in health care recei ved. 

With respect to use of health care, whites make about 10 percent 

more visits to physicians on the average than do nonwhites. This is 

primarily because fewer nonwhites see a physician at all, which is 

in turn attributable to lack of a regular source of care. The proportions of whites and nonwhites hospital ized each year do not vary 

significantly, but nonwhites, especially those who are poor, tend to 

remain in the hospital longer because they are sicker. 
So far as effectiveness is concerned, the care nonwhites receive 

is more 1 ikely to lack continuity and personal attention. Twice as 

many visits to physicians by nonwhites as by whites occur in institutions; when nonwhites do visit private physicians it may be those 

who speci a1 i ze in high-vol ume, hi gh-turnover medicaid practices. 

Fi nal ly , conditions affecting nonwhites disproportionately , such as 

alcohol and drug abuse, may be ignored or not treated appropriately. 

FEDERAL EFFORTS 

By far the largest federal health care efforts affecting racial 

differential s are the financing programs, medicare and medicaid. 

These programs pay for care provided eligible persons by the public 

and private sectors. Together, they made up about 80 percent of the 

$33.1 billion health budget administered by the U.S. Department of 

Health, Education, and Welfare (HEW) in 1976. Medicaid, the primary 

means of financing health care to the poor, served 24.4 mil 1 ion beneficiaries in 1976. It is a state-run program with federal guidelines 

and federal f i nanci a1 contributions. Because of varying state requirements, an estimated third of the nation's poor are not covered, 

and benefits vary greatly from state to state. Many of the states 

with the lowest coverage are in the South, where there are large 

nonwhite populations. In addition, benefits for those who do receive 

them are distributed quite unequally at state as well as national 

levels. In 1974, the national average expenditure per nonwhite beneficiary was $321 and per white beneficiary, $560 -- 75 percent higher. 

Medicare, the federally funded and operated health insurance 

plan for the elderly and disabled, served about 24 mil lion enrol lees 

i n 1976. A1 though, unl i ke those admi ni stered under medi cai d, el i gibility and benefits are uniform throughout the nation, the benefits 

of medicare are still distributed unequally among whites and nonwhites. One reason for the disparity is that the program requires 

a1 1 beneficiaries, regard1 ess of income, to contribute an identical 

proportion of the cost of the services they receive. Thus, the costsharing provision is a disproportionate burden and a greater deterrent to care for the poor, more of whom are nonwhite. 

A small proportion of the HEW health budget -- about 2 percent 

in 1976 -- is attributable to programs that attempt to influence the 

development and allocation of resources in the private sector. In 

the past, hospital construction programs were concentrated on expansi on, mostly i n mi ddl e-i ncome areas. The National Heal th Pl anni ,.; 
and Resources Development Act of 1974 has greater, but unproven 

potential to channel resources to rural and inner-city areas where 

nonwhites are found. Federal aid for training in health professions 

was a1 so concentrated on increasing supply in the past. Legislation 

passed in 1976 included the first major effort to increase the number 

of physicians specializing in primary care and to place new graduates 

in geographic areas where shortages exist. 

A third area of federal activity affecting racial differences 

is delivery of health services, either directly or through projects 

financed by grants. Such programs accounted for about 6 percent of 

the HEW health budget in 1976. Because they control the organization 

of care, they can address more of the problems facing nonwhites than 

can financing or resource programs. Service del ivery programs are 

re1 atively small in scope, however. Programs providing comprehensive 

medical services, such as community health centers, serve an estimated 

total df 3.7 mill ion persons, a majority of them nonwhites or Hispanic. Programs provi ding mental -health and re1 ated services serve 

an estimated 2.2 million persons. The proportion of nonwhite beneficiaries ranges from a low of 12 percent in community mental-heal th 

centers to 36 percent in drug-abuse projects. With the exception of 

family planning, programs providing other services, such as rat control or treatment of venereal diseases, serve a majority of nonwhites. 

APPROACHES TO IMPROVEMENT 

In order to reduce whi telnonwhi te heal th di f ferenti a1 s and 

better meet the needs of nonwhites, federal programs would have to 

address four types of problems: financial barriers to the receipt 

of health services; nonf i nanci a1 barriers, i ncl uding 1 ack of provi ders and discrimination against consumers; absence of continuity 

when services are provided; and insufficient emphasis on some condi tions affecti ng nonwhites. 

Some of the financial barriers in medicaid could be overcome 

by equalizing all benefits and levels of eligibility. Beyond this 

step, financial barriers in both medicare and medicaid could be addressed by ensuring that any sharing of costs is negligible for poor 

persons and that physicians do not bill patients for additional 

amounts. The monetary i ncenti ves avai 1 able through financing programs 

may have limited success in dealing with other barriers to the receipt 

of care and the assurance of continuity of services, a1 though enforcement of civil rights could be broadened and greater reimbursement 
could be provided for more comprehensive or prepaid services. Monetary incentives may not be specific enough to induce more emphasis on 

particular problems without adverse side effects. 

Access to care for specific groups, including nonwhites and poor 

persons, could be made an expl icit goal of programs concentrated on 

development of resources in and regulation of the private sector. 

Capital expenditures by heal th institutions that serve the inner city 

and poor rural areas and by those that provide comprehensive ambulatory care could be given priority. Present efforts to .place new 

health professionals in areas where shortages exist could be strengthened by greater attention to the settings in which these professionals 

practice and, to some degree, by more vigorous affirmative action on 

the part of medical schools. A major question is whether regulation 

of existing health professionals -- telling them where to practice 

and whom to treat -- is a viable way of assuring access by nonwhites 

to the services of physicians. 

Most of the programs that deliver health services already reach 

and serve nonwhites more effectively than do financing programs 

dependent on the private sector. Such programs could be expanded as 

a "resource of last resort" where neither financing nor regulatory 

efforts can guarantee access to and quality of care. The focus of 

some heal th-service del i very programs, such as community mental-heal th 

centers, on nonwhites and their problems could be improved. 

xiv 
CHAPTER I. PLAN OF THE PAPER 

Despi te consi derabl e progress i n narrowing th.e health gap between white and nonwhite Americans in the last 20 years, substantial 

di fferences persi st. Accordi ng to most indicators, nonwhites are 

1 ess heal thy than whites. Yet nonwhites see physicians somewhat less 

often and are less likely to have sources of regular care. They are 

hospitalized less often than whites but for longer periods. They 

continue to receive far less in benefits per person from the financing programs that constitute about 80 percent of the health budget 

of the Department of Health, Education, and Welfare (HEW). 11 With 

few exceptions, other federal health programs are small in scope or 

have yet to produce a significant effect on the quantity or qua1 ity 

of heal th care recei ved by nonwhi tes. 

In this paper whi telnonwhi te heal th differenti a1 s and possible 

remedies are discussed in detail. In the first section, the basic 

problem is described: nonwhites are less healthy than whites, they 

get less care, and the care they do get may be less effective. The 

magnitude and effectiveness of federal programs addressing racial 

differentials in health care are reviewed in the second section. The 

third section is a discussion of short-term and 1 ong-term approaches 

to the problem. 

- 11 The health budget referred to is limited to HEW programs, as is 

the di scussi on throughout, and does not i ncl ude heal th services 

provided by the Veterans Administration or the Department of 

Defense. 

CHAPTER 11. THE PROBLEM 

Racial differences exist in summary measures of health status, 

and a number of specific conditions affect nonwhites di sproportionately. A1 though the abil ity of more and better care to affect 

health status is 1 imi ted by genetic and environmental factors, such 

care has helped to narrow racial gaps. Pain and suffering, moreover, 

must be relieved, regardless of the ultimate outcome. Thus, the 

fact that nonwhites continue to get less. health care than whites, and 

the indications that the care they get is less effective, may be 

considered a major health problem. The economic costs of this problem 

can be seen in longer hospital stays because nonwhites tend to be 

sicker when they do receive care, in decreased abil ity to work and 

increased dependency upon welfare, and in the persistence of condi tions that bl ock f ul 1 educational and emotional development. 

DIFFERENTIALS IN HEALTH STATUS 

Summary measures of health status that subsume many conditions 

include number of bed disability days and rates of 1 ife expectancy, 

infant mortality, and death. Table 1 shows that in 1974 or 1975, 

according to each of these measures, nonwhites were less healthy 

than whites. - 1 / 

Bed disability days are a1 so shown by level of family income 

within each racial group and individually for persons over 65. Both 

whites and nonwhites with family incomes of less than $5,000 had 

more illness, but poor nonwhites had the most. The whitelnonwhite 

differential was largest for those with family incomes of less than 

$5,000 but nearly as great for those with family incomes between 

$5,000 and $10,000. This suggests that problems exist for near-poor 

nonwhites as well as for those with incomes below the official poverty 

- 1 / Fi gures from National Center for Health Statistics, unpublished 

data from the Health Interview Survey, 1975, and National Center 

for Health Stati stics, Advance Report, Fi nal Mortal i ty Stati stics, 

1974, Monthly Vital Statistics Report, 24:11, February 3,. 1976, 

Supplement. 
Table 1. SELECTED MEASURES OF HEALTH STATUS, BY RACE AND INCOME 

White Nonwhite 

Number of Bed Disability Days Per 

Person, 1975 a/ 

A1 1 incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

Number of Bed Disability Days Per 

Person Over 65, 1975 - a/ 

A1 1 incomes 

less than $5,000 

$5,000-$10,000 

greater than $1 0,000 

Deaths Under 1 Year Per 1,000 

Live Births, 1974 - b/ 

A1 1 incomes 

Average Years of Life Expectancy 

at Birth, 1974 - b/ 

A1 1 incomes 

Age-Adjusted Deaths c/ 

Per 1,000 Persons, 1374 - b/ 

- a/ National Center for Health Statistics, unpublished data from the 

Heal th Intervi ew Survey, 1975. 

b/ National Center for Heal th Statistics, Advance Report, Final - 

Mortal i ty Stati stics, 1974. Monthly Vital Statistics Report, 

24: 1 1 : 4-6, February 3, 1976, Supplement. 

- c/ If death rates for recent years are not age-adjusted, they are 

slightly higher for whites than for nonwhites. This reflects 

recent improvements in heal th status plus sufficient nonwhite 

deaths in the past to bias their average age downward, resulting 

in fewer deaths today. 
1 eve1 . Interesti ngly , there was very 1 i ttl e raci a1 di f ference for 

those with incomes of more than $10,000. Bed disability days for 

persons over 65 show the same pattern but with much greater racial 

differences for those with incomes under $10,000. 

Data on specific conditions indicate not only that some problems 

are more prevalent among nonwhites but also that nonwhites fail to 

receive necessary care. For example, a nonwhite is more than three 

times as likely to die of hypertension as is a white of the same age 

group. 2/ He or she is also more likely to die from other conditions 

that can result from untreated hypertension: 60 percent more likely 

to die of cerebrovascular disease and almost four times as likely to 

die of hypertensive heart disease. Nonwhites are a1 so twice as likely 

to die from diabetes and four times as likely to die of chronic 

kidney di sease, other conditions requi ri ng conti nued treatment that 

are more prevalent among nonwhites. 

A nonwhite is 60 percent more 1 ikely to die of influenza or 

pneumonia and five times as likely to die of tuberculosis -- the 

latter a disease with causes related to poverty but which has presumably been "conquered" through modern drug therapy. He or she is 

nearly twice as 1 ikely to die of cirrhosis of the liver and more 

than seven times as likely to be a victim of homicide -- both of 

which are indicative of soci a1 or psycho1 ogical problems. Finally , a nonwhite woman is five times as likely to die of complications 

in childbirth than is a white woman; this fact, combined with the 

higher i nfant-mortal i ty rate for nonwhites, suggests a continuing 

1 ack of prenatal care. 

There are a number of conditions more prevalent among nonwhites 

than among whites whose effects are not reflected in death rates. 

These include nearly three times the proportion of teenagers and women 

with low or marginal incomes at risk of unintended pregnancies, 3/ 

- 21 This and subsequent age-adjusted death rates from National Center 

for Health Statistics, Advance Report, Final Mortality Statistics, 

1974, op. cit., and from unpublished data, DVS-SRB. 

3/ Derived from the Alan Guttmacher Institute, Data and Analyses for - 1974 Revision of DHEW Five-Year Plan for Family Planning Services, 

HSA Contract No. 105-74-1 93, May 1974. 
nearly four times the amount of narcotic drug abuse, 41 a 40 percent 

greater 1 i kel i hood of psychiatric hospital i zati on, 57 and twice as 

many speech impairments and 60 percent more severQ vision impairments. - 61 

Does More and Better Health Care Improve Health Status? 

Before going on to discuss the quantity and quality of health 

care received by nonwhites, one might ask whether more and better 

care wi 11 , in fact, improve thei r heal th. Many factors other than 

care affect health status. Poverty contributes to problems of housing, sanitation, and nutrition which have strong negative effects on 

health. Di scrimi nation in education and employment keeps economic 

status low and also contributes to lack of knowledge about symptoms 

of disease or services available, a higher proportion of unsafe jobs, 

and psycho1 ogi cal problems. In addition, nonwhites possess both 

strengths (for examples, 1 ess 1 i kel i hood of skin cancer, arthritis, 

and i schemi c heart disease) and weaknesses (greater 1 i kel i hood of 

hypertension, diabetes, and sickle cell anemia) that may be related 

to genetic as we1 1 as environmental factors. 

Particularly in recent years, some researchers have claimed that 

in view of these other factors, the argument for improvements in 

health care is less compel1 ing. There are two kinds of counterarguments. First, while sizable gaps remain, progress in narrowing racial 

differences has occurred and can be related, at least in part, to 

increased availability of care. Table 2 shows reductions in death 

rates and infant mortality and increases in life expectancy for whites 

- 41 Nonwhites represented roughly 45 percent of narcotic drug "mentions" in project DAWN 111- brug dbuse Warning Network, phase I11 

Report, Apri 1 1974-Apri 1 1975, Drug Enforcement Administration 

and National Institute of Drug Abuse, Bureau of Narcotics and 

Dangerous Drugs Contract No. 72-47. 

- 5/ National Institute of Mental Health, Utilization of Mental Health 

Faci 1 i ties, 1971, DHEW Pub1 i cati on No. NIH-74-657, 1973. 

- 61 Health Resources Admi ni strati on, Preval ence of Selected Impair- ment, United States, 1971 , Data from the National Health Survey, 

Series 10, Number 99, DHEW Publication No. HRA-75-1526, 1975. 
and nonwhites between 1950 and 1975. 11 Death rates and life expectancy are less amenable to health care alone; thus they show about the 

same gains for nonwhites both before and after 1965, when medicare for 

the elderly and medicaid for many poor persons were initiated. The 

i nfant-mortal i ty rate, which is parti cul arly suscepti bl e to increased 

availability of care, decreased for nonwhites less than 10 percent 

between 1950 and 1965 but was cut almost in half between 1965 and 

1975. 

Table 2. TRENDS IN SELECTED HEALTH STATUS INDICATORS, BY RACE, 1950-1975 

Age-Adjusted Deaths Infant Mortality Per Life Expectancy 

Per 1,000 Persons a/ 1,000 Live Births b/ at Birth 51 d/ 

Ratio of Ratio of Ratio of 

Nonwhite Nonwhite Nonwhite 

Year White Nonwhite to White White Nonwhite to White White Nonwhite to White 

-- - - 

- a/ National Center for Health Statistics, Unpublished data, DVS-SRB, 1976. 

- b/ Monthly Vital Statistics Report, 24:13, June 30, 1976. op. cit. 

- C/ Monthly Vital Statistics Report, 24:11, February 3, 1976, Supplement, op. cit. 

- dl National Center for Health Statistics: Life Tables, Vital Statistics of the 

United States, 1973, Volume 11, Section 5. 

71 Figures from various Vital Statistics pub1 ications and from - unpubl i shed data, National Center for Health Statistics. See 

Tab1 e 2 for speci fic sources. 
Second, there are reasons for providing care even where major 

improvements in health status will not result. Health care may be 

required by those with genetical ly re1 ated conditions a1 though its 

margin of effectiveness is greatly reduced. It may be an interim 

solution to probl ems re1 ated to external factors because fundamental 

economic and environmental reforms, potentially more effective, are 

not readily available. 81 Finally, it may be needed to re1 ieve pain 

and anxiety in the sigsficant number of patients who seek care for 

noncontagious acute illnesses. 

DIFFERENTIALS IN CARE RECEIVED 

Utilization of health care is illustrated by data on the services of physicians (i ncl udi ng services received i n cl nics, hospital 

outpatient departments and emergency rooms, and home and phone consul tations) , and hospitalization. While it is more difficult to 

demonstrate the degree of effectiveness, some assumptions can be 

made from data on where and how care is received and from the evidence 

that many conditions affecting nonwhites di sproportionately go untreated. 

Uti 1 ization 

Table 3 presents data from the national Health Interview Survey 

for 1975 showing that whites averaged 5.1 visits to a physician per 

person, whi 1 e nonwhites averaged 4.7. Thi s di f ference was attri butable more to the proportion of the population who saw a physician 

at a1 1 during the year than to the number of visits by those who did 

see a physician. 91 When data for varying levels of family income 

within each raci algroup were examined, the 1 argest di fference between 

whites and nonwhites who saw a physician occurred when the level of 

81 Irvinq Leveson, "The Chal lenqe of Health Services for the Poor," - ~nnals of the-~meri can ~cademy of Pol i tical and Social science, 

399: 22-29 (January 1972). 

91 National Center for Health Statistics, unpublished data from the - Health Interview Survey, 1975. 
Table 3. SELECTED MEASURES OF HEALTH CARE UTILIZATION, BY RACE 

AND FAMILY INCOME, 1975 - a/ 

-- -- 

White Nonwhite 

Number of Visits to a Physician 

per Person per Year 

All incomes 

less than $5,000 

$5,000-$10,000 

greater than $1 0,000 

Percentage of Population Who Saw 

a Physician During Year 

All incomes 

less than $5,000 

$5,000-$10,000 

greater than $1 0,000 

Number of Visits to a Physician 

per Person Who Saw a Physician 

All incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

Number of Short-Term Hospital Discharges 

per 1,000 Persons per Year 

A1 1 incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

Average Length of Stay in 

Short-Term Hospital s 

All incomes 

less than $5,000 

$5,000-$10,000 

greater than $1 0,000 

- a/ National Center for Health Statistics, unpublished data from the 

Health Interview Survey, 1975. 
income was between $5,000 and $10,000. 101 This may be related to the 

lower private insurance holdings of nonwhites who are neither poor 

nor elderly and are therefore unlikely to receive public payments for 

health care. 

With regard to hospitalization, Table 3 also shows that whites 

in the 1975 national Health Interview Survey had only slightly more 

discharges from hospitals than nonwhites had -- 142 per 1,000 persons 

compared with 137. Data by family income within each racial group 

indicated a much higher rate of discharge for both low-income whites, 

who averaged 202 discharges per 1,000 persons, and low-income nonwhites, who averaged 183. Average length of stay for those who were 

hospitalized was 7.9 days for whites and 8.9 days for nonwhites. In 

addition, the length of stay was 10.7 days for low-income nonwhites, 

ionger than for any other group, regardless of race. This is general ly accepted as evi dence that when nonwhites, parti cul arly poor 

nonwhites, do reach the hospital thei r i 11 nesses have progressed 

further, and they require more care. 

Thus, present utilization of health care appears to be inequitable because it is influenced by factors such as race and income. 

But what happens when each of these factors is isolated, also adjusting for such indicators as illness, age, and sex? 

Data from a 1970 household health survey have been analyzed 

in this way and the relative importance of each factor in determining 

utilization has been estimated. Table 4 summarizes the pattern that 

emerged for the proportion of the population who saw a physician 

in the survey year (physician contact), the number of visits to a 

physician for those who saw a physician, the number of hospital 

- 101 According to unpublished data from the 1974 Health Interview 

Survey, 72 percent of whites and 59 percent of nonwhites under 

the age of 65, with family incomes between $5,000 and $10,000, 

had private hospital insurance. Far fewer are believed to be 

covered for visits to physicians. This may be because near-poor 

nonwhites are less likely than near-poor whites to work at jobs 

where i nsurance i s provided. 
Table 4. DETERMINANTS OF UTILIZATION OF HEALTH CARE AND EXPLANATORY FACTORS a/ 

1. Physician Contact 2. Visits to Physicians by Those 

Who Saw a Physician 

Major determi nant: I1 1 ness perceived Major determinant: I1 1 ness perceived 

by patient. by physician. 

Importance of factors suggesting Importance of factors suggesting 

inequity : inequity : 

- Race: Nonwhites were significantly - Race: Little variance. 

less likely to see a physician at 

all; this was mostly explained by Income: Low-i ncome f ami 1 i es had 

lack of a regular source of care. more visits; this was explained 

by greater age and more illness. 

Income: Little variance. 

Location: Little variance. 

Location: Rural farm families were 

less likely to see a physician; 

this was explained by less illness. 

3. Hospital Admissions 4. Days in the Hospital for Those 

Admitted to the Hospital 

Major determinant: Illness. Major determinant: I1 1 ness and age. 

. Importance of factors suggesting 

inequity : 

Race : Nonwhites were sl i gh tl y 1 ess 

likely to enter the hospital ; this 

was mostly explained by lesser age. 

Income: Low-income families were 

more likely to enter the hospital ; 

this was explained by higher prevalence of illness. 

Location: Inner city and rural farm 

families were less likely to enter 

the hospital ; this was unexplained. 

Importance of factors suggesting 

inequity : 

Race: There appears to be 1 ittle 

variance, but nonwhites spent 

somewhat fewer days in the hospital 

than would have been indicated by 

their higher prevalence of i 11 ness. 

Income: Low-i ncome f ami 1 i es appear 

to spend considerably more days in 

hospital, but their stays have been 

indicated by thei r higher prevalence 

of illness. 

Location: Rural fan fami 1 ies spent 

more days in the hospital; this was 

explained by greater age. 

- a/ Andersen, Ronald, "Health Service Distribution and Equity ," in Equity in Health 

Services: Empirical Analyses in Health Pol icy, edited by Ronald Andersen, 

Joanna Kravits, and O.W. Anderson (Cambridge, Massachusetts: Ballinger Publishing Company, 19751, pp. 9-32. 
admissions, and the number of days in the hospital for those admitted. 11 / For all measures of volume and some measures of contact, 

much of the apparent variance in utilization by race and income could 

be explained by factors of age and illness. The most notable exception was the variance in physician contact by race, which was also 

present in the 1974 Health Interview Survey. This variance was 

attributable to still another "inequity" factor, lack of a regular 

source of care, partly because physicians were not located in nonwhite 

areas. Inner city and rural farm families, many of whom are nonwhite, 

were also less 1 ikely to be hospitalized. Income alone was of minimal 

i mportance i n determi ni ng uti 1 izati on. 

Effectiveness 

Table 5 provides data from the 1975 national Health Interview 

Survey on source of visits to physicians. 12/ Here racial differences were far more important than income. The proportion of 

vi sits to institutions (cl i ni cs , hospital outpatient departments, 

emergency rooms) rather than to private physicians is highest for 

nonwhites with family incomes of less than $5,000 and next highest 

for nonwhites with family incomes between $5,000 and $10,000. Lowincome whites were more 1 i kely to receive care from private physicians 

than were any nonwhites, regardless of income. This is significant 

because care received from hospital outpatient departments and emergency rooms, in particular, is believed to be fragmented and episodic. 

In addition, even where poor nonwhites do receive care from 

private physicians, it may lack continuity. Evidence from some states 

and localities indicates that a small number of physicians is usually 

responsible for a large proportion of the medicaid bi 11 i ngs in innercity areas populated by nonwhites. For example, in New York City, 

10 percent of physici ans participating in medicaid were responsi bl e 

for more than 60 percent of the billings during the first half of 

- 11 / Ronal d Andersen , "Heal th Service Di stri buti on and Equity ," i n 

Equ i ty i n Heal th Services: Empirical Analyses i n Heal th Pol icy , edited bv Ronald Andersen, Joanna Kravits. and 0. W. Anderson 

(~ambri dge, Massachusetts: - Ball i nger Pub1 ishi ng Company, 19751, 

pp. 9-32. 

- 121 National Center for Health Statistics, unpublished data from 

the Health Interview Survey, 1975. 
Table 5. PERCENTAGE DISTRIBUTION OF SOURCES OF VISITS TO PHYSICIANS, 

BY RACE AND FAMILY INCOME, 1974 - a/ 

White Nonwhite 

Physician's Office 

A1 1 incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

Patient's Home 

All incomes 

less than $5,000 

$5,000-$10,000 

greater than $1 0,000 

Telephone 

A1 1 incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

Hospital OPD or Emergency Room 

All incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

Other b/ 

A1 1 incomes 

less than $5,000 

$5,000-$10,000 

greater than $10,000 

- a/ National Center for Health Statistics, unpublished data from the 

Health Interview Survey, 1975. 

b/ Other includes free-standing clinics, some of which are government-sponsored health centers. 
1975. These physicians may practice in hi gh-vol ume, hi gh-turnover 

settings. They are often not certified as specialists. 131 A large 

proportion are believed to be foreign-trained and to lack hospitaladmitting privileges. The 1 atter makes it particularly difficult for 

them to coordinate inpatient and outpatient care. 

Many of the same circumstances that tend to make the care of 

nonwhites uncoordinated a1 so suggest, if not 1 ower qua1 i ty, absence 

of the personal attention and health counseling that might help to 

overcome problems related to 1 ife style or lack of knowledge. Finally, conditions affecting nonwhites in particular may be ignored or 

not treated appropriately. Among the major complaints is the fact 

that many mental-heal th professionals are not sensitive to or interested in the problems of nonwhites. One author has described a 

tendency of community mental -heal th professional s to mi sdiagnose 

blacks' conditions and to classify blacks in groups with a worse 

prognosis. 141 Other problems may include a lack of interest among 

health professionals in alcoholism or drug abuse, and a lack of 

emphasis on detection and treatment of such conditions as hypertension. 

- 131 Information on the medicaid program in New York City from Medical 

Assistance Program, New York City Department of Health. Information on medicaid programs in New Jersey, Indiana, and Connecticut from Alipl ied Management Sciences, A Study of Selected State 

Medicaid Programs: An Analysis of Uti 1 ization, Cost and Qua1 i ty, 

National Center for Health Services Research. Health Resources 

Administration, Department of Heal th, ducati ion, and We1 fare, 

Contract No. HRA-106-74-145, June 16, 1975. 

- 141 Richard Shapiro, "Di scrimination and Community Mental Health: 

Chal lenging Institutional Racism," Civil Rights Digest, 8:192-23, 

Fall 1975. 
- ~ 

CHAPTER 111. FEDERAL EFFORTS -- HOW BIG AND HOW SUCCESSFUL? 

As we have seen, four kinds of problems are responsible for 

differences in health care between races. First, a disproportionate 

number of nonwhites are poor and face financial barriers to care. 

Income a1 one is a decreasing problem, but poor nonwhites experience 

the most inequity . Second, nonwhites a1 so face nonf i nanci a1 barriers 

which may include shortages of health manpower or facilities in areas 

where they 1 ive and di scrimi nation in areas where provi ders. do exist. 

Third, the services available to nonwhites tend to be less continuous. 

Both the second and third problems diminish access to a regular source 

of care, thus discouraging contact with physicians. Fourth, there may 

be insufficient emphasis on conditions affecting nonwhites. Together 

with lack of continuity, this means that even when nonwhites receive 

care, it may not meet their needs as effectively as it should. 

The magnitude and effectiveness of federal programs in addressing the four problem areas listed above will be reviewed in this 

section. Federal efforts to provi de heal th care include f inanci ng 

programs such as medicare and medicaid, which pay for care provided 

to eligible persons by the public and private sectors; resource 

programs, which develop and sometimes regul ate heal th faci 1 i ties and 

manpower; and heal th-servi ces programs, establ i shed to deal wi th 

specific conditions or to deliver comprehensive care to target populations. 

FINANCING PROGRAMS 

Together, medicare and medicaid accounted for $26.4 bill ion of 

a $33.1 billion HEW health budget in fiscal 1976. 11 Since their 

inceptions in 1965, these programs have done much to increase access 

to care for the elderly and poor, and are probably responsible for 

- 1 / Figures for medicare from U.S. Office of Management and Budget, 

The Budget of the United States Government, Fiscal Year 1978, 

Appendix. Fiqures for medicaid from HEW. Social and Rehabilitati on ~ervi ces, Medicai d Stati sti cs, ~i scal Year 1976, NCSS 

Report B-5, March 1977. 
the declining importance of income as a determinant of utilization. 21 

Yet because they address themselves almost exclusively to patient? 

ability to pay, they perpetuate many other inequities. 

Medi cai d 

Medicaid, the primary vehicle for financing health care to the 

poor, is a state-run program with federal guidelines and financing 

contributions. States set their own income cutoffs for eligibility, 

often be1 ow the off ici a1 poverty 1 eve1 . Single adults and, in some 

states, male-headed families, are not eligible at all. An estimated 

third of the nation's poor, many of them in southern states with 

1 arge nonwhite populations, remain uncovered. 31 In addition, benefits for those who are eligible vary greatly from state to state 

and again are lower in the South. Thus racial inequity in the medicaid program results in part from the fact that financial barriers 

to car'e are not overcome. Unequal distribution of funds to benef ici ari es, however, within states where the same el igi bi 1 i ty requi rements and benefits apply to whites and nonwhites alike suggest that 

nonf i nanci a1 barriers are a more significant problem. 

For the 24.4 mil 1 ion beneficiaries in whose behalf the program 

paid cl aims i n fiscal 1976, expendi tures totaled $1 5.5 bi 11 i on, 

$8.6 bill ion of which was borne by the federal government. 41 These 

funds have been and continue to be distributed quite unequglly with 

regard to race. In 1969, according to figures from 24 states, an 

average sum of $213 was expended for each nonwhite beneficiary, while 

$375 was expended for each white beneficiary -- 75 percent more. - 51 

- 21 Karen Davis, "Medicaid Benefits and Utilization of Medical Services by the Poor," Inquiry, 13:2:122-135, June 1976. 

- 31 If turnover of the eligible population is counted, the proportion 

of poor persons not covered at any given time may be higher. See 

Karen Davi s, "Achievements and Problems of Medi cai d," Pub1 ic 

Health Reports, 91 :4:309-316, July-August 1976. 

- 41 U.S. Department of Health, Education, and Welfare, Social and 

Rehabi 1 i tation Servi ce, NCSS Report B-5, op. ci t. 

- 51 Karen Davis, "Medicaid Payments and Utilization of Medical Services by the Poor," op. ci t. 
Table 6 provides similar figures by region for 1974, the most recent 

year for which data have been tabulated. Expenditures per nonwhite 

beneficiary averaged $321 and those per white beneficiary $560 -- 

still 75 percent more. 61 It should be noted that the 1974 figures 

represent 42 of 50 states, but only half of all recipients of medicaid, since some of the largest states, including New York and cal ifornia, did not report benefits by race. The racial differences were 

substantial in all but one of the 10 regions, however, and, within 

those regions, for a great majority of the states. 

While racial tabulations are not available by age, a substantial 

portion of the difference in expenditures per beneficiary may be 

attri butabl e to el derly persons in nursing homes. The expenditures 

for such beneficiaries, who are overwhelmingly white, tend to be much 

hi gher than expenditures for persons recei vi ng acute hospital and 

professional care. Expenditures for patients in nursing homes accounted for more than 35 percent of medicaid payments in 1974. 

Whatever the age of the beneficiaries, there are four types of 

nonfinancial barriers to care that medicaid does not appear to overcome. 

First, medicaid does not address shortages of physicians or 

facilities in rural farm areas or the inner city, where nonwhites 

reside. Second, discrimination takes the form of refusal to serve 

medi cai d patients. The percentage of nonfederal physicians who did 

serve medicaid patients in 1974 ranged from 30 in Florida and 36 in 

the District of Columbia to 97 in West Virginia; the nationwide 

average was 51 percent. 71 It was noted earlier that nonparticipation 

of physicians is most iikely to occur in inner-city areas. While 

hospitals may not legally refuse medicaid patients and still receive 

other federal funds, requirements that patients be admitted by a 

physician with staff privileges (when nonwhite medicaid patients are 

less likely to have access to such a physician) produce the same 

effect. 

61 Data tabulated by National Center for Social Statistics, Social - and Rehabilitation Service, Department of Health, Education, 

and We1 fare. 

- 71 Figures compiled by Medical Services Administration, Soci a1 and 

Rehabi 1 i tati on Service, Department of Health, Education, and 

Welfare. They are reported by states whose definitions of participants may vary and therefore are not completely reliable. 
Table 6. AVERAGE MEDICAID PAYMENT PER BENEFICIARY, BY RACE AND 

REGION, FISCAL YEAR 1974 - a/ 

Regi on 

Average Payment Average Payment 

per White per Nonwhite 

Beneficiary Benef ici ary 

TOTAL 

I. Connecticut, Maine, New 

Hampshire (missing Vermont, 

Massachusetts, Rhode Island) 

11. New Jersey (missing New York) 

111. Delaware, D.C., Maryland, 

Pennsylvania, Vi rgi ni a 

(missing West Vi rgi ni a) 

IV. A1 abama, Flori da, Georgia, 

Kentucky, Mississippi, North 

Carol i na, South Carol i na, 

Tennessee 

V. Illinois, Indiana, Michigan, 

Minnesota, Ohio, Wisconsin 

VI. Arkansas, Louisiana, New 

Mexi co, Okl ahoma, Texas 

VII. Iowa, Kansas, Missouri, 

Nebraska 

VIII. Montana, North Dakota, 

South Dakota, Utah (mi ssing 

Colorado, Wyomi ng b/ 

IX. Hawaii , Nevada (missing 

Cal i f orni a) 

X. Alaska, Idaho, Oregon, 

Washington 

- a/ Data tabulated by National Center for Social Statistics, Social 

and Rehabi 1 i tation Service, Department of Health, Education, and 

We1 fare. 

- b/ Arizona has no medicaid program. 
Third, there i s some i ndi cati on of raci a1 di scrimi nation. With 

regard to physicians, for whom Title VI of the Civil Rights Act (forbi ddi ng discrimination in federal programs) is not actively enforced, 

such indications are anecdotal and difficult to document. 81 Legally 

acceptabl e evidence of di scrimi nation does exist with respect to 

nursing homes. In 1974 nonwhites represented 5 percent of a1 1 patients in nursing homes, although 9 percent of all persons over 65 

are nonwhite and elderly nonwhites average more than twice as many 

bed disability days as do elderly whites. By comparison, nonwhite 

patients in acute-care hospital s were somewhat overrepresented i n 

relation to the proportion of the general population that they represent. 91 In part, the lower proportion of nonwhites in nursing homes 

may be-accounted for by the fact that more are cared for by relatives. 

A1 though def i ni ti ve evi dence does not exi st, however, there are 

be1 i eved to be di sproporti onate numbers of nonwhites pl aced i nappropri ately in institutions such as pub1 ic mental hospital s when nursing 

home care is indicated instead. 

Fourth, medicaid has not been successful at overcoming the 

barrier to care posed by 1 ack of knowledge and fear of discrimination 

on the part of potential users. The federal government's major attempt to increase utilization of primary care through the medicaid 

system -- the Early and Periodic Screening, Diagnosis, and Treatment 

program (EPSDT) for children under 21 -- after seven years of existence has succeeded in reaching annually only 15 percent of those 

eligible. One reason is that states are reluctant to seek greater 

utilization when they must pay part of the additional cost. 101 Another is that outreach and case management are provided mainly by 

notices mai 1 ed from we1 f are departments, since most medicaid programs 

do not employ community 1 iaison workers. 

- 81 For example, see reports of waiting rooms segregated by race in 

U.S. House of Representatives Committee on the Judiciary, Subcommittee on Civil Rights and Constitutional Rights: Title VI 

Enforcement in Medicare and Medicaid Programs, 1973, p. 74. 

- 91 'Figures from U.S. Census, 1975, and National Center for Health 

Statistics: Health, United States, 1975, DHEW Pub1 ication No. 

HRA 76-1232, 1975. 

- 101 U.S. Congressional Budget Office, "Prospects for Meeting Health 

Care Needs of Children El iqible for Medicaid Under EPSDT." in 
Besides its 1 imi ted ability to overcome barriers to care for 

many nonwhites, medicaid exerts 1 ittle or no influence on the organization or types of services available. In fact, the dominance of 

fee-for-service medicaid payments at lower than market rates encourages the kind of hi gh-vol ume, hi gh-turnover practice described 

earlier. This perpetuates fragmented and episodic care. 

Medicare 

Medicare, the federal ly funded and operated heal th insurance 

plan for the elderly and disabled, is unlike medicaid in that the 

services covered are uniform throughout the nation. Hospital insurance covers 24.5 million enrollees, including approximately 95 percent 

of a1 1 elderly persons. Supplementary medical insurance covers 24.0 

million persons who pay minimal monthly premiums, or, if they are 

poor, have their states pay the premiums for them. 

In fiscal 1976, medicare paid $12.6 billion in behalf of those 

enrolled in its hospital insurance plan and $5.2 billion in behalf 

of those enrol led in its supplementary medical insurance plan for a 

total of $1 7.8 bi 11 ion. lJ/ A1 though medicare theoretical ly treats 

everyone the same, its benefits, like those of medicaid, have been 

distributed unequally between whites and nonwhites. In 1968 medicare 

payments per nonwhite enrol 1 ee averaged $1 95 whil e payments per white 

enrollee averaged $273 -- 40 percent more. 121 The whitelnonwhite 

disparity was much small er, however, when payments per beneficiary 

were calculated. This suggests that whether or not an enrollee used 

the program at all was more important than the amount of care received by those who did use the program. 

One reason for the disparity is that the program requires a1 1 

beneficiaries, regard1 ess of i ncome, to contribute an identical proportion of the cost of the services they receive. This places a disproportionate burden on the poor and is a greater deterrent to their 

care. Further, while few physicians refuse a1 1 medicare patients, 

many will not 1 imi t their bills to the "assigned" rate. They may bill 

pati en ts for addi tional amounts, thereby posing another f i nanci a1 

barrier. 

- 111 U.S. Office of Management and Budget, op. cit. 

- 121 Karen Davis. "Eaual Treatment and Uneaual Benefits: The Medicare 

Program," ~i 1 bank Memori a1 Fund ~uarterl~, 53(4) :449-488 (Fa1 1 

1975). Later figures are not available but the disparity in 

benefits i s be1 i eved to have conti nued. 
Like medi cai d, medi care does 1 i ttl e to 1 ower nonf i nanci a1 

barriers or to influence organization of care or type of services 

offered. Its "usual and customary" reimbursement rates for specific 

regions may actual ly reinforce ma1 distribution of resources. As with 

medi cai d, there are suggestions of raci a1 di scrimi nation in nursing 

homes. Finally, nonwhites receive less expensive care than do whites, 

for two reasons. First, there are disproportionate numbers of elderly 

nonwhites in the South, where prices are lowest. Second, nonwhites 

are less likely to receive care from specialists. Both factors widen 

the gap in the do1 lar amounts of benefits received by the two groups, 

but that fact is not necessarily indicative of a disparity in the 

qua1 i ty of the care received. 

RESOURCE PROGRAMS 

Health pl anni ng, faci 1 i ty development, and manpower programs 

attempting to i nf 1 uence a1 1 ocation of resources throughout the private sector account for a small proportion of the HEW health budget 

-- less than $750 million in fiscal year 1976. The scope of such 

programs extends across the enti re health system, however. Thus, 

they can potentially affect the availability of care and, to a lesser 

degree, the type of services offered to nonwhites. These resource 

programs probably exacerbated inequities in the past and have only 

recently begun to consider factors relevant to needs of nonwhites. 

Pl anni ng and Faci 1 i ty Development 

Federal i nvol vement with the devel opment of heal th f aci 1 i ti es 

began with enactment of the Hill-Burton program to build hospitals 

in 1946. 13/ By 1971 , Hi 11 -Burton had contributed to the construction 

of more. than 470,000 inpatient beds, an estimated 73 percent of them 

in communities with populations less than 100,000. More than 50 percent of the funds went to hospitals in middle-income counties -- those 

in which the median family income in 1960 was between $5,000 and 

$7,000. - 14/ 

131 Since the advent of medicare and medicaid, expansion of hospitals 

has a1 so been encouraged by i ncl usi on of depreci ation a1 1 owances 

in reimbursement rates. 

- 14/ Judith R. Lave and Lester Lave, The Hospital Construction Act: 

An Evaluation of the Hill-Burton Program, 1948-1973 (Washington, 

D.C. : American Enterprise Institute, 1974). 
A separate federal program was initiated in 1966 to establish 

statewide and areawide comprehensive heal th-pl anni ng agencies. A 

principal tenet of this program was participation by consumers, including, in areas where they resided, some nonwhites. But while the 

health-planning agencies may have raised the consciousness of consumers, they had very 1 ittle power to implement decisions. 

In 1974, primarily in response to claims that many areas now 

had too many hospi tal beds, the Hi 1 l-Burton program, a1 ready vastly 

reduced, was subsumed in a new heal th-pl anni ng and resource-devel opment effort. 151 This time, the planning network was tied to mandatory state authority to control the supply of new facilities. Although federal planning guide1 ines have not yet been issued, some 

of the more sophisticated agencies have tried to stop the flight of 

existing hospitals from poor and inner-city areas and to make improved 

inner-city or community services a condition of approval of new construction. 161 This does not mean that when the new program is fully 

implemented,all agencies will be willing or able to do the same. 

Manpower 

Federal i nvol vement in heal th manpower devel opment began in 

1963 with special programs to aid both schools and students of health 

professions. For years, these efforts, dominated by fears of a 

shortage of doctors, were concentrated on the training of more professi onal s. Whil e the supply of such professional s increased substanti a1 ly , geographic ma1 d i s t r i buti on (not enough doctors in pub1 i c 

institutions or rural-farm and inner-ci ty areas, where nonwhites tend 

to 1 ive) and overspecial ization (not enough providers of primary care, 

which nonwhites 1 ack the most) persisted. 171 In fact, federal 

funding priorities probably increased the proportion of researchoriented physicians who would provide little or no community care. 

- 151 Pub1 ic Law 93-641 . 

- 161 These examples are drawn from plans and criteria of the New 

York City and Central Maryland (Baltimore City and surrounding 

counties) Health Systems Agencies. 

- 171 U.S. Congressional Budget Office, The Role of Aid to Medical, 

Osteopathic and Dental Students in a New Health Manpower Policy. 

Staff Working Paper, August 10, 1976. 
Legislation passed in 1976 included the first major effort to 

affect the type and location of practice after graduation. It requires schools to ensure that large proportions of residents are 

trained in primary care, authorizes 15,000 to 20,000 a1 1 -expense 

scholarships in exchange for service in areas where shortages exist, 

and expands the National Health Service Corps as a vehicle for placement of obl igated graduates. It a1 so provi des fi rst-year scholarships for disadvantaged students and gives recipients of such aid 

priority in receiving shortage-area scholarships subsequently. Thus 

levels of funding for both kinds of scholarships will determine how 

many graduates go to shortage areas and who those graduates are. - 18/ 

The federal government has also supported recruitment and traini ng of more nonwhite health professionals since 1968. Nonwhites are 

be1 ieved to be more sensitive to nonwhite patients and their particular problems; they may also be more likely to serve in shortage areas, 

a1 though this has not been demonstrated conclusively. The proportion 

of medical students belonging to minorities has in fact increased from 

3.1 percent in 1969 to 8.1 percent in 1975, but the percentage has 

stabilized in the last two years. 19/ In addition, it will take a 

good many more years before theseincreases among students have a 

substantial impact on the proportion of minority physicians in practice. In 1970, for example, only 2.2 percent of all U.S. physicians 

were black. a/ 

Other recent efforts to address shortages include federal support for trai ni ng paramedi cal personnel and nurse practitioners to 

perform some of a doctor's functions. Aims of this program have been 

blocked, in part, by the fact that the financing programs rarely reimburse for the services of these mi d-1 eve1 heal th professional s. 

- 18/ Public Law 94-484. 

- 19/ Figures include Mexi can-Americans and Puerto Ricans but exclude 

Orientals. Michael Koleda and John Craig, New Realities in 

Medical School Finance, 1976-80 (Washington, D .C. : National 

Pl anni ng Associ ati on, Center for Heal th Pol i cy Studies, July 

1976). 

- 20/ Health Resources Admi nistration, Bureau of Health Manpower, 

Minorities and Women in the Health Fie1 d, DHEW Pub1 ication No. 

HRA-76-22, September 1975. 
Heal th Service Programs 

Programs that provide specific services or comprehensive care 

to target populations -- primarily poor or medically underserved 

groups -- accounted for roughly $2.1 billion of the HEW health budget 

in fiscal 1976. 21 / Because they often establish and control the 

mechanism through-which services are delivered, such programs are 

able to address all of the problems contributing to racial inequity 

in health care. Some do so with a high degree of effectiveness. 

Funding for the health service programs is quite limited, however, 

enabling them to serve only a small proportion of the target popu1 ations envisioned by those who planned them. In addition, many 

programs experience difficulty in obtaining reimbursement from medicare and medicaid. Table 7 1 ists the major service programs together 

with numbers of their white and nonwhite beneficiaries. 

Comprehensive Care Programs 

The Indian Health Service is operated and paid for directly by 

HEW. Other comprehensive care programs provide local or state agen- cies with grants to establish projects serving geographic areas that 

are poor or lacking in resources. Such programs include community and 

migrant health centers and maternal and infant care and children and 

youth projects. In addition to direct federal funds, roughly 30 percent of the costs of community and migrant health centers are covered 

by payments made by patients or insurers (private or public). The 

figure is kept low by state restrictions on the type of services paid 

for and the rate paid for a given service and by the fact that the 

programs treat poor and near-poor persons who are not eligible for 

medi ca i d. 

These comprehensive care programs serve an estimated total of 

3.7 million persons. As indicated in Table 7, a majority of their 

beneficiaries are nonwhite, or, in the case of migrant programs, 

- 211 1976 appropri ations for health, mental health, and disease 

prevention programs, including $135 million for swine flu, a 

one-time expense, was $2.2 billion. 

The total figure does not include Public Health Service hospitals and related facilities, which are not subjects of this 

paper. These faci 1 i ties provide care to their beneficiaries 

(mostly Coast Guard personnel and merchant seamen) because they 

are part of federal organizations formerly on a quasi-mi 1 i tary 

nature rather than because they are particularly needy. 
Hispanic. 221 Other data suggests that at least 80 percent of patients in the projects have incomes below the federal poverty line. 

Thus both financial and nonfinancial barriers to care are overcome 

for nonwhites in areas where projects exist. 

Of particular interest are indications that the continuous 

care received in these programs is more effective, less hospi talizati on i s requi red, and total heal th-care expenditures per person 

are lower than if the patients had to rely on a financing plan a1 one. 231 Many, but not a1 1 , comprehensive care programs i ncorporate special efforts to address problems that affect nonwhites disproportionately. Outreach, community workers, and home visits are 

usual ly among the services offered. Other exarnpl es of problemoriented services offered are screening programs for hypertension 

and sickle cell anemia or clinics and health education programs for 

diabetics. The tendency has been for the executive branch to emphasize straight medi cal care, however, which is more often reimbursi bl e 

through medicaid, at the expense of the socially oriented services. 

Another problem is that some programs fail in dealing with the general 

medical needs of patients who are drug abusers or alcoholics. 

- 221 Data compiled by U.S. Department of Health, Education, and Welfare, Office of the Assistant Secretary for Health, Budget 

Branch. 

See Leon Gordis, "Effectiveness of Comprehensive Care Proqrams 

i n Preventing ~heumatic Fever," New ~n~l and Journal of ~edici ne, 

289: 331 -335 ( 1973) ; John Newport and Mi 1 ton Roemer, "Comparative 

Peri natal Mortal i ty under ~edi cal Care ~oundations and Other 

Delivery Models," Inquiry, 12:lO-17 (March 1975); C. M. G. 

Buttery and Lula Holland, "The Use of Health Care Aides in a 

Medical Assistance Program, " unpubl i shed report from the Portsmouth, Virginia Department of Public Health to HEW Social and 

Rehabilitation Service, February 1974; M. Klein, et al, "The 

Impact of the Rochester Neighborhood Health Center on the Hospital ization of Chi1 dren," Pediatrics, 51 :833-838 (1973) ; S. S. 

Bellin, H. J. Geiger, and D. Gibson, "Impact of Ambulatory Health 

Care Services on the Demand for H'ospi tal Beds ," New England 

Journal of Medicine, 280: 808-81 2 ( 1969). 
Table 7. DISTRIBUTION OF FEDERAL HEALTH SERVICE PROGRAM BENEFICIARIES, 

BY RACE AND ETHNICITY a/ 

Group Served 

A1 coho1 , Drug Abuse, and 

Mental Heal th Administration Center for Disease Control 

Communi ty Drug Lead Based 

Mental Alcohol ism Abuse b/ Paint 

Heal th Community Community Poisoning in Rat c/ Venereal ImmuniCenters Programs Programs Chi 1 dren Control Di seases zation d/ 

Total Beneficiaries 

(thousands) 1,843 186 153 500 5,000 9,700 15,000 

IU 

m Total White (percent) 88 68 63 40 35 42 40 

Hi spanic (percent) 5 5 12 30 25 N A N A 

Other White (percent) 83 63 51 10 10 N A N A 

Total Nonwhite (percent) 12 3 1 36 60 65 58 60 

Bl ack (percent) 11 18 35 60 65 N A N A 

American Indian 

(percent) - - 12 - - -- -- N A N A 

Other (percent) 1 1 - - -- - - N A N A 

- a/ Estimates compiled by Budget Branch, Office of the Assistant Secretary for Health, HEW, for the 

following programs and fiscal years: ADAMHA, 1976; CDC, 1975; Indian Health Service, 1975. Estimates 

for Community Health Centers, Family Planning, Migrant Health, Maternal and Infant Care and Children 

and Youth projects from Bureau of Communi ty Heal th Services, Heal th Services Admini strati on, 

BCHS-NHI Study, 1976. 
Table 7. (continued) 

Health Services Administration 

Maternal Chi 1 dren 

Comnuni ty and Infant and Indian 

Health Family Migrant Care Youth Health 

Group Served Centers b/ Planning Health Projects Projects Service 

Total Beneficiaries 

(thousands) 2,000 

Total White (percent) 12 

Hispanic (percent) 3 

Other White (percent) 9 

Total Nonwhite (percent) 87 

Bl ack (percent) 84 

Arneri can lndi an 

(percent) -- 

Other ( percent) 3 

- - - - - 

- b/ Total includes some unclassified recipients. 

- C/ Residents of target areas. 

- d/ Doses admi ni stered. 
Programs Deal i ng wi th Specific Condi ti ons. Some programs treat 

problems with a strong mental health component. They provide grants 

for community mental health centers serving specific geographic -areas 

and alcoholism and drug-abuse projects serving target populations. 241 

In addition to direct federal funds, up to 30 percent of the costs of 

community mental health centers may be covered by payments made by 

patients or insurers, but such revenues are negligible for drug and 

a1 coho1 programs. 

There are approximately 2.2 million beneficiaries of these 

mental heal th programs. The proporti on of nonwhi tes served compares 

with some recognized indicators of need as follows: 251 Admissions 

to public inpatient psychiatric facilities occur nearly twice as 

frequently among nonwhites as among whites and 22 percent of all such 

admissions are for nonwhites. a/ Yet community mental health centers, which are supposed to decrease institutionalization, serve a 

population that is only 12 percent nonwhite. This may be indicative 

of the location of the centers, lack of outreach and effective 1 iaison 

with the community, or the lack of racial sensitivity referred to in 

the first section. 

Narcotic drug abuse is estimated to occur four times as frequently among nonwhites as among whites from the fact that roughly 

45 percent of a1 1 narcotic drug mentions to the Drug Abuse Warning 

Network were nonwhite. 261 Drug abuse community programs serve a 

population that is 36 percent nonwhite. This may reflect a desire to 

balance the focus of projects between abusers of narcotics and abusers 

of other drugs, of whom a much smaller proportion are nonwhite. 

- 241 Despite the fact that grantees are local agencies, mental health 

programs operate wi th consi derably more state involvement than 

do the comprehensive care programs. In the case of alcoholism 

and drug abuse, formula grants a1 so go to states for more general purposes. 

- 251 If criteria for funding are to be reconsidered, other indicators 

may also be relevant. 

- 261 National Institute of Mental Health, Util ization of Mental Health 

Facilities, 1971, op. cit. 

Project DAWN 111, op. cit. 
A1 cohol ism may a1 so be more prevalent among nonwhites since they 

account for 17 percent of all deaths from alcoholic cirrhosis. 281 

The proporti on of nonwhites served by HEW ' s a1 cohol i sm community 

programs -- 31 percent -- reflects in part a policy of filling gaps left by state, local, and private programs; only one of those gaps is 

the lack of services for nonwhites. 

Other programs deal with specific conditions of a public health 

or preventive nature. They provide grants, primarily to local agencies, for family planning services, treatment and prevention of leadbased paint poisoning in chi 1 dren and venereal diseases, immunization, 

and rat control. a/ 

While beneficiaries of these programs are counted in varying 

ways, Table 7 indicates that a1 1 except family planning serve a 

majority of nonwhites. This is especially true of the lead poisoning and rat control programs, which are located in inner-city areas. With 

respect to continuity , having these services del ivered by separate agencies may further fragment all health care. It does provide emphasi s on fol1 owup for specific probl ems, however, and in some 

cases ( f ami ly pl anni ng for teenagers; venereal di sease) , pati en ts 

might not seek the service in a comprehensive setting. 

- 281 Reported by National Institute on Alcohol Abuse and Alcoholism. 

- 291 A small hypertension program was enacted in 1976 but has not 

yet been implemented. Hypertension screening and treatment are 

also under study by the National Institutes of Health, where 

results of cl ini cal trial s indicate more research into effective 

treatment is needed. 

CHAPTER IV. APPROACHES TO IMPROVEMENT 

In this section, possible ways of improvi ng the responsiveness 

of each type of federal program to nonwhite health care needs will 

be discussed, and short-term steps will be described. In addition, 

because of widespread interest in a national health insurance plan 

and in view of the Carter Administration's announced intention to 

propose such a plan, actions consistent with more comprehensive financing will also be described. The descriptions are brief, and 

a1 ternati ve possi bi 1 i ties are not rigorously evaluated. 

FINANCING PROGRAMS 

In general , inequities in heal th-fi nanci ng programs mi ght be 

addressed by equal i zi ng a1 1 benefits and 1 eve1 s of el i gi bi 1 i ty through 

mandatory federal minimum standards. Then, with the lesson of medicare in mind, incentives might be provided to deal with remaining 

problems. A major question either now or if national health insurance 

is enacted is whether monetary incentives alone can equalize access to 

care or address questions of effectiveness. 

Short-Term Steps 

The remai ni ng f i nanci a1 barriers in the medi cai d program mi gh t 

be overcome by a federal ly mandated comprehensive benefit package 

and uniform standards for eligibility, adjusted for differences in 

the cost of 1 iving. This could be done with or without a complete 

federal takeover of the program, but the federal government would 

probably have to bear the cost of the additional benefits -- roughly 

$10 or $11 billion in 1978. I/ Financial barriers in medicare might 

be addressed by cost-shari ngprovi si ons that are graduated by income 

and by requiring physicians to accept the "assigned" fee without 

bill i ng patients for additional amounts. Both these changes might 

1 / U.S. Congressional Budget Office, "Short-Term Options for the - 

Medicaid Program," in Working Papers on Major Budget and Program 

Issues in Selected Heal th Programs, U .S. House of Representatives, 

Committee on the Budget, December 10, 1976. 
have to await enactment of national health insurance, however. The 

first would require major changes in the administration of medicare 

and the second might cause some physicians to withdraw from participation in the absence of a universal program. 

Of the nonf i nanci a1 barriers, shortages of manpower mi ght be 

parti a1 ly addressed by reimbursement and tax i ncentives to serve in 

areas where shortages exist. It should be noted, however, that 

studi es have shown f i nanci a1 factors to be re1 ati vely unimportant . in 

determining whether physicians locate in these areas. 2/ Thus, other 

i ncentives would a1 so be needed. Assuring reimbursement of nurse 

practitioners and paramedical personnel is another way of addressing 

shortages, but care should be taken that an appropriate balance of 

services by physicians and nonphysicians i s mai ntai ned. 

Participation of physicians in medicaid might be increased by 

bringing rates for their services closer to those in the private 

sector and stream1 i ni ng admi ni strative procedures to speed up reimbursement. A more drastic remedy would be to require physicians to 

participate as a condition of licensure or of receiving other federal 

funds. Di scrimi nation coul d be attacked by more vigorous enforcement 

of Title VI of the Civil Rights Act. A number of witnesses complained 

at hearings held in 1973 that enforcement in the health area had 

fallen off precipitously and that reliance on state action was proving 

ineffective. At that time there were 89 employees assigned to health 

and social services in HEW'S Office of Civil Rights. 31 While the 

number of employees authorized for enforcement of ciTi1 rights in 

these areas has risen to 111, the published operating plan for fiscal 

1977 of the Office of Civil Rights indicated that only 19 persons 

are actually assigned to health and social services. - 4/ 

2/ Sincl ai r Coleman, Physician Distribution and Rural Access to - 

Medical Services, Rand Corporation Contract No. R-1887-HEW, 

prepared for the Health ~esources Administration, Apri 1 1976. 

3/ U.S. House of Representatives Committee on the Judiciary, Sub- - 

committee on Civil Rights and Constitutional Rights, op. cit. 

4/ Federal Regi ster, 41 : 196:41776-41797, September 23, 1976. - 
Continuity could be encouraged by assuring reimbursement of 

government-sponsored programs for the del ivery of services and other 

f reestandi ng cl i ni cs and by incentives for prepaid care, del i vered 

by the private or public sector. In addition, it has been suggested that some of the high-volume urban providers, or "medicaid mi 11 s," 

do provide care efficiently, and their qua1 ity might be upgraded by aff i 1 iations with nearby hospital s and training programs for physi- cians. 51 Finally, treatment of conditions affecting nonwhites 

di sproportionately (alcohol ism, drug abuse, hypertension) coul d be 

reimbursed at a higher rate than other services. It should be noted, 

however, that a financing system may not be specific enough to ensure 

that these "preferred" services are made available to those who really need them. Expensive distortions and abuses might occur. 6/ 

Steps Consistent with National Health Insurance 

National health insurance offers an opportunity to overcome 

financial barriers faced by near-poor nonwhites as well as those now 

covered by medicaid. A mandatory, uni versal program woul d accompl i sh 

this best. A1 1 persons could be provided equal coverage whether or 

not they are now enrolled in private insurance plans through their 

employers. Any sharing of costs or payment of premiums could be 

minimal for the poor and near-poor and graduated smoothly by income, 

avoiding the earnings disincentive that may be the result of a large 

step up in required contributions. Fi rst-doll ar coverage of initial 

visits to a physician might be desirable for the poor and near-poor. Any sharing of costs for those with higher incomes should not be so 

high as to discourage anyone from seeking needed primary care. 

Nearly all the other short-term steps described above would 

also apply. One difference is that physicians would be more likely 

to participate without coercion i n a uni versal program, but avoidance 

of poor nonwhite neighborhoods and overt raci a1 di scrimi nation could 

possibly increase. 

51 Conversation with Martin Paris, M.D., Director, New York City - Medical Assi stance Program, November 1976. 

6/ An example of such a distortion is the earlier growth in New - York City of private methadone clinics, the quality of which is 

difficult to control. 
RESOURCE PROGRAMS 

Resource programs have been too recently revised to suggest 

many additional steps for dealing with racial inequities in health 

care. One major question is how far regulation of the private sector 

can go in assuring access to nonwhites, particularly if those to be 

regulated are individual s rather than i nsti tutions. 

Short-Term Steps 

Since criteria and guidelines for the new planning and regulatory network are developed at the federal level, access to care 

for specific popul ations, i ncl udi ng nonwhites and poor persons, coul d 

be made an explicit goal. The program would then not merely seek to 

prevent or eliminate overall surpluses but would also ensure that 

f aci 1 i ties serving nonwhites are treated with due consideration. 

The tradeoffs necessary to assure access to nonwhites could be facilitated further by extending control of existing as well as new institutions to the agencies. Renovation of needed but outmoded inpatient 

f aci 1 i ties , especi a1 ly in i nner cities, and construction of outpatient facilities could be funded at more than the present minimal 

1 eve1 s and possi bly di rected toward specific areas. 

The 1976 health manpower legislation can put many more new 

physicians in areas where shortages exist. Considerable attention 

(by both the federal government and the cornmuni ties served) to the way 

in which the settings in which physicians practice are organized 

coul d i ncrease productivi ty and he1 p attract and keep physicians. 

Organized community heal th centers, for exampl e, have succeeded i n 

attracti ng physici ans to shortage areas. National Heal th Servi ce 

Corps sites may be seen as smaller, more flexible versions of delivery 

programs rather than as isolated off ice practices. The federal 

government coul d a1 so provide more technical assistance to establish 

health mai ntenance organizations in underserved areas. Links with 

teaching institutions are important to physicians in any shortage 

area, and problems of physical security should be addressed in innerci ty nei ghborhoods. 

In addition, more paramedical personnel and nurse practitioners 

who will practice in poor nonwhite areas could be trained. The latter 

are especially we1 1 equipped for the patient-education function of 

primary care. Af fi rmati ve action programs in medical education could 

be revitalized by funding private organizations as well as schools 

to recruit and prepare potenti a1 physicians for professional training. 
Continuing fi nanci a1 support throughout medical school could be 

assured by funding at high level s scholarships for disadvantaged 

students and those that obligate graduates to practice in shortage 

areas. Finally, education could be focused more heavily on nonwhite 

heal th-care probl ems. 

Steps Consistent with National Heal th Insurance 

The greater federal f i nanci a1 i nvol vement suggested by most 

national heal th insurance proposal s coul d call for addi ti onal regulation of resources. National health insurance, moreover, may increase demand for primary care. If financial incentives alone are 

not sufficient to assure nonwhites adequate access in the face of 

rising demand by all persons, there are two forms of more direct 

intervention: expanding government-sponsored programs or exerting 

control over the locations in which physicians practice. The latter 

may be advantageous in that it uses private rather than public sector 

resources. Such control may be resisted by private physicians, however, and if they are forced to serve patients they consider undesirable, individual physicians may provi de unsympathetic care. 

HEALTH SERVICE PROGRAMS 

Most health service programs are reaching and serving nonwhites 

more effectively than financing programs that depend to a large degree 

on the private sector. There are two ways of using these programs to 

correct raci a1 inequities i n heal th care: Expanding thei r funding 

and the populations they serve and further improving their focus on 

nonwhite health problems. 

Short-Term Steps 

Expansion of those programs serving nonwhites most effectively 

coul d be accomplished by additional funding. Without additional funding of service programs, but consistent with the short-term expansion 

of medi cai d di scussed above, community and mi grant heal th centers 

could serve roughly 40 percent more people because their reimbursements would increase. - 71 While maternal and infant care and children 

- 71 Medicare and medicaid would spend most of the additional funds 

-- possibly 1 ess effectively -- even if service programs did 

not expand. 
and youth projects have a1 so been effective in aiding nonwhites, it 

woul d be more di ffi cul t to achi eve expansion through increased reimbursements, because such projects are subsumed in a formula grant to 

states. Some expansion of the population served with no increase in 

overall appropriations might be possible for mental heal th programs. 

This is because federal funding for individual centers is set to 

decline each year, freeing money.for new projects. 

Steps to improve care in existing programs might include 

special family-planning projects for teenagers (because of the higher 

maternal and infant mortality rates for teenagers in general and 

especi a1 ly nonwhite teenagers) ; research, outreach, and treatment 

designed to reach nonwhites in community mental health centers; a 

greater emphasis on nutrition and the education of patients within 

a1 1 comprehensive care programs; and requirements that mental health 

and medical treatment programs learn to deal with alcoholic and drugabusing patients rather than excluding them. In addition, criteria 

for funding could be reexamined and priority given to nonwhite locations for any new projects. This would apply to community mental 

health centers, which serve a comparati vely 1 ow proportion of nonwhites, but also to such programs as community health centers, which 

can be used to increase access in nonwhite shortage areas. 

Steps Consistent with National Heal th Insurance 

If neither financing nor regulatory solutions can guarantee 

access to care, organized service delivery programs may be the "resource of last resort." Such programs might al so help ensure that 

national health i nsurance funds are spent more effectively . Whi 1 e 

some have argued that government programs for the disadvantaged perpetuate " two class" health care, the recent evidence from the medicaid 

program indicates that this separation has evolved in the private 

\ sector as well. 

National heal th insurance providing broad health coverage for 

low-income persons would probably cover roughly 80 percent of existing 

costs in community health and migrant centers, as opposed to the 30 

percent of costs now covered by payments made by patients. (About 20 

percent of the costs in such programs, attributable to social and 

supporti ng servi ces, woul d remain uncovered). The increased reimbursement would a1 low the programs to increase the number of persons 

served more than threefol d, whil e still confining additional expendi tures to the financing plan. To the extent that insurance covered 

mental heal th, a1 coho1 i sm, and drug-abuse services, these programs 

could a1 so expand further with added costs in the financing plan 
only. It might be easier, however, to control and coordinate mental 

health and substance-abuse services if they were funded directly 

through centers operated or approved by the government. 

CONCLUSION 

Evidence i ndi cates that nonwhites have made important gains 

in health status in the 1 ast 20 years. They remain 1 ess heal thy than 

whites, however; they still get less health care, and the care they 

do get may be less effective. Four factors contribute to this situation: financial barriers to care; nonfi nanci a1 barriers such as 

shortages of providers and di scrimination; 1 ack of continuity when 

care is received; and too 1 ittle emphasis on some conditions affecting 

nonwhites. Experience with present federal programs indicates that 

financing solutions a1 one may he1 p perpetuate whi telnonwhi te heal th 

differentials. Thus, approaches for deal ing with remaining problems 

woul d include not only i ncreased financing, but a1 so real 1 ocation of 

resources and the ability to provide services directly where the 

pri vate sector fa1 1 s short.