By: Mark A. McComb, CQE, Ph.D.
Associate Professor of Management Science
Mississippi College School of Business
At the time it was hard to adequately assess the extent of the damage caused by Katrina, but seven years later — at an estimated cost of approximately $105 billion (2010 adjusted dollars) — Katrina would become the most expensive natural disaster in U. S. history. Indeed, Katrina would be the most expensive by a wide margin costing more than the next four most expensive hurricanes (Andrew, Ike, Wilma, and Ivan) combined. Perhaps the label “natural disaster” facilitates the ability of mere humans to take in the associated cost and destruction more easily than the otherwise slow accumulation of such overwhelming costs in something like health care. But the costs of health care are real and devastating just the same. Just as Mississippi was in a precarious geographic position as Katrina made its way across the Gulf of Mexico, the state is also in a similar precarious position as the nation attempts to come to grips with the economic “hurricane” represented by the burgeoning costs of health care. Just why this is the case is a function of many complex variables and some basic demographic ones.
Let’s begin with familiar assertion: Mississippi is not a wealthy state. With a Median Annual Household Income (2010 dollars) of $36,860, Mississippi is at the very bottom of all states (sometimes tied with Arkansas, depending on the year). Of course, as any statistician will tell you, somebody has to be on the bottom. Yet, this simple fact has many unpleasant implications as health care costs continue to rise and continue to absorb an increasing percentage of a family’s income. According to data from The Kaiser Family Foundation, in 2010 almost 21% of Mississippians reported that they “could not see a doctor in the past 12 months because of cost.” And, yes, that 21% number is the highest in the nation (though Louisiana and Texas were close seconds with almost 19%). So, let’s state the obvious: access to health care services most certainly has an economic dimension (even in a state like Mississippi where there is considerable financial support from both the State and Federal government).
State and Federal spending on health care in Mississippi is significant and here is where some of the demographics of the State are relevant. For Fiscal Year 2009 Medicaid payments per enrollee in Mississippi were approximately $4,890. While this is a much lower amount per enrollee than many other states, the fact that almost 26% of the population of Mississippi in 2009 received Medicaid payments (placing Mississippi in the top ten states in the nation for percent of the population enrolled in Medicaid) indicates the extent to which Mississippi is dependent on State spending on health care. In 2009 approximately 17% of the residents of Mississippi where recipients of some form of Medicare spending and the average amount spent per resident was about $10,667. Moreover, in 2009 Mississippi had the highest percent of its residents (24.3%) in the Age 0 – 64 range receiving Medicare payments. And it is important to note that these spending levels occurred while Mississippi had 17.3 physicians per 10,000 residents (the second smallest number in the nation) and approximately 19% of the residents of the state were uninsured.
If it is true that the United States is a nation of people who muster the required will to respond in a crisis, then there is some reason for hope, since surely the growing costs of health care services must be seen as an escalating crisis. This is particularly true for the residents of Mississippi. And this is particularly true for Mississippi businesses. No other State has a stronger self-interest in the ability of the nation to craft a sustainable response to the pressing issue of health care costs. The data simply will not allow us to ignore the present costs or the future implications.