California's long-standing and severe smog problems cause many avoidable hospitalizations that added $193 million in hospital costs between 2005 and 2007, according to a RAND Corp. report.
The report singled out California because the Environmental Protection Agency says California has more people living in areas that don't meet air quality standards than any other state.
The researchers broke the cost of that dirty air down by the number of patients treated at sample hospitals in certain high air pollution counties in the state, and analyzed avoidable spending for treatment of pollution-related illnesses for each county.
Similar to tobacco litigation settlements that brings millions of subsidies to states and counties, the authors suggest that polluters rather than health plans, employers, patients, and government health payers, might be asked to pay to treat patients harmed by those air contaminants.
"From an economic point of view, when people impose harm on others and don't account for that in their behavior, markets don't work perfectly," says John Romley, the report's lead author and economist. "One potential remedy—one can debate how effective it would be if put into practice—would be to make [polluters] pay for harms they impose on others."
"Medicare or Medi-Cal might send the bill [for hospital care for pollution related illnesses] on to polluters, factories, or drivers who drive longer distances, instead," he adds. "I'm not advocating this, but it's not an unreasonable idea."
According to the RAND report, "improved air quality would have reduced total spending on hospital care by $193,100,184 in total." Medicare and Medi-Cal [Medicaid in California] would avoid paying $103.6 million and $27.3 million, because 9,247 Medicare and 8,982 Medi-Cal patient visits would be avoided.
"The sponsors of this work are interested in trying to show that more people have a stake in lowering air pollution levels," he says of the report that was financed by the William and Flora Hewlett Foundation.
Mary Nichols, chairman of the California State Air Resources Board, which monitors pollutants statewide, says the report "sheds some light on another aspect of air pollution by focusing on the healthcare costs we all pay for dirty air.
"Not surprisingly, in a state where three out of every four people still breathe air that fails to meet federal health standards, this study shows that Californians are paying with both their wallets and their lungs," Nichols says.
According to the report, health insurers and other private payers would avoid spending $55.8 million, because 9,029 patient visits would not have been necessary.
Automobile manufacturers, petroleum product producers or polluting factories could be likely candidates, he says.
The study is the first of its kind to equate hospitalizations throughout the state with air pollution, and did so on a county-by-county basis based on levels of pollution in those areas, said the authors. It reviewed costs associated with admissions to acute care hospitals for patients with cardiovascular and respiratory diseases, and for patients treated in emergency rooms for asthma.
Romley used hospital discharge cost statistics maintained by the Office of Statewide Planning and Development and used statistical modeling to account for respiratory or cardiovascular illnesses that instead were caused by lifestyle factors, such as smoking, bad diet, occupational risks or obesity.
The report, entitled "The Impact of Air Quality on Hospital Spending," did not factor in the cost of office visit care provided by physicians or anywhere else, such as outpatient settings, or other costs of these illnesses, such as loss of work.
Excess particulate matter causes heart attacks, acute and chronic bronchitis, and asthma. And ozone in excess significantly contributes to respiratory events, such as asthma attacks and other respiratory conditions and lung function constrictions, according to the report.
"We only looked at those areas where there is ample evidence that higher levels of pollution at various points will cause this many illnesses," Romley says.
Also, the most affected areas in the state are those with the most people, such as nearly all of coastal Southern California, the San Joaquin Valley, the San Francisco Bay area, and metropolitan Sacramento.
For example, in Fresno, one of the high particulate pollution areas of the state, failure to meet federal air standards meant 384 patients had to be admitted to St. Agnes Medical Center or were treated in the emergency department, totaling nearly $3 million. Nearly two-thirds of that cost was paid by Medicare, according to the report.
In Lynnwood, just south of Los Angeles, which fails to meet federal clean air rules, 295 patients were admitted to St. Francis Medical Center's inpatient units or were treated in its emergency room at a cost of $1.2 million, the reported added.
The report also broke down spending by health plan. For example, Kaiser Foundation Health Plan Inc. spent $30 million for 1,827 patient care events that would have been avoided had those areas of the state met air pollution standards. Secure Horizons was next with $10.4 million for 899 patient care events.
As expected, high pollution counties in the state had the highest spending. Los Angeles County care related to illnesses caused by smog had the highest expenditures, followed by San Bernardino and Orange Counties, RAND reported.