Life expectancy impacted by several factors

By DAVID MOON, Moon Capital Management, LLC
May 15, 2011

Years ago, friends in the Knoxville hospital industry often told me that our city was “over-hospitalized,” not in terms of numbers of beds, but based on the number of different hospital systems. One executive described it as “there being too many hospital business cards for a town Knoxville’s size.”

I only occasionally thought about this, such as three years ago when one of the systems went away - and with it some business cards. The recent discussion of the possible sale of Mercy Health Partners to Health Management Associates has caused me to think about it again.

Does it really matter that Knoxville has five hospital systems or 2,175 hospital beds? What difference would it make if some of those went away?

The postponement of death is not the only quality of life and health measure of a region. But mortality rates are one way to measure the health of a population which presumably, should be affected by all aspects of the healthcare system.

People actually tend to die at younger ages in states with more hospital beds per capita.

For example, Tennessee has more beds per capita than average, and our life expectancy is below average.

Interestingly, although we have more hospital beds per capita, we have fewer doctors for each person, and that actually does seem to have an impact.

Life expectancy is a complicated issue, influenced by a myriad of factors, including personal decisions and genetics - both of which have a geographic bias to them.

Other than individual factors, are there population-wide observations that can help predict life expectancy?

It may surprise you that education isn’t a predictor of longevity, at least for post-secondary degrees. All of the mortality gains from increased education come from graduating from high school. Earning a bachelors degree or higher doesn’t add significantly to your life expectancy, regardless of the state in which you live.

The best predictor of longevity is monetary.

States where the Gross Domestic Product increased most rapidly over the past four years also enjoy the longest life expectancies for their citizens.

An even stronger correlation exists based on persons living below the poverty level. It was the most statistical significant factor I found to describe the life expectancy on a state-by-state level. The relationship is practically linear with no outliers.

In Tennessee, 15.5 percent of the population lives below the poverty level, compared to 12.82 percent for the entire country. Tennesseans’ life expectancy is almost two years shorter than the US average of 76.8 years. In Hawaii, where life expectancy is 80 years, only 9.1 percent of the population lives below the poverty level.

Most interesting is that, like incomes, the life expectancy gap between the wealthy and the poor has been widening. In the past twenty years the life expectancy difference between the poorest and most affluent quintiles has more than doubled.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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