Should your doctor ask about your net worth during your next physical exam? Maybe.
A sudden and dramatic loss of money can lead to premature death, according to new medical research.
Americans aged 50-plus who suffered a sudden and large loss of wealth were 50% more likely to die over a 20-year period than their age group peers whose financial picture remained stable or improved, according to a study recently published in The Journal of the American Medical Association (JAMA).
Such “negative wealth shocks,” defined as a loss of 75% net worth in two years or less, may have caused stress, inflammation or high blood pressure, heightening the risk of heart attack or stroke. To save money, negative wealth shock victims may skip important medical visits and critical but expensive prescriptions. Substance abuse and suicide prompted by financial distress may also be factors.
While earlier research, much of it done in the wake of the Great Recession, has documented the short-term health problems associated with financial disaster (depression, suicide, high blood pressure), this is the first examination of the long-term negative impact of suffering a money meltdown.
The study, conducted by University of Michigan researchers, tracked the physical and financial health of 8,714 Americans born between 1931 and 1941. They were followed from 1994 until death or 2014. The scientists calculated each participant’s net worth at the outset, and every year after that. They included retirement account balances, other stock market investments, business ownership and the value of homes, cars and other “substantial assets.
Over the course of the study, a stunning 2,430 participants – about 26% – suffered a negative wealth shock. Among the common causes: crushing medical bills, divorce and the death of a spouse. Women are more likely than men to experience a negative wealth shock. The mortality rate for these financial unfortunates (both men and women) was 64.9 deaths per 1,000 person-years. That’s more than double the rate for those who remained financially stable.
The health impact of a negative health shock was more pronounced among those who lost a home.
Negative wealth shock is apparently an equal opportunity killer. The 50% increase in mortality held up across the spectrum from rich to poor. Interestingly, participants with higher levels of risk-aversion also suffered higher rates of early death after taking a heavy financial hit.
The study adds further evidence that poverty is a health risk. For the 749 people who began the study with no assets or negative net worth, the mortality rate was 73.4 deaths per 1,000 person-years. That’s 67% higher than for those in the financially stable group, the study concludes.
The approximately 50% relative increase in mortality that follows a negative wealth shock is similar to the increase associated with a new diagnosis of coronary heart disease, according to a JAMA editorial that accompanied the study findings.
The researchers say more study should be done on this topic with an eye towards determining how public policy might be used to soften the impact of negative wealth shock.