Saturday, December 27, 2014

Another One Percent to Watch: Those Who Use the Most Health Care

When it comes to health care costs, we are not equal. Some people consistently generate much higher spending than others. One percent of the population accounted for 20.2% of health care spending in 2008 and 21.8% in 2009. It shows that the biggest driver of health care costs is care for those who are the most ill.

Another One Percent to Watch: Those Who Use the Most Health Care

When it comes to health care costs, we are not equal. Some people consistently generate much higher spending than others.

A new report from the Agency for Healthcare Research and Quality tells the tale. One percent of the population accounted for 20.2% of health care spending in 2008 and 21.8% in 2009. The average bill for them was $90,061. Twenty percent of those in the highest spending percentile remained there during both years.

Beyond the top 1%, health care spending was still concentrated. The top 10% accounted for almost 63.6% of spending, and 44.8% of those in this group remained there during both years. The top 30% accounted for almost 89%, with 63.1% remaining in this group from year to year.

At the other end of the spectrum, the cheapest half of the population accounted for only 3.1% of spending in 2008 and 2.9% in 2009. About three-quarters of them remained low cost in both years.

Who was in the high-cost and low-cost groups? AHRQ found that the biggest health care spenders were, not surprisingly, more likely to be in fair or poor health. They were also more likely to be elderly, female, non-Hispanic, and white. Low spenders were more likely to be in excellent health, and to be children or young adults, male, and Hispanic.

Low health care spenders were also more likely to be uninsured. Among those in the lowest spending half of the population, 25.9% lacked coverage during the two years studied. In the overall population, the figure was 15.5%. Among the highest 10% of spenders, only 3.6% lacked insurance.

What can we learn from these numbers?

First, not surprisingly, those without insurance are less likely to use health care services. Some of them may decline coverage because they are in good health and don’t expect to need much care. However, many undoubtedly need services but can’t get them because they have no means of payment.

Second, the biggest driver of health care costs is care for those who are the most ill. And once people join the ranks of high spenders, they are likely to stay there.

What could we do to reduce spending among people in this group? One approach would be to improve prevention. Another would be to better coordinate care.

The AHRQ Report also included a piece of encouraging news. The percent of health care spending accounted for by the top 1% has been dropping. In 1996, it was 28%. That means the highest cost patients are eating up a smaller share of total spending than they did a decade and a half ago. Perhaps some of the efforts to improve health care efficiency have been working.

Whatever the trend, to control health care costs, we would do well to keep attention focused on the top 1%. After all, that is where the money is.

 

About this blog

Check Up covers regional health news and a wide array of healthcare topics from pharmaceutical happenings to patient safety. Read about some of our bloggers here.

Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Robert I. Field, Ph.D., J.D., M.P.H. Professor, School of Law & Drexel School of Public Health
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