A Tiny Fraction of People, a Huge Chunk of Medical Spending

Any effort to rein in health care costs needs to account for this graph, showing what percent of medical expenses attributed which group of patients.  (Martin Gaynor posted this picture in a recent blog.)

I use another version of this in my teaching:

Either way, what we have here is an AMAZING  concentration of spending. If we can gain efficiency in caring for the sickest patients, we can cut into run away health care costs.  But Gaynor makes another very important point about this concentration of spending: it means that if we hope to reduce health care costs by asking patients to bear a larger percentage of their expenses, we are quickly going to run into problems. These very sick folks will either go bankrupt or they will reach the point where insurance takes over all their costs. (Or, perhaps more likely, both will happen.)

Looks like we need to rely on more than “skin in the game” to fix our health care cost problem!

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