We have an outlier problem when it comes to healthcare spending. Sure, there are some services we provide far too often for far too many people. And in the United States, at least, most of the healthcare services we provide for patients are far too expensive. But a closer look at healthcare spending data reveal that a huge part of our healthcare spending problem comes from a tiny portion of patients. Take for example this picture, courtesy of Charles Ornstein, illustrating how we spend money for Medicaid patients. Medicaid is a state/federal program to offer health insurance primarily to low income people. As this picture shows, almost half of Medicaid spending is concentrated on just 5% of the Medicaid population. You heard me right – 5%!
To control healthcare expenditures, we need to pay close attention to the small sliver of patients that account for a huge chunk of our healthcare spending.