The 80-20 Rule at Work in Health Care Spending

July 7th, 2011 by 1 Comment

Another interesting report from the National Center for Policy Analysis:

About 5 percent of the population is responsible for almost half of all health care spending in the United States and for rising premium rates, according to a new report from the National Institute for Health Care Management Foundation, says the National Journal.

The report stated about half of the U.S. population accounted for only 3.1 percent of all expenditures. But 10 percent of the population hogged 63.6 percent of all health spending, the survey found. The top 5 percent of the population accounted for 47.5 percent of all spending, and the top 1 percent accounted for 20.2 percent. While the average person incurred about $233 in costs in 2008 for health care services, those in the top half of spending cost insurers, the government or themselves $7,317. The top 1 percent cost $76,476.
Adults 55 and over made up a larger proportion of the high-spending group, while those in the lower spending group tended to be younger. The report also found that people with at least one chronic health condition were two to four times more likely to have spending in the top 5 percent group.

The likelihood increased as the number of chronic conditions rose. Nearly half of people in the top 5 percent of health care spending had high blood pressure, a third had high cholesterol and a quarter had diabetes.

As health care spending rose, so did private health insurance premiums.  During the 2005 to 2009 stretch in which health care spending rose, premiums for private health insurance increased by nearly 15 percent.

One thought on “The 80-20 Rule at Work in Health Care Spending

  1. OK. Now, can we get the make up of that group, the demographics, such as: wages and employment status, complete age break down, wealth, ethnicity, geographic distribution, etc? Thanks….

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