Where Is the Spending, 2016 Style

By November 7, 2016Commentary

Okay, I admit it is a little odd to eagerly anticipate certain pieces of research, but every year in the fall I can’t wait to see the latest Agency for Healthcare Research & Quality briefs on health spending concentration and persistence.  The one just released uses 2014 data to identify characteristics of people who fall in high and low spending buckets.  (Stat. Brief)   Overall, 10% of the population accounts for about two-thirds of spending, while 50% represents an astoundingly low 2.8% of all US health care expenses.  15% of the population reported no health spending in 2104.  35% said they spent less than $912 but more than zero.  40% spent between $913 and $11,109.  And for that top 10%, spending was over $11,110.   So right off the top, one thing to notice, again, is that even in that top 10% for a lot of the people there isn’t enough spending to generate an ROI on intensive cost management efforts.

Three-quarters of the no-expenditure group is under the age of 45.  40% of the highest spending group is over 65.  That age distribution is what we would expect.  Also no unexpected, there appears to be a correlation between lack of insurance and level of spending, with the uninsured representing 13% of those with no health insurance.  What isn’t clear is whether people don’t get health services because they don’t have insurance or do people with low health spending avoid paying for health insurance.  I suspect it is more the latter.  Another expected correlation is between chronic disease and spending.  In the high-spending category, 75% of people have at least two common chronic conditions, while in the no-spending group 75% have none of these conditions.  It is interesting, however, that 13% of high spenders have none of the conditions.  This suggests that certain acute episodes like a serious car accident put some people in the high-spending tier.  For those people who have at least some health spending, there is almost no inpatient use among the low-spending tier and there is relatively heavy spending for inpatient in the high-spending category.  Drugs account for a more significant proportion of health spending among the middle-spending group.  Be useful to see more work on the interaction between certain categories, like age and insurance status.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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