It is pretty well-known at this point that a few patients account for a lot of spending in the health system. A report from Healthentic confirms this phenomenon in the employer-based health coverage world and looks at characteristics of high-cost patients. (Healthentic Report) The study looked at a relatively small population, 400,000 people, but it probably is generally representative. About 1% of this group had annual health spending over $50,000; and in aggregate, this 1% accounted for 25% of the total group health spend. To really get a sense of the disparity, the average annual cost for these patients was $113,379 compared to an average of only $2,751 for the other 99% of the study group. Within individual employers, the ratio of high spenders can vary significantly and probably varies from year-to-year. And it is very unlikely that the same covered person stays in the high-cost category from year-to-year, so you can’t focus on this year’s high-cost members thinking that you are controlling next year’s costs. Only 2% of the population was a high-cost patient in even one of the study’s four-year period and less than one-tenth of a percent were high-cost in all four years.
The three conditions which were most associated with high spending were cancer, particularly breast cancer; chronic kidney failure and complicated births. Few of these can be anticipated or predicted. Screenings for cancer may lead to earlier detection, but once detected, management of cancer cases can only save a limited amount of money. And it is likely a false assumption that early detection lowers overall costs, since it may mean that the cancer becomes more of a chronic condition. And screening can lead to treatment of a lot of cancers that don’t need treatment. Managing diabetes and hypertension better may lead to less kidney disease, but there is a substantial cost associated with care management programs. In general, these kind of analyses help us understand why there is such a limited return to care and disease management programs. It is just not possible to predict and ‘manage’ away many, if not most, high-cost cases. That doesn’t mean those programs don’t have a marginal economic return and they often do improve the quality of care, which is important in itself.