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High Cost Health Claims

By June 4, 2024Commentary

Another area worth tracking in health care is what kinds of conditions are responsible for the highest cost cases, and what are the trends in those conditions.  Several organizations put out reports on a variation of this theme.  One is Sun Life, which sells stop-loss insurance to self-funded employer health plans.  Stop-loss insurance is designed to protect employers against the impact of very large claims, either individually or in aggregate.  This year’s report has just been issued.  The data comes from claims for over 60,000 people from 2020 to 2023.   87% of employers to whom Sun Life provides stop-loss coverage had at least one stop-loss claim in this period.  The top ten reasons for a claim accounted for 72% of all claims and the top three for 37%.  (Sun Life Rpt.)

Those top ten reasons were solid cancer tumors, cardiovascular conditions, blood cancers, pre-term infant care, musculoskeletel, respiratory, sepsis, gastrointestinal, urological and renal.  But solid tumor cancers are far and away the dominant condition for total cost.  And premature infants have the highest average cost per case, at around $470,000.  The driving force for high cost growth for the cancers and for several of the other conditions is specialty drugs, which often cost tens or hundreds of thousands of dollars per course of treatment.   For premature infants, medical expenses are basically all of the cost, but for others, like hemophilia which has the second highest average case cost at $286,000, drugs are 85% of all spending.  For the cancers, drug cost is around 35% to 40% of all spending.

If you wonder where all those trillions of US health care spending go, these reports offer some good insight.

Join the discussion One Comment

  • Madeline says:

    Fascinating! As someone with an expensive disease (cystic fibrosis) I am always curious to see where health care spending goes. Specialty drugs have changed everything and I wonder how long the system will be able to continue paying for these expensive treatments?

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