Healthcare Costs: Another Top 1% Issue

September 11 01:00 2013 by ushadmin

In the U.S., the top 1% of patients ranked by their healthcare expenses accounted for 21% of total healthcare expenditures in 2010, with an annual mean expenditure of $87,570, according to 2010 Medical Expenditure Panel Survey from the Agency for Healthcare Research and Quality in Rockville, Md.

In addition, the top 5% of the U.S. population ranked by healthcare expenses accounted for half of the total of healthcare expenditures, with an annual mean expenditure of $40,876, wrote Steven B. Cohen, PhD, and Namrata Uberoi, MPH, in the Statistical Brief No. 421.

Both of these figures are down from 1996, when the top 1% accounted for 28% of the total healthcare expenditures and the top 5% accounted for slightly more than half.

The total healthcare expenditures for 2010 were $1.26 trillion.

It is important that policy makers are aware of the the “concentration of healthcare expenditures … to help discern the factors most likely to drive healthcare spending and the characteristics of the individuals who incur them,” the authors noted.

Overall, there was a huge divide between the top and bottom 50% of the population in terms of total healthcare expenses.

The top 50% accounted for 97% of total healthcare costs, while the lower 50% accounted for only 3% of the total healthcare expenditures.

In terms of income status, the top 5% of those designated as poor accounted for 57% of the total healthcare expenditures, with an annual mean expenditure of $46,600, while the top 5% of those in the highest income group accounted for 45% of the total healthcare expenditures, with an annual mean expenditure of $40,800.

The report also broke down healthcare spending by the number of chronic conditions, age, race/ethnicity, sex, and insurance.

The survey found that chronic diseases take a big chunk of healthcare dollars. The top 5% of those with four or more chronic conditions accounted for 30% of all healthcare expenditures, with an annual mean of $82,000 — a figure that is seven times higher than those in the top 5% with no chronic diseases and nearly three times higher than the top 5% with one chronic condition.

A report from 2012 found that Medicare could cut up to 10% of its spending if it focused on chronic disease prevention and coordinated care for those with chronic conditions.

Regarding age, there were more children under 18 in the top 5% of total healthcare expenditures than those over 65 (54% versus 34%). But the older group spent significantly more healthcare dollars ($67,000 versus $17,000 annual mean expenditures).

Regarding race, whites and blacks had similar annual mean expenditures. The top 5% of whites ranked by healthcare expenses accounted for 46% of the total healthcare expenditures, with an annual mean expenditure of $43,000.

For blacks, 58% comprised the top 5%, with a mean annual expenditure of $47,000.

The mean annual expenditure for Asians in the top 5% was $26,800 and for Hispanics, it was $27,300.

There were more men than women who accounted for healthcare expenditures in the top 5% (56% versus 45%), but the mean annual expenditure was not different ($40,000 each).

The top 5% of the uninsured population under age 65 accounted for 67% of the healthcare expenditures, with an annual mean of $17,453.

Conditioned on insurance coverage status, the uninsured had the most concentrated levels of healthcare expenditures and the lowest annual mean expenses.

Regarding public insurance, the top 5% accounted for 56% of the total healthcare expenditures, with an annual mean expense of $43,400, while the top 5% with private insurance accounted for 48% of the total, with a mean annual expense of $33,600.