Good article on health care costs in Washington Post

[Gone4Good]

For example, should a smoker who has failed/refused to quit for 10 years despite the strong recommendation of his treatment team be afforded the same cardiac or lung health care as a nonsmoler? Overweight diabetics? Nobody has the right to tell me to put down that jelly doughnut--but maybe they do if they are paying for my care.

I don't think we'll ever go the route of denying people health care simply because they've made bad decisions - at least I hope we don't. But that doesn't mean we can't have penalties and incentives built into a system. Plenty of insurance arrangements are already offering rewards for quitting smoking and joining healthly lifestyle programs.

 

[Gone4Good]

I'm sure a lot of hospitals wouldn't be crazy to see revenues drop by 50% a month.

Obviously the incentives to do this in the current system are all wrong. That is why the system needs to change and why so much attention is given to reworking payment and delivery schemes.

 

[Midpack]

Following up on the recent direction of this thread regarding health care spending concentration, I wondered if Camden NJ's astonishing numbers were representative ("in Camden, 80% of healthcare costs were spent on 13% of the patients, and 90% of the costs were spent on 20% of the patients"). Evidently the national stats are almost as skewed as Camden...(table summarizes chart)

Great source article for those interested http://www.changehealthcare.com/downloads/industry/2011.07 NIHCM-CostBrief.pdf

"The top 1% spends $90,000 per person on health care (vs $8,100 per person overall average)...381 times more than the bottom 50%. These are the kind of statistics that lead some wonks to write that medical spending can't be subjected to free market principles like other products, because demand for it is uniquely unexpected and inelastic."

% of population	% of health care spending
top 1%		22%
top 5%	50%
top 10%	65%
top 20%	81%
top 30%	90%
top 40%	94%
top 50%	97%
top 84.6%	100%

 

[Midpack]

And I am one of many here who have made this point, which ties in with health care tied to employment also.

Supporting another reason many Americans seem to (vigorously) defend the status quo, they don't realize how much they are paying. Note that out-of-pocket costs (what Americans think health care costs them) are now only 12% (11% in 2010) of what they actually pay through taxes (Medicare, Medicaid, other govt funds) and embedded in the cost of goods & services (private health insurance, other private funds) they purchase.

In 1960, out of pocket costs were 47%. Imagine what health care would cost today if out of pocket costs were still 47%? [Not advocating higher out of pocket, but competition at 47% out of pocket would be noticeably different than at 12%]

 

[Gone4Good]

"The top 1% spends $90,000 per person on health care (vs $8,100 per person overall average)...381 times more than the bottom 50%. These are the kind of statistics that lead some wonks to write that medical spending can't be subjected to free market principles like other products, because demand for it is uniquely unexpected and inelastic."

It's also why high deductible insurance policies and HSA type schemes can only scratch the surface of the problem. Any reasonable insurance deductible is easily chewed up by the patients who are mostly responsible for our health care expenditures. Even if everyone had an HSA insurance policy, the great bulk of our spending would still be paid for by a third-party despite any reasonable attempt to make it more consumer driven.

 

[ERD50]

Following up on the recent direction of this thread regarding health care spending concentration, I wondered if Camden NJ's astonishing numbers were representative ("in Camden, 80% of healthcare costs were spent on 13% of the patients, and 90% of the costs were spent on 20% of the patients"). Evidently the national stats are almost as skewed as Camden...(table summarizes chart)



% of population---- % of health care spending
top 20%------------ 81%....

I was a young man when I was first introduced to the Pareto Principle. I can't ever recall a scenario where it wasn't generally true:

Pareto principle - Wikipedia, the free encyclopedia

The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.[1][

-ERD50