Report: 5% of Patients Responsible for Half of Health Costs

Half of U.S. health spending goes toward the care of just 5 percent of patients, a government report says.

  • The Agency for Healthcare Research and Quality finds that U.S. healthcare costs are concentrated on a small slice of patients.  USA Today recently ran a story on these findings.
  • This fact indicates that Americans don’t necessarily overspend on their medical care.  In 2009, Americans devoted a total of $1.26 trillion to health care.
  • Heavy spending on a few may skew the picture of the many.  And even for the few, the cost concentration has lessened.

AHRQ’s study gives a clearer picture of how American healthcare dollars get allocated.

  • The 1 percent of Americans receiving the most medical care explains 22 percent of the nation’s healthcare costs.  The other 99 percent accounts for 78 percent of the healthcare pie.
  • The sickest 5 percent consumed half of the nation’s health costs in 2009.  Fully 95 percent split the other half of the overall U.S. health spending.
  • In dollar terms, each of the people with the most health expenses in the 1 percent averaged $90,000 per person in health costs.  Those in the top 5 percent of most expensive patients each accounted for $36,000 per person.
  • By comparison, in 1996, 28 percent of total health spending went to the top 1 percent.

This report also shows who demands the most in U.S. health spending.

  • AHRQ looks at those in the top 10 percent of healthcare consumers, based on expense, for two years running, 2008 and 2009.
  • In short, these patients are elderly women in public healthcare programs.  These high-cost patients rely on Medicaid and Medicare, putting ever-greater strain on these already-financially-challenged public health programs.
  • Though not a huge proportion of Medicare or Medicaid populations, those patients eligible for both programs absorb a significant share of the programs’ financial resources.

As ARHQ shows, most Americans needing healthcare don’t impose an inordinate amount of costs for their care.  Health leaders have called for better coordination of care, which becomes especially important as age, illness and government health program reliance converge.  Care coordination improves quality while controlling costs.