Here are some numbers from a 2011 Milliman report on high cost medical conditions in employer health benefit plans in 2010 that might provide a useful frame of reference next time a twenty-year-old claims that high health care costs can be cured by diet and exercise. Keep in mind that these are claims costs for insured patients. The costs might be lower if people were paying cash.
In a typical commercially insured population, only 0.2 percent of people incur annual medical claims over $100,000. Examples of high-cost “routine” events are cardiac revascularization at about $72,000 per year, stroke at $61,000 per year, and cancer patients not receiving chemotherapy or cancer surgery at $14,000 per year.
These events are rare enough that the average claims cost for the total population is slightly less than $4,000.
High cost or catastrophic conditions, the kind that employers purchase stop-loss coverage for, include stroke, cardiovascular surgery, hemophilia, HIV, transplants, end-stage renal disease, newborns with extreme problems, cancer, and people with respiratory failure on ventilators. Of those with catastrophic conditions, about 6 percent of people with these conditions have claims over $100,000. Most fall into the $20,000 to $50,000 range.
The following graph shows how the costs for cancer patients are distributed.
The final graph shows the cost distribution for three populations. The dark blue line shows results for the total commercial population, the green line shows the cost distribution for diabetics, and light blue shows the cost distribution for cancer patients. Note that the horizontal axis is a log scale.