Myths About Who Spends Health Care Dollars and Why

The following statistic from the Centers for Disease Control and Prevention (CDC) never fails to shock: the 133-million adults — or “nearly 1 in 2” — with chronic disease account for 75% of spending

The statistic is intended to demonstrate that a concentration of costs among people with out-of-control chronic disease but actually shows the opposite. It shows a diffusion of costs, not a concentration. 60% of adults accounting for 75% of spending — or even the incorrect 50% of adults accounting for 75% of spending — is about as far from a 20-80 rule as one can get. Basically costs are not concentrated in ongoing day-to-day chronic disease.

The bottom line: in a commercial population there is very little cost to be saved by focusing on trying to get more people to take more drugs to control their conditions.

Full post by Al Lewis at The Health Care Blog worth reading.

Comments (10)

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  1. Milton Recht says:

    When you look at CDC’s list of key chronic diseases
    Heart disease, Stroke, Cancer, Diabetes, Arthritis, and Obesity you can see many conditions overlap in their occurrences, such as obesity, diabetes and heart disease. Medical expenses, while expensive, are also limited to the time around treatment.

    It looks like CDC took an expansive view of chronic disease to include as many people as possible to hide the fact that a few (maybe smokers, heavy drinkers, illegal drug users, genetically predisposed, etc) contribute to most of the medical costs. The CDC data could show that 20 percent of the people account for 70 percent of medical costs in any year and the next 30 percent could bring it to 75 percent of costs. For example, smoking and heavy drinking are lifetime habits, yet the high medical costs are not until later in life when a disease becomes prevalent.

  2. Desai says:

    Interesting conclusion, I didn’t think of it this way.

  3. Patel says:

    I am not surprised that people with chronic disease contributes towards the most of health care cost. These are the people who need care and management on a daily basis, and so, the best way to cut costs is by finding cost effective ways to treat this population.

  4. Harley says:

    Death Panels!

  5. Sandeep says:

    I think the best way to control for costs is by having more people learn more natural behavior changes to manage their health conditions. This is the only was we are going make a big difference!

  6. Deepak says:

    Let study first where the most of the costs are coming from for people who are managing chronic health conditions, and from there, we can try to figure out some creative way to treat them all the while bring down the cost.

  7. Saket says:

    Also keep in mind that there might be cheaper alternatives to treating and managing chronic conditions, however, it seems that most people prefer the more expensive option because they think that they get what they pay for.

  8. Sadat says:

    We need to break away from the mind set that higher prices automatically means that the services are going to great!

  9. Dr. Mike says:

    Logic is difficult, I know. 75% of health care costs due to chronic conditions. 60% of Americans with chronic disease. So, OBVIOUSLY, 60% of Americans account for 75% of health care cost. Right? Oh wait, there’s a logical fallicy here – you see it now, don’t you?

  10. Gabriel Odom says:

    I read that people who see doctors more often are given a higher volume of care and hospitalized more. The explained reason was that more frequent access to medical care helps to diagnose more life-threatening maladies while they are yet in infant stages.

    Chronic care sufferers also have more frequent access to care. I wonder if the same logic applies: chronic patients have more frequent health visits, which means that dire conditions are detected sooner. This then reduces treatment costs overall.