Study: 1 Percent Of Americans Responsible For 22 Percent Of Health Spending

While half of the population spends little or nothing on health care, 5 percent of the sickest Americans account for almost half of total costs. Yesterday, a new study from Agency for Healthcare Research and Quality found that just 1 percent of Americans were responsible for a whopping 22 percent of health care costs in 2009 or about $90,000 per person:

While the report showed how a tiny segment of the population can drive health care spending, the findings included good news. In 1996, the top 1% of the population accounted for 28% of health care spending.

“The actual concentration has dropped,” Cohen said. “That’s a big change.”

About one in five health care consumers remained in the top 1% of spenders for at least two consecutive years, the report showed. They tended to be white, non-Hispanic women in poor health; the elderly; and users of publicly funded health care.

The news highlights the importance of encouraging providers to manage chronic conditions more efficiently — something the Affordable Care Act already invests in — but also suggests that health care reforms that try to give people more “skin in the game” by creating greater competition in the health care market can only have limited effect on spending. Those policies are targeted towards healthier applicants who have the luxury of choice in the individual health insurance market and don’t address the needs of the most expensive beneficiaries or the real source of costs in the health care system.