Share of total health spending, by percentile
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The study looks at one year, and finds in that one year 24% of spending was on 1% of the people receiving care. That's not very surprising. 30 years ago I was in a bad car accident. I'm sure the cost of the ambulance, the emergency surgery, and the after-care was WAY more than most people average that year, and easily the most expensive medical year of my life. But it was just that one time.
To be somewhat fair to the original poster, they do offer a graph further down talking about total lifetime healthcare spending by percentile, which is also somewhat imbalanced and would account for spikes in healthcare spending by individuals due to accidents or temporary sickness. But despite being a better dataset to cite to make their point, they clearly didn't lead with the lifetime spending graph because it's significantly less imbalanced than just picking a specific year and so makes their argument weaker (if also more accurate).
https://www.kff.org/health-policy-101-health-care-costs-and-...
https://www.healthsystemtracker.org/chart-collection/health-...
Don't assume high spending necessarily means poor overall health. Two people in my household are on modern fancy drugs for autoimmune conditions (upadacitinib and etanercept). They work spectacularly well and cost our insurance company thousands of dollars a month. And the family members taking them are doing great!
Would it be cheaper to fly somewhere?
I don't think it's sustainable on the national scale much longer; the insurance premium costs me twice my mortgage each month.
The Insurance company is billed some ungodly amount, and my copay is small or $0.
There has to be some financial shenanigans going on: someone is marking up the price, and writing it off to some reasonable level for some benefit. It's not sustainable to the insurer or the insured to be paying these kinds of prices for what amounts to a 'forever' medication.
The stress of maintaining the discount programs, induces quite a bit of anxiety.
There is absolutely some shenanigans going on, but most of that goes on with the Pharmacy benefits manager.
All these parties (ultimately 2?) are doing something to their balance sheets.
One of the biggest challenges to reform here is the costs are all hidden away from most people. People think their health insurance costs $100/month because their employer chips in the other $1900/month towards the premium.
People choose different plans, but my understanding is that they dont differ much at all in healthcare access. Instead, they differ in the average percentage of healthcare expenses that will be paid by the plan.
In the US you might have the copay $5, but you also pay for your insurance plan, which might be like $30k/year for a good family plan.
[0] https://www.wsj.com/health/pharma/america-is-running-out-of-...
I'm not sure this amount can be negligible even if we were able to make the system economically efficient such that no entities have outsized profit margins.
Some things about modern medicine are just expensive. Discovering a new drug and bringing it to market takes a long time and probably has to if we want drugs that work and don't do more harm than good. Growing monoclonal antibodies, which are wonderdrugs for certain conditions, is a resource-intensive process. Even more mundane stuff is expensive. Surgery requires a team of highly skilled professionals. An MRI machine is expensive to own and operate.
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Essentially the same arguments apply to semiconductors as medicine yet I can buy an iPhone for <$2k and still give Apple an extremely generous margin on it. That wonderdrug might cost thousands more despite having a fraction of the people involved in its design/manufacturing, most being paid far less. Scale is part of it, but things like insulin or epinephrine are being produced by the ton with simple processes and still cost hundreds of dollars a year for people. It's not certification either, as other countries don't have the same issues or pay the same high prices.
Benralizumab and tebentafusp are probably very expensive to make and took a lot of work to develop and test. Not very many people need them, but the people who do are likely to die horribly without them.
Start with destroying pharma benefit managers and Medicare Advantage, and continue hacking and slashing based on cost/time/benefit ratio.
https://www.wsj.com/health/healthcare/medicare-health-insura... | https://archive.is/de2f3 (“Insurers Pocketed $50 Billion From Medicare for Diseases No Doctor Treated”)
https://www.thebignewsletter.com/p/inside-the-mafia-of-pharm... (“Inside the Mafia of Pharma Pricing”)
“Your margin is our opportunity.”
Countries with successful healthcare institutions use purchasing controls to negotiate.
They dont rely on the charity or good nature of suppliers.
Instead, they say "thats too expensive, lower the price or we will take the option 90% as good for 10% the cost".
We don't blame them, but without any control we have the highest prices and not so good overall results. Add to that Trump with his industry 'self regulation' idea and you know what's coming...
In America we have some pretty bed economics around health, i could easily see this number inflated by the exorbitant cost of insulin, or HIV meds, or cancer meds. life saving medications whose costs are quite controversial.
also, end of life care for the elderly. this is a statistic that needs some serious context and fact checking IMO
The medical industry seems to operate a lot like gambling where outsize profits are available from a small percentage of "whales". These whales have the combination of some condition, the treatment of which can be made very expensive, combined with access to the financial resources to pay for the treatment.
This entirely ignores the cost of R&D, clinical trials, and most importantly, all the other drugs that didn't make it to market.
On the flip side, once they start making a profit, they have to pay a similarly high fraction in taxes.
This is to incentivize searching while also letting the profits benefit the majority.
Had a shower thought if such a model might have worked on the pharmaceutical market as well.
[1]: https://www.nrk.no/klima/xl/leterefusjonen_-disse-selskapene...
https://skeptics.stackexchange.com/questions/16472/do-typica...
https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
My bet is the latter
The healthcare sector's 5 year profit margins is 10.0%. That puts it in the middle of the pack when it comes to the other sectors.
https://insight.factset.com/hs-fs/hubfs/1)Insight/2024/04.20...
Some people just need a whole lot more aids and meds than most people. Take wheelchairs for example, they are as complex as single speed bicycles but easily cost 10k because reasons.
The "reasons" are mostly unit economics, with a bit of regulatory capture thrown into the mix.
There are two kinds of costs that go into a product, the costs you have to pay upfront, like factory construction, and the costs you pay per unit, like materials and shipping. Even if those are the same for wheelchairs and bicycles, you make far fewer wheelchairs than you make bicycles, so you have far fewer units to spread the upfront costs over. The per-unit costs are never actually the same, as ordering parts in larger volumes is usually cheaper.
Then there's the "regulatory capture" part, you need far fewer permits and far less government paperwork to open up a bicycle company than to open up a wheelchair company, especially if you want to work with insurers and/or national healthcare systems. This means that a bicycle company racking up margins would be quickly outcompeted by others, while overbroad government regulations favor those shenanigans in the healthcare industry.
Or is it just like 1% of people have cancer?
Would love to see a good-faith analysis by somebody who has 50 hours to commit to it, a good grasp of statistics, and no interest in politics.
I'd like a unicorn too!
Medicare takes care of the very very expensive end of life care.
but like, we all chip in, Some of us get very sick or hurt and there's no way to know up front who it might be. So, we all pay a little and that 1% is taken care of. Because that 1% might be me.
This is how it works. We could save money by sacrificing that 1%, but that's a pretty nauseating idea.
<1% of people commit 99% of all murders. <1% of people cause 99% of fatal trafic accidents. <1% of people are responsable for 99% of tax fraud. <1% of people ride those stupid three-wheel bikes. If only we found and isolated 1% of people, all our problems would go away!
I’m curious what you have against tricycles or tricyclists.
(I was a tricyclist for just shy of ten years, but just gave it up this month as part of moving to India to marry, loving a particular woman considerably more than my Greenspeed GT3. And I’m rather surprised to encounter tricycles grouped along with murders, fatal traffic accidents and tax fraud, because in cumulatively several months of solo cycle touring in AU, US, CA and NZ, I think I encountered a negative reaction expressed about six times, whereas positive or curious reactions happen multiple times per day.)
https://www.wolframalpha.com/input?i2d=true&i=Limit%5BPower%...
I don't have a link, but I remember a study that looked at this specific issue for the few outliers in health care that were a causing the use of the most resources. It turns out that identifying them and giving them a more holistic care approach dramatically reduced costs and improved outcomes for those people. Part of the problem was the segmented approach to healthcare.
Especially considering the pharmaceutical companies pay the generic manufacturers to stay out of the market. https://www.theatlantic.com/ideas/archive/2023/06/pharmaceut...
If it's per-year then the graphs are useless. You can be in the 1% one year, and in the bottom 50% the next.
At some point he and his administrative staff saw a similar trend, and also figured out that their top 10 most expensive patients were all people who had chronic health conditions and no health insurance or medicaid. Not having health insurance meant they couldn't effectively manage their conditions, which meant they were repeatedly getting to a crisis point and having a family member call an ambulance. Which is just incredibly expensive - all emergency services are - and of course if they couldn't pay out of pocket for a family physician then they couldn't pay for emergency services, either.
The solution was to start just paying out of the ED's own budget for these folks to see regular care providers, buying them their medications, arranging cab rides, etc. It saved the hospital millions per year.
Makes sense to me. Is that supposed to be surprising?
https://www.healthsystemtracker.org/chart-collection/health-...
Then of course, some people get cancer and some do not. With a normal age distribution of 18 year olds and up, it isn't surprising to me that very little is spent on the 18 to 30 year old men, and that one of the 65 and over got cancer and a lot of spending went toward that.
“Modern medical highway robbery sucks 24% of our medical expenses from just 1% of the people”
So I say we just save them all, and let god sort ‘em out.
Even in the US, insurance still decides what is covered and what's not. There's always someone deciding in any system unless it's cash.
If you offered someone end of life healthcare or 500k for the grandchildren, they would probably choose the 2nd. If you offer them them healthcare or $1 for 500,000 random children they dont know, the will take the healthcare.