Concentration of Healthcare Spending

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August 9th, 2012
Categories: Healthcare Reform

healthcare spendingHealthcare spending in the United States is highly concentrated in small portions of the population with high usage.  A recent study by the National Institute for Health Care Management (NIHCM) identifies the percentage of the population with the highest spending, the demographics of the high healthcare spending percentage, the trend of change in spending and the implications these factors have on containing healthcare cost.

Key points of the NIHCM study:

  • Spending for healthcare services is highly concentrated among a small proportion of people with very high use.
  • People who are older or who have one or more chronic medical conditions or functional limitations are significantly more likely to be among the highest spending patients.
  • High spending persists over multiple years for many patients, while others return to more normal spending levels after an expensive episode.
  • Targeting the highest spenders represents the greatest opportunity to have a significant impact on overall spending, but implementation of strategies directed at high spenders is challenging for a number of reasons.
  • The concentration of health spending also has important implications for health policies related to acceptance of and compensation for differential risks.

Read NIHCM's complete study, The Concentration of Health Care Spending.

For more reports on health care cost, please read Rising to the Challenge: Local Health System Performance ScorecardHCCI’s 2010 Health Care Cost and Utilization Report and Health System Measurement Project.

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