Talk about proving the 80/20 rule. About 1% of the population in the United States is responsible for 22% of all healthcare spending in the country, according to a newly released data report. About 5% of the population accounts for 50% of all healthcare spending. On average, the top 1% had healthcare bills of more than $116,000 in 2017, the year for which the most recent data is available. This includes all sources of healthcare payments, including private insurance payments, Medicare, Medicaid, and out-of-pocket spending.
About 50% of the population spent less than $1,051 in 2017, accounting for less than 3% of overall healthcare spending. The average expenditure for this segment of the population was $305.
Individuals that accounted for the bottom 50% of healthcare spending did have the highest percentage of individuals who paid for their healthcare expenses out of their own pockets. Nearly 27% of those in the bottom half paid out of their own pockets for their healthcare expenses, compared with 12% for the top half of healthcare spenders. Overall, 12.4% of healthcare expenses were paid out-of-pocket.
Inpatient hospital stays represented the largest category of where healthcare costs are being spent, according to the report, followed by ambulatory events, and then prescribed medicines. Ambulatory events include office visits to physicians, hospital outpatient visits, and emergency room visits.
Healthcare providers have long known that a small group of patients are what drive spending at their organizations. The question has long been how to deal with this dynamic, especially as more individuals are either choosing to or being forced to switch to healthcare plans with higher deductibles and co-pays.