The National Health Expenditure Accounts (NHEA) is an arm of the Health and Human Services which calculates the costs of medical expenses and projects future health care spending based on past evidence. The NHEA has published their latest data set, which ended in fiscal year 2009. According to the NHEA, health care spending (a combination of private and public monies) broke down in the following manner:
U.S. spending for health care has been on a relentless upward path – reaching $2.5 trillion in the aggregate, $8,100 per person, and 17.6 percent of GDP in 2009.
5 percent of the population responsible for almost 50 percent of all spending. At the other end, half of the population accounts for just 3 percent of spending. That raises the question of who is considered part of that 5% of high spending, and who is in the bottom half of the population who accounts for 3% of spending?
"15.6 percent of the civilian, non-institutionalized population had no health care spending at all in 2008 and the half of the population with the lowest spending accounted for only 3.1 percent of all expenditures" (NHEA).
The NHEA does not specifically name who is in the bottom half of the population; the ones who are not a part of the higher cost of health care. One thing that we can say about the bottom half of the population is that they are probably young. We know that because that was one of the indicators of those who incurred the highest costs - age matters. If you are over the age of 55 years, then your chances of being a part of "the problem" increases dramatically.
"63.6 percent of all spending was incurred by the 10 percent of the population with the highest spending. The top 5 percent of the population accounted for almost half (47.5 percent) of all spending, and the top 1 percent of the population was responsible for 20.2 percent of spending" (NHEA).If you are over 55-years-old, then you are at higher risk for health care expenditures, an that makes sense. What else contributed to being in the top 5%? According to the NHEA, obesity and obesity-related conditions, such as "hypertension, diabetes and hyperlipidemia" are contributing to the 50% of all health care expenditures. That's not singling out people who are obese or people smoke, those are just the facts. How much difference is there between spending in the top 5% to those in the bottom 50%? It's pretty clear. According to the NHEA figures, spending for people at the bottom half of the expenditure scale averaged out to $733 per person. In contrast, spending per person in the top half of spending averaged
$7,300 per person. That's is a 10X difference in health expenditure. But there's more.
According to the NHEA data, the top 50% averaged out to $7,000 per person, ten times more than the bottom 50% of the population. How does that spending equate to the top 10%, 5% and 1% of the population in health care expenditures then?
Average spending on the top 10% (per person in 2008): $24,000 (4X higher than the top 50%)
Average spending on the top 5% (per person in 2008) $35,000 (5X higher than the top 50%)
Average spending on the top 1% (per person in 2008) $76,000 (10X higher than the top 50%)*108X more than the average person who is in the bottom half of the population in health care expenditures, per person on average.
What are we actually spending all of that money on? Higher spending for hospital care and physician and clinical services accounted for half of the increase in total national health spending between 2005 and 2009 and more than 80 percent of the increase in private insurance premiums over the period. In fact, hospital care was the costliest portion of the total amount of healthcare expenditure across the board. Hospital care, Physician and clinical services, Dental, Home health care and Prescription Drugs made up 84% of the total health care spending. Within that 84% block of major spending, the figures broke down in the following ways:
35% went toward hospital care. "rising hospital spending was the largest driver of the increase, with the $51.4 billion spending increase for this sector accounting for almost half of the total rise in premiums" (NHEA).
24% went toward Physician and Clinical services, which grew by $33 billion over a four year period. "the five most expensive health conditions are heart disease, cancer, trauma, mental disorders and pulmonary conditions" (NHEA).
8% went toward dental and other professional services. And the other categories of prescription medicine and home health care contributing approximately 12 - 16% of spending.What that means is that the costs of putting someone into a hospital is very expensive for all of us. While trauma and mental illness are not preventable, other conditions are possibly preventable or could be helped with a healthy dose of preventative medicine. And what about "public health education and public health administration programs?" The targets of the political right, as being wasteful expenditures of government spending? Combined, their total cost was less than 9% of total spending for health care expenditures.
The NHEA also reports that health care premiums have risen 15%, on average, between 2005 and 2009. "from $697 billion to $801 billion, in 2009...89 percent of the total premium bill was used to purchase health care services for enrolled beneficiaries, and the remaining 11 percent was used to cover the net cost of insurance"(NHEA). While I am not one to give a whole lot of credit to the health insurance companies for providing good options and service to their beneficiaries, a 89% rate of return on investment does seem pretty good.
The bottom line is this: The NHEA is reporting that health care expenditures have rocketed since 1997 and is on a trajectory to continue to rise at an unprecedented rate.The NHEA shows that the cost of health care was approximately $4.1 trillion or (13.7% of GDP) in 1997. In 2009, that number had nearly doubled to $8 trillion or (17.6% of GDP).What will that number be in another ten years? With waves of baby boomers retiring and collecting medicare benefits? A high rate of obesity in children and a swath of "working poor" Americans with no private health insurance through their employer and no means of qualifying for medicare?
I am not a health nut or a Medicare reformer. As an average American (and one with no private health insurance) I am worried about how I will be able to pay for those costly hospital stays and clinical services which is one of the most admired components of our country - our quality health care system. I don't mind paying my fair share, and I certainly don't mind that my taxes are paying for retirees who worked to earn their social benefits. I am just concerned that we cannot afford to continue to treat everyone, if 5% of the population isn't taking care of themselves and is "hogging" all of the benefits and incurring all of the costs.