Occupy Grandma’s? Only 5% of Americans Incur 50% of U.S. Health Care Costs, Friedman Law

In recent months, many have protested the gap between the wealthiest one percent of Americans and the rest of us, but what about the health care gap? A new study sponsored by the United States Department of Health and Human Services reports that only one percent of patients account for over twenty percent of health care expenditures and five percent of Americans run up almost half our medical expenses. This top five percent group averages around $36,000 in doctor bills annually compared to an average of only about $230 per year for the bottom half of medical consumers. Study authors Stephen B. Cohen, PhD, and William Yu, said: “In both 2008 and 2009, five percent of the population accounted for nearly 50 percent of healthcare expenditures, with a mean expenditure of nearly $36,000.” This disparity in health care expenditures is thought provoking and may help focus the health care debate in the United States if we can resist the kind of hyperbole and hysteria that accompanied enactment of 2010′s Patient Protection and Affordable Care Act.

Of course, health care usage is heavily skewed by age, and it should surprise no one that older Americans incur far greater health care costs on average than do their children and grandchildren. While young people may prefer not to pay taxes to care for their elders, age warfare is not in anyone’s best interests. Even a newly minted college graduate will turn old someday and may need to access the social safety net of Medicare, Medicaid and other government health care programs.

Cohen, S. and Yu, W. The Concentration and Persistence in the Level of Health Expenditures over Time: Estimates for the U.S. Population, 2008–2009. Statistical Brief #354. January 2012 is available at the website of the Agency for Healthcare Research and Quality, Rockville, MD is available in its entirety at the following URL:

http://www.meps.ahrq.gov/mepsweb/data_files/publications/st354/stat354.pdf

Tags: healthcare innovation