Half Of US Population Accounts For Only 2.9% Of Healthcare Spending; 1% Responsible For 21.4% Of Expenditures

Tyler Durden's picture

With the topic of peak class polarization once again permeating the airwaves and clogging up NSA servers, and terms like 1% this or that being thrown around for political punchlines and other talking points, one aspect where social inequality has gotten less prominence, yet where the spread between the "1%" and everyone else is perhaps most substantial is in realm of healthcare spending: perhaps the biggest threat to the long-term sustainability of the US debt picture and economy in general. The numbers are stunning.

According to the latest data compiled by the Agency for Healthcare Research and Quality, in 2010, just 1% of the population accounted for a whopping 21.4% of total health care expenditures with an annual mean expenditure of $87,570. Just below them, 5% of the population accounted for nearly 50% of all healthcare spending. Just as stunning is the "other" side: the lower 50 percent of the population ranked by their expenditures accounted for only 2.8% of the total for 2009 and 2010 respectively. Perhaps in addition to bashing the "1%" of wealth holders, a relatively straightforward and justified exercise in the current political climate, it is time for public attention to also turn to the chronic 1% (and 5%)-ers who are the primary issue when it comes to the debt-funding needed to preserve the US welfare state.

The spending distribution in chart format:

Broken down by age - While the elderly represented 13.3 percent of the overall population, they represented 47.9 percent of those individuals who remained in the top decile of spenders:

Broken down by sex - While women represented 50.9 percent of the overall population, they represented 61.6 percent of those individuals who remained in the top decile of spenders:

Broken down by race and ethnicity - Individuals identified as Hispanic and black non-Hispanic single race were disproportionately represented among the population that remained in the lower half of the distribution based on health care spending:

More of the report's findings:

  • In 2009, 1 percent of the population accounted for 21.8 percent of total health care expenditures and 20.5 percent of the population in the top 1 percent retained this ranking in 2009. The bottom half of the expenditure distribution accounted for 2.9 percent of spending in 2009; about three out of four individuals in the bottom 50 percent retained this ranking in 2010.
  • Those who were in the top decile of spenders in both 2009 and 2010 differed by age, race/ethnicity, sex, health status, and insurance coverage (for those under 65) from those who were in the lower half in both years.
  • Those in bottom half of health care spenders were more likely to report excellent health status, while those in the top decile of spenders were more likely to be in fair or poor health relative to the overall population.
  • While 15 percent of persons under age 65 were uninsured for all of 2010, the full year uninsured comprised 26.1 percent of those in the bottom half of spenders for both 2009 and 2010. Only 3.4 percent of those under age 65 who remained in the top decile of spenders in both years were uninsured for all of 2010.
  • Relative to the overall population, those who remained in the top decile of spenders were more likely to be in fair or poor health, elderly, female, non-Hispanic whites and those with public only coverage. Those who remained in the bottom half of spenders were more likely to be in excellent health, children and young adults, men, Hispanics, and the uninsured.

And the full report.

In 2009, 1 percent of the population accounted for 21.8 percent of total health care expenditures, and in 2010, the top 1 percent accounted for 21.4 percent of total expenditures with an annual mean expenditure of $87,570. The lower 50 percent of the population ranked by their expenditures accounted for only 2.9 percent and 2.8 percent of the total for 2009 and 2010 respectively. Of those individuals ranked at the top 1 percent of the health care expenditure distribution in 2009 (with a mean expenditure of $90,061), 20.5 percent maintained this ranking with respect to their 2010 health care expenditures.

In both 2009 and 2010, the top 5 percent of the population accounted for nearly 50 percent of health care expenditures. Among those individuals ranked in the top 5 percent of the health care expenditure distribution in 2009 (with a mean expenditure of $40,682), approximately 34 percent retained this ranking with respect to their 2010 health care expenditures. Similarly, the top 10 percent of the population accounted for 65.2 percent of overall health care expenditures in 2009 (with a mean expenditure of $26,767), and 39.7 percent of this subgroup retained this top decile ranking with respect to their 2010 health care expenditures. The data also indicate that a small percentage of the individuals in the top percentiles in 2009 and 2010 had expenditures for only one year because they died, were institutionalized, or were otherwise ineligible for the survey in the subsequent year.

In both 2009 and 2010, the top 30 percent of the population accounted for nearly 90 percent of health care expenditures. Among those individuals ranked in the top 30 percent of the health care expenditure distribution in 2009, 62.6 percent retained this ranking with respect to their 2010 health care expenditures (figure 1). Furthermore, individuals ranked in the top half of the health care expenditure distribution in 2009 accounted for 97 percent of all health care expenditures. Among this population subgroup, 74.9 percent maintained this ranking in 2010. Alternatively, individuals ranked in the bottom half of the health care expenditure distribution accounted for only 2.9 percent of medical expenditures (with a mean expenditure of $236 in 2009). Similar to the experience of the top half of the population based on their medical expenditure rankings, 73.9 percent of those in the lower half of the expenditure distribution retained this classification in 2010.

Given the high concentration of medical expenditures incurred by the top decile of the population ranked by health care spending (65.2 percent), identifying the characteristics of those individuals exhibiting significant reductions in health care spending in a subsequent year is also of interest. Among those ranked in the top decile in 2009 based on their high level of medical expenditures, 29 percent shifted to a ranking in the lower 75 percent of the expenditure distribution in 2010 (data not shown). Individuals ranked in the lower 75 percent of health care spending accounted for only 13.6 percent of all medical expenditures in 2010.

Individuals who were between the ages of 45 and 64 and the elderly (65 and older) were disproportionately represented among the population that remained in the top decile of spenders for both 2009 and 2010. While the elderly represented 13.3 percent of the overall population, they represented 47.9 percent of those individuals who remained in the top decile of spenders. For those individuals who remained in the lower half of the distribution based on health care expenditures over the two-year span, the elderly represented only 3.1 percent of the population. Alternatively, children (0-17) and young adults (18-29) were disproportionately represented among the population that remained in the bottom half of spenders (32.4 percent and 23.5 percent, respectively). In contrast, children and young adults represented only 2.1 percent and 2.9 percent, respectively, of those individuals who remained in the top decile of spenders. Individuals in the top decile ordered by medical expenditures in 2009 that shifted below the first quartile in 2010 were predominantly between the ages of 30 and 64.

Individuals identified as Hispanic and black non-Hispanic single race were disproportionately represented among the population that remained in the lower half of the distribution based on health care spending. While Hispanics represented 16.3 percent of the overall population in 2010, they represented 24.8 percent of those individuals who remained in the bottom 50 percent of spenders (figure 3). For those individuals who remained in the top decile of spenders, Hispanics represented only 6.0 percent of the population. Individuals in the top decile ordered by medical expenditures in 2009 that shifted below the first quartile in 2010 were more likely to be non-Hispanic whites and other races (74.9 percent) relative to their representation in the overall population (66.6 percent).

Individuals who remained in the top decile of spenders in 2009 and 2010 also differed significantly by sex, compared with those who remained in the lower half of the distribution ranked by medical care expenditures. While women represented 50.9 percent of the overall population, they represented 61.6 percent of those individuals who remained in the top decile of spenders (figure 4). For those individuals who remained in the lower half of the distribution based on health care expenditures over the two-year span, women represented only 43.3 percent of the population. Alternatively, men were disproportionately represented among the population that remained in the bottom half of spenders (56.7 percent). In contrast, men represented only 38.4 percent of those individuals who remained in the top decile of spenders. Individuals in the top decile ordered by medical expenditures in 2009 that shifted below the first quartile in 2010 were predominantly female (58.3 percent).

Health status was a particularly salient factor that distinguished those individuals who remained in the top decile of spenders. Overall, 2.8 percent of the population was reported to be in poor health in 2010, and another 7.8 percent was classified in fair health (figure 5). In contrast, of those individuals who remained in the top decile of spenders, 20.2 percent were in poor health and another 26.7 percent were in fair health. Furthermore, for those individuals remaining in the bottom half of spenders, only 0.5 percent were reported to be in poor health and 4.1 percent in fair health. Individuals in excellent health were disproportionately represented among those who remained in the lower half of spenders both years (41.2 percent). Alternatively, for those individuals remaining in the top decile of spenders, only 5.2 percent were reported to be in excellent health and 14.5 percent in very good health. Individuals in the top decile ordered by medical expenditures in 2009 that shifted below the top quartile in 2010 were predominantly in excellent, very good, or good health (25.8, 34.8, and 23.2 percent, respectively).

Focusing on the under age 65 population, health insurance coverage status also distinguished individuals who remained in the top decile of spenders from their counterparts in the lower half of the distribution. Individuals who were uninsured for all of calendar year 2010 were disproportionately represented among the population that remained in the lower half of the distribution based on health care spending. While 15 percent of the overall population under age 65 was uninsured for all of 2010, the full year uninsured comprised 26.1 percent of all individuals remaining in the bottom half of spenders (figure 6). Alternatively, only 3.4 percent of those under age 65 who remained in the top decile of spenders were uninsured. In addition, while 17.9 percent of the overall population under age 65 had public-only coverage for all of 2009, 32.6 percent of those who remained in the top decile of spenders had public-only coverage.

With respect to poverty status classifications, 36.2 percent of the overall population resided in families or single-person households with high incomes in 2010 (figure 7) and 15.2 percent had incomes at or below the poverty threshold. A lower representation of high income individuals (26.6 percent) and a higher representation of the poor (19.3 percent) were observed among those who remained in the lower half of spenders in both 2009 to 2010.

Source: The Concentration and Persistence in the Level of Health Expenditures over Time: Estimates for the U.S. Population, 2009-2010

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Beam Me Up Scotty's picture

Sure, another report from another .gov agency.  MOAR pencil whipped statistics.

prains's picture

yes the nSSA is broke and broken, structural default takes many forms;

 

morally

culturally

politically

economically

socially

 

there is NO dream that's American because it's always been a Ponzi scheme, now that the pools draining we all get to see the floaters that have existed for decades just below the surface.

I'd pull up stakes and move to Canada, similar culture, lots of space........but that's just me

GainByBrokenWindow's picture

I visited Canadian relatives this year. From what I see, Canada isn't much better (except possibly morally), other than the fact that as an English colony it's a little farther from the seat of it's government...

Bay of Pigs's picture

"Exercise a little moar, eat a little less".

Problem solved (and title for my new book on nutrition).

W74's picture

Which is why I was actually surprized by the race/ethnicity chart.

Mexico is now the fattest country in the world. 

AA's are overweight/obese as a default. Stats for Mississippi, Alabama and Louisians are the worst in the country (in just about everything) for a reason.

I guess age simply has a greater weighting.

Dr. Engali's picture

Damn..It doesn't matter how you slice it. I can't seem to become a one percenter, although it's wouldn't be as hard nor near as fun to be in this group.

NoDebt's picture

Doc- you and I are already in the 1%.  Do you have a good paying full time job?  You're in the 1%.

headless blogger's picture

I guess the next step in these "findings" is to have a national debate on who we can eliminate. It would fit right into American Morals.

NoDebt's picture

Already been done.  Everyone's cool with it.  Every lobbyist, politician and government bureaucrat.  You know, the only people that really count.

crakinshot's picture

There are many people that live healthy lifes, earn plenty of money but from no fault of their own require help for rare and costly health problems. That is what a universal health-care system should protect against. You should not be held ransom to a (treatable) ailement after you've looked after yourself.

However, that kind of system can be and is abused by people that don't look after themselves. Of those people you really have three options; a) you raise their contribution, b) you remove them from the system, c) you make them look after themselve.

Now, given the way the US penal system is going... I can see the latter being a posibility.

 

walküre's picture

You have another option. People that are unfit to look after themselves get locked up in a facility where they get looked after until they're able to fend for themselves. Lock the fat up in proper camps and put them on the starvation diet or they get cut off. Alternatively put them on a train to nowhere with a shovel. What's the point?

Broiler chickens gorge themselves to death and need to be slaughtered after 7 weeks.

Miffed Microbiologist's picture

I think everyone has a right to be 400 lb land whale. The only issue for me is I don't want to pay for their life style choice. If Healthcare was simply pay for service and fatty carts and other obese support systems werent subsidized this whole issue would go away. Some would die, others would get off their ass and heal themselves. Trouble is, there are too many people who profit from obesity and are actively lobbying for the profits to continue.

Miffed;-)

ceilidh_trail's picture

Miffed- You are in the lab, but I am in the unit. I agree that these land whales have the right to be what they are. But, they are killing us to the point that we have had to put in overhead crane systems that can lift and shift up to 800 pounders. And yes, I have seen 800+ pounders a few times. We actually have had to place two beds together- very difficult to work around since everything we use is powered and hard to synchronize...

walküre's picture

you're putting cattle into beds at your station?

800 lbs is unreal

they pulled the plugs on less burdensome creatures

Miffed Microbiologist's picture

Ceilidh_trail,

This was inconsiderate of me. I forgot about all you in nursing who are breaking your backs from these cattle.

A few years back I took a per diem job at another hospital in their micro lab. During orientation they insisted I learn to use the patient crane even though I was only going to be in the lab. It was rated to 1200 lbs ( this hospital specializes in bariatric surgery)! I damn near flipped. When it was my turn I good barely stop laughing hoisting this mannequin wearing a huge fat suit from a hospital bed to a chair.

The nursing staff really got ticked how much I was considering this a joke. Of course, from their prospective they were going to dealing with this daily unlike me. These people have hurt very fit male nurses in their prime. Even a strong man will get injured being crushed by a horse.

Miffed;-)

Trampy's picture

If you want to see where we're at and where we're headed, try search string "prison mental health crisis" and you'll see that jails and prisons are becoming our new mental health treatment system for the poor.

Way back when there was a movie about robbing a bank to get the money for a sex change.

It won't be long that people start passing bank-robber notes to tellers so they can go to prison and get the health care they need ... or want.

lolmao500's picture

You know what that means right... the young will get raped once again. After the student loan rape, it's now time for health care rape. Thanks Obamacare!

edifice's picture

In regard to student loans, young people (Millennials) did that to themselves.  It's fine if you take out loans (I did), but the key is, only taking out what you can actually pay back.

scraping_by's picture

Yes, back when you could walk out of college into a professional job. These days, you graduate and go back to bussing tables.

The student loans are a larger part of financial aid, they're higher interest, and the terms are far worse. It look my exwife twenty years to pay off hers (I dropped out a few times rather than go into debt) and this was public university tuition. These days, you can buy a middle sized car for a year at school.

Herd Redirection Committee's picture

Well, its funny what students will do when you show them charts (!!!) that indicate there will be plenty of well-paying jobs for them, 5 years down the line, what down to the economy booming and boomers retiring (this was the sell even back in 2006 or earlier).  Remember the paradigm was still FIRMLY in place that 'secondary education = good job', thus 'no secondary education = no good job'.

wagthetails's picture

Agreed, the young f'ed themselves with these loans...almost a natural selection of sorts.  If you ccould figure out that $200k for most educations isn't worth, perhaps this debt will keep them out of being approved for mortgages they can't afford as well.  but the boomers should have to work longer and received reduced gov't medical welfare.  The boomers did it to themselves for voting these punks in office the past 30 years...they had 30 years to fix the problem and didn't.  no retirement savings to speak of..but i'm sure lots of vacations, cars and larger than needed homes. 

I wonder if personal responsibility could ever be revived? 

jughead's picture

Seniors spend more on health care than younger folks...stop the presses. 

GainByBrokenWindow's picture

Women live longer and have to pay for birthing babies. Stop the presses! :)

scraping_by's picture

Okay, so Death by Powerpoint can mean real death.

Or, were you not pointing a finger at a small part of the population as 'the problem.' Hinting away at an entitled group living off the fat of the land. Claims they're using the system to steal more than their share. Or, more likely, the pus of Thatcherism making the poor the enemy.

You've got a whole lot of primed haters out there, ready to scream about welfare queens buying vodka with food stamps and such.

Most of your target populations are pretty weak, without much connection, so leaving them to die to cut taxes is pretty easy. Might take some repitiion, but it's easy.

scraping_by's picture

That said, the medical industry does absurd cost larding on simple procedures. It's the reason single payer systems are so much cheaper than the American commercial model, they don't have so much welfare for suits.

Divide and conquer, the strong responsible workers vs the few playing the system. Death by Powerpoint.

toady's picture

HATE the Drake!

HATE the 1%!

Kirk2NCC1701's picture

The Nazis killed the 1%.

They collected the mentally ill and the deformed (many with genetic cause or predisposition), and put them in institutions. Then, after some months, these 'patients' got sick and died... Of 'natural' causes or related complications. The families were first relieved to have them off their hands, as it was a heavy burden for most families, and after they got over the grief of their passing, almost w/o exception they were actually relieved that "God called them home".

What no one dared to say, was that it was the doctors who were "doing God's work". His 'dirty' work, that a "polite" society tries to avoid.

An ancillary benefit of all this, that polite people also avoid discussing, is that Germany had no "disabled" or deformed people for many years. These cases are now once again on the rise, "thanks" to the "humane" social policies that they've adopted (or been forced to adopt) from the Allies. The health and social costs are thus on the rise also.

darteaus's picture

And after they killed the first 1%, they moved onto the next 1%, etc.

The problem is we will all end up in that 1% at our end of life - cancer, stroke, heart attack, diabetes, dementia, etc.

Most of the 100% does not require extraordinary care during the year - and that is why they are in the 99%.

The 1% that require extraordinary care usually die within weeks, leaving behind an enormous tab.

Next year, a whole new 1% requires care, with most of them dying within weeks  Eventually, you and I will be part of that 1%.

mkkby's picture

All this is solved by death with dignity.  We need to educate ourselves not to fear death so much that we subject ourselves to torture and pain, just to last a few extra weeks. 

What's the point of living if it just means lying comatose in a hospital bed?

 

darteaus's picture

The sticky part of the problem is who decides who shall live:

If you give that power to the children - they stand around watching their inheritance draining faster than a taxi meter.  One of them will want to pull the plug ASAP so they can buy a 46" LED TV instead of a 42".

If you give that power to the spouse - well, just try to imagine Hillary's thoughts if BJ were on life-support.

If you give that power to the medical staff - they will keep someone alive until they need the bed or they can try an "experimental" therapy.

There just aren't too many Mother Theresas out there...

mr.Parsifal's picture

The future looks retarded.

For darwinian evolution to work, the sick and weak need to die.

DaddyO's picture

That's now a government decision, just saying...

DaddyO

viahj's picture

we all die, what we need is selective reproduction for evolution rather than the current devolution path that we are on.  remove all Uncle Sugar benefits for breeding.

scraping_by's picture

If you want to bring back the sick joke of Social Darwinism, note they got it exactly wrong. Where they saw exceptional individuals saving the world, it's really groups of people who have the survival advantage.

A group with solidarity will handle shocks to the system with more success than even the most uber ubermench. Voluntary cooperation builds social capital, including mutual care and support.

So a divide and conquer strategy like setting up a hated minority, which is really part of the majority, hmm...

azengrcat's picture

Babyz and diabeetus.  Shout out to my brother who is going for the cycle with gout, bad cholesterol, blood pressure, and type II diabetes at under 35 Y/O.  His wife sits AROUND the house and is loaded up w/ pills.  Covered and subsidized under ACA.  'Murica.

DaddyO's picture

Resupply points when the SHTF...?!?

You have to get there early though, the stench from decay may be overwhelming at some point.

DaddyO

knukles's picture

Not judging, but them symptoms sound curiously like way the fuck too much alcohol....
Been there done that, personal experience.

Kirk2NCC1701's picture

Even an affluent society can fight Darwinism/Nature only for so long.

Eventually, reverse-Darwinism sets in: The gene pool is weakened and health problems mount. Mother Nature is a real "Bitch" that way.

Extreme medicine needs to be eliminated, and the problem improves dramatically.

It's not just the 1%. Note the 80/20 Pareto: Eliminate the Top 20% of the cases, and half of your costs disappear.

Hongcha's picture

Sudden Debt, welcome to the United States and yes, that is our cuisine.

When I am home in Central Illinois in the wintertime, I make due with the best fresh kill around.  Beef cattle, bloody marys, baked potatoes.  I stay half-bagged and I don't stay long/.  Even the strip clubs have headed downhill.

The torpor and confused, silent anguish of this once-great nation is mind-boggling.

Lately I have been sparking up California's finest hash oil (transportable - no scent, looks like cologne in your kit bag) and tripping out in downtown zombified Peoria like I used to in 1977 ... it serves to remind me why I left ... cannabis is one of the good things going, folks.  Even a dyed-in-the-wool pessimist like myself will allow for that.

JayKitsap's picture

Isn't this the fact that a huge amount of healthcare is provided in the last 6 months of life, as a serious illness or accident takes over a person.

This low spending by half of the market, even 90% is the reason high deductible true major illness insurance makes sense.  

icanhasbailout's picture

That's right folks, for most of you 97.2% of your healthcare dollar, on average, is outright stolen from you.*

 

 

 

*that's above and beyond what was stolen from you in order to get post tax dollars to pay for this healthcare

lunaticfringe's picture

Relative to the overall population, those who remained in the top decile of spenders were more likely to be in fair or poor health, elderly, female, non-Hispanic whites and those with public only coverage. Those who remained in the bottom half of spenders were more likely to be in excellent health, children and young adults, men, Hispanics, and the uninsured.

 

No shit. So healthy people can live without insurance? And the unhealthy can't? More shocking revelations this Monday a.m.

akak's picture

They can have my hoveround when they pry it from my cold dead sausage-fingers ... any day now.

Miffed Microbiologist's picture

Why you impertinent sly deceiving little git! Climbing Alaskan mountains in a hoveround. I'd slap you silly if I could.

Miffed;-)

akak's picture

I am not fat!

I am gravitationally challenged!

Miffed Microbiologist's picture

You'd be vertically challenged if I catch you bespoiling the majesty of Alaskan countryside in a hoveround. We must put some limit where rolls of flab hanging over the seat humans perched on a groaning battery power chairs can go. Walmart and the various steamer tray, all you can eat establishments, seem reasonable to me. Therefore, I am sure to avoid them and keep my toes from being smashed.

Ok, now go sexually harass yourself at work before I taunt you some more.;-)

Miffed;-)

kurzdump's picture

The 1% here is not the 1% in terms of wealth distribution.

Shannon entropy. Not their fault.