No, that’s not a typo. I’m not referring to the 1% as was referenced by the Occupy Wall Street movement. I’m referring to the group of Americans who consume approximately 50% of our health care expenditures.
Yes that’s right, the health problems of 5% of Americans account for about 50% of health care costs. If that is shocking to you, this will definitely blow your mind. Health care spending is roughly 20% of GDP, which means that roughly one tenth of GDP is being spent on just 5% of Americans…
Holy high spending batman! Clearly if you want to have any attempt at controlling health care costs and spending, you have to figure out a way to help the 5%. The question is how?
The problem with the 5% is not that they’re extremely sick, even though they are. As Ezra Klein points out, our health-care system excels at taking care of the very sick – in the acute hospital setting. In fact, our health-care system is arguably the best in the world at dealing with the critically ill while in the hospital. No, the problem is that the 5% are also extremely hard to help. They’re extremely sick, poor, disabled, and often have mental health problems or dementia. Given their poverty, they often live in substandard housing conditions. They have limited mobility. They suffer from chronic pain from their myriad health conditions. They often suffer from bad habits and bad environments. They also have tremendous difficulty navigating the confusing, disorganized, and uncoordinated health care system – the very system that spends so much money on their disjointed care.
The truth is where we fail the 5% is after they leave the hospital and return to their “home” environments, where the cycle of chronic illness continues. Without fixing their “home” environments, the 5% keep getting sick (and one could argue sicker), and they keep racking up huge bills — not to mention facing enormous suffering.
No, if we want to control health care costs, the key may not be in health care spending at all. In fact, most other developed countries spend far more on social services than on health care – and achieve better population based health outcomes as a result. If we truly want to get serious about reducing the cost of health care, we may need to start in the homes of the 5% and begin doing the “difficult, unglamorous work of providing social services and ongoing support to people who are otherwise very sick and very alone.”