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Healthcare dollar study: 5% of utilizers consume 50% of healthcare costs

Robin Wulffson MD's picture
healthcare costs, AHRQ, Agency for Healthcare Research and Quality , seniors

WASHINGTON, DC - According to a new study released on January 11 by the U.S. Agency for Healthcare Research and Quality (AHRQ), a mere 1% of Americans accounted for 22% of healthcare costs in 2009. Thus, each individual in that 1% group consumed about $90,000 healthcare dollars.

The report also noted that the top 5% of healthcare utilizers consumed 50% of healthcare costs: approximately $36,000 for each individual. Including the top 10% of healthcare utilizers, accounted for almost two-thirds of all healthcare costs. Overall, according to the report, Americans spent $1.26 trillion on healthcare in 2009.

According to the AHRQ report’s lead author, Steven Cohen, the findings can be used to predict which consumers are most likely to drive up healthcare costs and determine the best ways to save money. Although the report revealed that a small portion of the population drove up healthcare expenditures in 2009, it also contained a bit of good news: in 1996, the top 1% of the population accounted for 28% of healthcare expenditures. Mr. Cohen noted, "The actual concentration has dropped… That's a big change."

According to the report, approximately 20% of all healthcare utilizers remained in the top 1% for at least two consecutive years. The majority were: Caucasian, non-Hispanic women in poor health; seniors; and enrollees of publicly funded healthcare programs.

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The AHRQ analysis of the 10% of individuals with the highest healthcare expenses in both 2008 and 2009 found that:

  • Nearly 60% were women.
  • More than 40% were age 65 or older
  • Individuals aged 18 through 29 comprised only 3% of healthcare expenditures
  • More than 80% were Caucasian
  • Asians represented the smallest segment: just 2%.

The AHRQ derived its data from the Medical Expenditure Panel Survey (MEPS), a detailed source of information on the health services used by Americans, the frequency with which they are used, the cost of those services, and how they are paid.

AHRQ study author now plans to evaluate whether cost-cutting measures can make a significant difference. Beginning in October 2012, the government has informed hospitals that provided care to Medicare patients that it will no longer pay for patients who are readmitted to hospitals for the same condition soon after being released. Mr. Cohen noted that the AHRQ will evaluate whether that will change the spending averages for people in the top health care expenditure brackets.

Last November, Health and Human Services Secretary Kathleen Sebelius announced a one billion dollar health care challenge to be awarded to innovative projects that test creative ways to deliver high quality health care at lower costs.

U.S. Agency for Healthcare Research and Quality (AHRQ)