Why Does Healthcare Cost So Much?

Friday, May 26th 2006
Healthcare Policy • Healthcare Costs

Previously I argued that perhaps we’re putting the chicken before the egg…or something like that, excuse the screwed up analogy. In anycase, perhaps healthcare in this country is ‘worse’ and yet costs more because we’re a comparatively unhealthy country. Indeed there’s some evidence for that.

Now, thanks to Kevin, M.D., I’ve had a little look at the breakdown of who, based on costs, consumes the most healthcare.

1% of all Americans consume, in terms of cost, more than a fifth of all healthcare. These are the sickest Americans, and you might imagine that very accute diseases or trauma might be contributing to massive one time costs. But, what is more remarkable is that of those roughly 2.5 million Americans of which 22% of healthcare expenditures are made for, more than 25% of them were in the top 1% of all healthcare consumers the previous year. These are chronic patients, consuming hugely disproportionate healthcare resources year after year.

Healthcare largely doesn’t cost more in this country because the system is poor or ineffective. It costs more because this country is unhealthy.