There is a new report out today that shows 21.8% of all health care spending was used by just 1% of the population in 2009. The total expenditure that year was 1.26 trillion (this number is for people not in places such as nursing homes or assisted living communities). That means that roughly 3 million people’s health care costs were nearly 275 billion dollars, for an average of 91,000 per person.
The good news (such as it is) is that this is a lower concentration than it was in the mid 1990’s where 29% of medical spending was spent on the 1% of the population.
The demographics of this group are about what you would expect, it tends to skew older, white and female, with 40% being over 65, 80% being white and 60% being women. Obviously this is going to be an area that those looking to cut programs like Medicare will be focusing.
From a purely money management point of view it makes prefect sense to focus on where you spend the most money. However there is more here than just the cost to consider.
Where do we put a cost on human life or quality of life? If there is no hope for a decent quality of life, I personally won’t be hanging around. It is a decision that I think people my age and younger are more comfortable with than those who are older.
But what about the gray area? Let me give you an example from my own life that muddies the water here. Mom had cervical cancer (just a quick aside, if you have a daughter, get her vaccinated for HPV, half of the women who get cervical cancer die of it and the vaccine drastically lowers the odds that a woman will have the HPV virus that accounts for a large number of cervical cancer cases). She had to have surgery, chemo-theropy and radiation to beat it, but beat it she did.
Unfortunately radiation has its own costs and she had complications that resulted in needing a colostomy, then an ileostomy (which is like a colostomy for your bladder). The surgery did not go well and the recovery went even worse. Long story short she was in and out of ICU for nearly 6 months and took nearly a year at home to recover to about 45% of where she was before the surgery.
All that cost around $600,000. Then there are the on-going medical costs. Every 4-6 weeks she needs to have her nephrostomy tubes replaced, at a cost of $6,000. Then there is the cost of her food for her liquid diet (she has been unable to eat solid food since the surgery) , at about $40 bucks a day.
She has been in and out of the hospital with infections several times at a cost of at least $40,000 a pop.
Pretty pricey no? Yet she has a very good quality of life. She lives in her home, she is able to travel to family weddings and to see her grandchildren.
Now if you had asked me back in the winter of 2009, I would have frankly told you that I did not think my mother would see another Christmas. She was so sick and all the breaks were going against her. Yet with a ton of expensive medical care we have had two more years with her and have no expectation that the end is anywhere near, even if we all know that she will die one day (we all die, like it or not, and pretending otherwise is not really helpful).
So, if we are looking at making cuts where do you make those cuts that does not cut off folks like my mother? The amount of money that has been spent on gaining her a few more years could cover a hell of a lot of health care for younger people with a much longer life expectancy.
Now, one of the areas that I think you can and should make cuts is something the Obama Administration has done. They have told hospitals that if they discharge patients on Medicaid who then are readmitted in short order for the same thing that they will not pay for the second stay.
This makes sense in that we know there is pressure on hospitals to free up beds and they do send people (all people) home sooner and sicker. Mom was one of those patients, she was told that she was well enough to go to a recovery center that she did not need a full blown hospital, only to have to be readmitted and put back in the ICU 10 days later (to say that I was less than pleased and pretty aggressive with the docs is probably a major understatement).
Do we need to be more hard hearted towards our sickest citizens to keep health care costs under control? I am skeptical. Yes, older folks are always going to cost more, even the ones, unlike Mom, who don’t have major surgery and negative outcomes. Still there is a huge amount of profit in the administration of health care that seems like the place to cut to me.
30% of the cost of private insurance is administrative. The ACA put in place a requirement that this shrink to 15% with 85% of the money taken in going to actually providing care, but even that is 500% the administrative cost of Medicare, Medicaid and VA health coverage.
We face a time in this country when we are realizing that things are out of balance and so far out of balance in favor of corporations that we have to do something about it. Part of the reason we are talking about cutting spending for Medicare is the raising cost of health care, but part of it is also that we have gotten ourselves into this ridiculous position of treating the ultra-wealthy as though they don’t have to pay the fair share for the extra-benefits of citizenship that they enjoy.
Is there a need to try to keep bending the cost of the 1% of patients that spend more than 20% of our health care dollars down? Sure, but it has to be balanced with the human cost. I know that I am probably biased on this, after all I have had the pleasure of my mothers company for years more than I would have if she had not had that care. Who in the world would willingly give that up?
Still when I look at the proposals for turning Medicaid into a voucher system I think about the reality that not only would Mom likely be gone, we as a family would likely be wiped out of our savings as we tried to do all we could for her.
I just don’t know how you balance this. What I do know is that if we stop talking about the human cost of cutting these programs we lose something as a people. The greatness of America is summed up in a single idea, “We are all in this together”.
That idea has taken a beating from the ultra-wealthy trying to convince us that it is every person for themselves, but if we want to be a great nation we should not allow that meme to die. Becoming hard hearted about health care is one of the ways that it would die.
The floor is yours.