10 healthcare idioms
1 min readFeb 13, 2021
- 50% of healthcare costs are driven by 5% of the population
- U.S. healthcare spending grew to $3.8 trillion in 2019, which equates to $11,582 per person, according to an analysis by CMS’ Office of the Actuary
- The government spends 1.2 trillion of that, inclusive of medicare, medicaid, and other programs
- Medicare represents 20% of federal spending, the most. Social security is a close second and defense is barely half
- Healthcare is growing by 4.5 percent yearly
- Healthcare is almost 18% of GDP
- 25% of US healthcare spend may be wasteful
- The most amount of money goes to hospitals, physician services, AND then drugs
- Physician supply is complicated as a wasteful cost source
- Behavior change is hard
A few personal perspectives about the above idioms
- While administrative costs are high, the expectation of personalization in the system is higher than anywhere else. Nobody wants to accept self service and bots. That will change as people age into digital first.
- Overall, Medicare spending is less wasteful than the sum of employer spending inefficiency ( tax credits / lack of choice / continuity of insurance / etc.)
- Employer based healthcare was an effective distribution channel in the 1940–1960s. It is now the least effective distribution channel.
- The macroeconomics of healthcare do not relate to the microeconomic decisions around healthcare. When faced with life or death, price is not a problem. Bankruptcy < death.
