Transforming Health Care Through Evidence and Collaboration
Transforming Health Care Through Evidence and Collaboration
The NIHCM Foundation is a nonprofit, nonpartisan organization dedicated to improving the effectiveness, efficiency and quality of America's health care system.
  • Data Insights

    Mental illness has become more common over the last decade, particularly among 18- to 25-year-olds. This Data Insights looks at trends in mental health and their implications for the future.

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  • Briefing

    NIHCM Foundation led a briefing on Capitol Hill to discuss social determinants of health and the opioid crisis with Founding President and CEO Nancy Chockley, former CMS Administrator Don Berwick, Curtis Barnett of Arkansas Blue Cross Blue Shield, Craig Samitt of Blue Cross and Blue Shield of Minnesota, and Grant Baldwin from the CDC.

    Press Release Watch the Video
  • Data Insights

    As urbanization increases, an older, sicker and poorer population remains in rural America. Despite the health care challenges posed by these changes, promising initiatives can improve rural health.

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  • Advisory Board

    NIHCM Foundation is pleased to welcome Dr. Scott Gottlieb, Sherry Glied, PhD, and Katherine Baicker, PhD, to its distinguished Advisory Board. Their ideas and insights will advance NIHCM's mission to improve health care for millions of Americans.

    Press Release Advisory Board
  • Awards

    NIHCM Foundation hosted the 25th Annual NIHCM Awards at the Organization of American States in Washington, D.C. to recognize outstanding health care research and journalism.

    Press Release Winners Finalists
  • News

    NIHCM welcomed Secretary Azar to a meeting in March to discuss efforts by the Department of Health and Human Services to transform health care by lowering costs and improving value for patients.

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Events

November 18, 2019
alliance-image-111819

Part of the Beyond the Beltway: Health Policy Webinars for Journalists series, this webinar will explore the current landscape of the long-term care delivery system.

November 13, 2019
Rural-Health-Webinar-Graphic

This webinar explored how leaders are leveraging the unique strengths of rural communities to develop and implement promising solutions.

In the News

November 2019
Population Health Spotlight
aces-in-the-news 4

The Concentration of Health Care Spending

 

Updated charts using the latest data are available here.

Key Points From This Brief:

  • Spending for health care services is highly concentrated among a small proportion of people with very high use. Conversely, a significant portion of the population has very low health care spending.

  • People who are older or who have one or more chronic medical conditions or functional limitations are significantly more likely to be among the highest spending patients.

  • High spending persists over multiple years for many patients, while others return to more normal spending levels after an expensive episode. There is also evidence that high spending occurs near the end of life for many patients, particularly within the Medicare population.

  • Targeting the highest spenders represents the greatest opportunity to have a significant impact on overall spending, but implementation of strategies directed at high spenders is challenging for a number of reasons.

  • The concentration of health spending also has important implications for health policies related to acceptance of and compensation for differential risks.

Spending for health care services in the United States is highly concentrated among a small proportion of people with very high use. For the overallcivilian population living in the community, the latest data indicate that more than 20 percent of all personal health care spending in 2009 — or $275 billion — was on behalf of just 1 percent of the population (Figure 1). The 5 percent of the population with the highest spending was responsible for nearly half of all spending. At the other end of the spectrum, 15 percent of the population recorded no spending whatsoever in the year, and the half of the population with the lowest spending accounted for just 3 percent of total spending.i

Medicare claims data can be used to make similar calculations for the Medicare population specifically. Those analyses show that spending is somewhat less concentrated for this population since individuals across the board are more likely to use health care services. Even there, however, recent data indicate that the top 1 percent of spenders account for 14 percent of program spending and the top 5 percent are responsible for 38 percent of spending.1

With numbers like these, it is clear that per-person spending among the highest users is substantial and represents a natural starting point when thinking about how to curb health care spending. For instance, the average expenditure for each of the approximately 3 million people comprising the top 1 percent of spenders was more than $90,000 in2009 (Figure 2). The top 5 percent of spenders were responsible for $623 billion in expenditures or nearly $41,000 per patient. In contrast, mean annual spending for the bottom half of distribution was just $236 per person, totaling only $36 billion for the entire group of more than 150 million people.

While the highly skewed distribution of spending has been observed for many years, spending has actually become slightly less concentrated over time as high spending has spread to a broader swath of the population. For example, whereas 56 percent of spending was concentrated among the top 5 percent in 1987,2 this group accounted for just under half of spending in 2009. Similarly, the spending share for the top 1 percent fell from 28 percent in 1987 to about 22 percent in 2009. One explanation offered for this flattening of the distribution is the rise in population risk factors — most notably, obesity — and the corresponding increase in treated prevalence for chronic diseases linked to these risk factors, such as hypertension, diabetes and hyperlipidemia.3 That is, as more people are diagnosed with and treated for these common chronic conditions, a larger share of the population will incur relatively high medical spending.

i These figures, derived from the Medical Expenditure Panel Survey (MEPS), exclude care provided to residents of institutions, such as long-term care facilities and penitentiaries, as well as care for military and other non-civilian members of the population. Likewise, they reflect spending only for personal health care services, not the much broader spending reflected in the National Health Expenditure Accounts (NHEA), which include government public health spending, administrative costs, research, capital investments and many other public and private programs such as school health and worksite wellness. As such, the total spending estimate from the MEPS ($1.259 trillion in 2009) is significantly lower than the total spending reflected in the NHEA ($2.496 trillion in 2009).

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Events

November 18, 2019
alliance-image-111819

Part of the Beyond the Beltway: Health Policy Webinars for Journalists series, this webinar will explore the current landscape of the long-term care delivery system.

November 13, 2019
Rural-Health-Webinar-Graphic

This webinar explored how leaders are leveraging the unique strengths of rural communities to develop and implement promising solutions.

In the News

November 2019
Population Health Spotlight
aces-in-the-news 4

Grants

Journalism GrantsJournalism Grant Program

We are no longer accepting letters of inquiry for the 2019-2020 round of grantmaking. NIHCM will notify grant winners in November 2019.

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Investigator-Initiated Research Grant Program

We are no longer accepting letters of inquiry for the 2019-2020 round of grantmaking. A small number of applicants will be invited to submit a full proposal in September.

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Awards

Winners Named in the 25th Annual Research and Journalism Awards

Winners Announcment 2018 1

Congratulations to all of the winners of the 25th Annual NIHCM Foundation Research and Journalism Awards! The winners and finalists were honored at a banquet in Washington, DC, in May.

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