Image via WikipediaWhile Medicare is busy guarding the front door, to ensure that no cognitive or primary preventive care is ever billed as useful time, top-down price setting has allowed our “nationalized” system for seniors to pay up to almost 2X the going rate for durable medical goods.
As related in the NYTimes, Congress has been setting the price for goods, and lobbying efforts have ensured that price is significantly higher than can be found elsewhere on the free market.
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Just had a strange, back of the envelope thought today on ROI for the current sick-care approach, which has never really made much sense to me.
So here it goes: Sick care spend alone is around 16% of overall expected spend and expected to reach 20% by 2010. The sickest 20% generate 80% of the total expenditure.
Therefore the sickest 20% (combination of end of life and chronic illness) have a cumulative bill of ~13% of the US economy. Their health spend is almost equivalent to their per capita economic production.
Calculating an ROI off that figure is a scary thought– which makes me question the social allocation of that much capital to the sick population…and not to the well population required to support it. Skimping on the non-ill 80% seems like a pretty poor investment decision to me…and the figure highlights the massive importance of finding ways to reduce the cost of care/expenditure on the very sick (the sickest 1% generate 35% of the cost).
Tough questions such as how/where do we cap spend and what makes end of life care so expensive will require significant rejiggering of our volume-based reimbursement scheme.
Image via WikipediaWhile Medicare is busy guarding the front door, to ensure that no cognitive or primary preventive care is ever billed as useful time, top-down price setting has allowed our “nationalized” system for seniors to pay up to almost 2X the going rate for durable medical goods.
