A very small group of patients with major illnesses is responsible for an outsized share of health care spending, and new data show that prescription drugs are a big part of the reason their bills are so high.
The big picture: Among people who get their coverage from a large employer, just 1.3% of employees were responsible for almost 20% of overall health spending, averaging a whopping $88,000 per year.
Between the lines: “Persistently high spenders” are people who have accumulated big health care bills for at least 3 consecutive years.
- They often have HIV, MS, cystic fibrosis, rheumatoid arthritis, diabetes, cancer and other serious conditions requiring frequent and often costly care.
- Drugs are lifesavers for these patients, but also big offenders when it comes to costs.
By the numbers: Prescription drugs account for about 40% of this group’s costs, not counting rebates — compared with just 10% for the country as a whole.
- Their bills just for prescription drugs average out to about $34,000 per year. That’s much more than the average premium for family coverage.
Why it matters: These are exactly the people our insurance system is failing. They have insurance and a major illness, but still struggle with their medical bills as deductibles and other out-of-pocket costs keep rising faster than wages.
One solution might be to exempt this small group of high spenders with serious illnesses from drug or other copays, and limit their deductibles.
- Congress is also considering proposals to lower the cost of the most expensive drugs, which could make a dent in both employer and employee spending for this population.
The bottom line: I have had family members in the 1.3%.
- I know from experience as well as the data that we should take care not to sacrifice needed care as we try to reduce spending for this small group of very high spenders with complicated medical needs.
