– former CDC director Dr. Tom Frieden
President Trump has tasked Secretary Kennedy with ending the epidemic of chronic disease in the US. According to the Secretary, the President expects “measurable results in 2 years.” One source of measurable results is the outlays for medical expenditure. Between 2010 and 2019, our annual medical expenditures were estimated to rise from $1.7 trillion to $2.4 trillion.
Who is picking up the tab, where is all that money going, and for what? All questions that can guide science-informed policy decisions and all without good data, especially at a granular enough level that it has some meaning to our lives and not solely to the aggregate. A research study in JAMA breaks it down for 4 payers, 7 types of service, and 148 health conditions across 3110 US counties. Are these some of the metrics we should use to hold HHS accountable?
The findings came from 40 billion insurance claims and 836 million hospital admissions or visits. They captured roughly 75% of all spending by 97% of the population. [1] Each claim was categorized as one of
38 age and sex groupings
7 types of care – dental, pharmaceutical, Emergency Department (ED), Nursing facilities, Home Health, Inpatient and outpatient (ambulatory care)
4 payer categories- Medicare, Medicaid, private insurance, and out-of-pocket
148 medical conditions
All standardized to the 2019 US population
Results
Most spending was for those over 65, peaking in the first few years of Medicare coverage, 65-69, although the highest per capita spending was for those aged 85+. Nearly 12% were spent on children and adolescents (under 20 years old). While private insurance was the majority payor for the under 65, that role was taken on by Medicare at age 65. Out-of-pocket expenses for both groups were essentially the same at 11.5 to 12%, although the impact of those expenditures on older, fixed-income individuals would be more significant.
42% was spent on outpatient or ambulatory care, which is consistent with the move of care out of the more expensive hospital setting. [2] 23% went to inpatient care, and 2.3% to emergency department care. 13% went to pharmaceuticals, with 7.4% spent on nursing home care and 5% on home health care. Of note, the spending on inpatient care for infants rivals those aged 70 and older. Most of our health problems are seen in the early and later years.
When diseases were aggregated from 148 to 24 disease groupings, cardiovascular disease was the largest spend, at $265 billion, followed closely by cancer and musculoskeletal disorders – low back pain and the arthritides. For the MAHA amongst us, the one chronic disease that accounted for the most spending was type 2 diabetes, at $143 billion, primarily on adults over age 65, with roughly a third each spent on associated ambulatory care or prescribed medications. It is a category growing at about 2% annually. For context, autism spectrum disorders have the highest annualized growth during that period of 12%, followed by opioid, alcohol, and other substance use disorders (between 8.7 and 6.7%)
Finally, as expected, healthcare spending varied depending on where various populations lived. Idaho had the lowest per capita expenditure and Alaska the highest. And there were variations within those states. There was a threefold increase from Clark County, Idaho, with the lowest per capita spending, and my neighbor, Nassau County, and home, Suffolk County, took the #1 and 2 spots.
Who was paying and what they paid for accounted for much of the geospatial variability. This is consistent with “place-based” factors, the population’s health, the numbers and types of clinicians, and the presence of non-profit hospitals. Medicare payments are fairly standardized, whereas private insurance payments vary more, consistent with the general approach taken by private insurers to pay some varying percentage more than Medicare’s payments for the same care. (Medicare is the de facto payment standard, making for highly centralized control despite appearances). Variations in Medicaid spending, again, a varying and smaller percentage of Medicare payments, are more of a reflection of state-based coverage.
Secretary Kennedy and the MAHA crowd now have some actual data on how our medical dollars are spent.
Type 2 diabetes stands out, but so does back and neck pain at a combined $69 billion. We spend $54 billion on respiratory diseases, which, for the most part, are related to smoking – a war on a chronic disease we have waged for fifty years. We spend $93 billion on oral disease, not counting the $46 billion for well dental care. Will the push to end fluoridation move the needle? In what direction? How will the MAHA plans impact the $32 billion we already pay for “well-person” care? Will it simply shift the money around, or will he find a way to actually make America Health again? Now, we have some numbers to use in making that judgment.
Secretary Kennedy and the Make America Healthy Again (MAHA) enthusiasts have some actual numbers to chew on. Will they use this data to craft intelligent, targeted reforms, or will they charge ahead with a “move fast, break things, and apologize later” approach that risks shuffling costs without real improvement? Will MAHA deliver real results—or just a new coat of paint on the same overpriced healthcare system? Time and a fresh round of expenditure reports will tell.
[1] Spending on medical equipment, over-the-counter drugs and products, and medical transportation were not included.
[2] Health systems often try to make up for those lower payments by declaring the outpatient facilities part of their “campus” and being paid at the higher hospital-based care amount – this is the source of the policy debate over “site-neutral” payments.
Source: Tracking US Health Care Spending by Health Condition and County JAMA DOI: 1 0.1001/jama.2024.26790
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Publish date : 2025-02-23 11:00:00
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