Oh, My God -- So This is Why Health Care Spending is So High! (TPM Cafe)

[On the Road]

Silliness of "Market-Based" Health Care Reform
By Nathan Newman

The bright idea from the right wing is to give individuals incentives to save money on health care, thereby driving down costs and freeing up money for lower costs and/or greater coverage. Sounds like a nice idea and would make sense if average users of health care had much effect on health care costs. But they don't. See this table:

Share of HC       Cumu Share of 
  Spenders         Med Spendg
  Top 1%         30%
  Top 5%         58%
  Top 10%        72%
  Top 30%        90%

So 70% of the population use just 10% of health care resources-- and most marginal incentives such as copays will largely be wasted in trying to effect their behavior. And they are largely wasted on those maxing out health care use, since the copays are so minor compared to the larger health care costs they take on.

http://www.tpmcafe.com/blog/coffeehouse/2007/mar/11/silliness_of_market_based_health_care_reform

I'm kind stunned by this, because it implies that the top 1% spend over 200 times per person what the average is for the bottom 70%. But here's TPM's source (bottom), and the original study. It certainly does place the health care debate in a different light.