US Healthcare Costs Approach $3T

March 28, 2011

deloitte-healthcare-total-mar-2011.JPGUS healthcare costs in 2009 totaled about $2.8 trillion, according to [pdf] a new study from Deloitte. Data from “The Hidden Costs of US Healthcare for Consumers” indicates this figure is $363 billion, or almost 15%, higher than the official National Health Expenditure Accounts (NHEA) figure of roughly $2.5 trillion.

More than Half of Extra Cost Due to Supervisory Care

Deloitte analysis indicates more than half (55%) of this extra cost results from supervisory care. No other individual source represented anywhere this percentage of the $363 billion in extra costs. An estimated 60% of this care went to people older than age 65.

Almost all supervisory care was provided to people in lower income brackets. Around 80% (imputed value of $161 billion) of supervisory care was provided to people with family incomes of less than $50,000.

US Per Capita Healthcare Costs Equal $9K

deloitte-healthcare-per-capita-mar-2011.JPGThis study estimated 2009 US per capita health care costs to be $9,217. Professional services (29%) and hospital care (27%) were the biggest categories. Directed administrative costs followed at 14%.

Seniors Represent Disproportionate Percentage of Costs

deloitte-healthcare-seniors-mar-2011.JPGNot surprisingly considering their generally greater need for healthcare services, seniors represented a disproportionately large percentage of total US healthcare costs in 2009. Although seniors comprised 13% of the population, they incurred 36%, or a little more than $1 trillion, of total healthcare expenditures.

Gen Y adults age 19-24 represented the smallest share of total US healthcare costs, just 4%, or about $100 billion.

Middle, Lower Class Represent Slightly Less than Proportional Cost Share

deloitte-healthcare-income-mar-2011.JPGWhile Americans with a household income of $100,000 or less (roughly comprising the middle and lower economic class brackets) represented 89% of the US population in 2009, they incurred 83% of total health expenditures. Seventeen percent of total healthcare costs were incurred by those with incomes more than $100,000, who made up 11% of the population.

It is also interesting to note Individuals living in families earning less than $10,000 per year accounted for 11% of all US healthcare expenditures in 2009.

Private Insurers Cover 29% of Discretionary Costs

deloitte-healthcare-discretionary-cost-mar-2011.JPGThe largest single share of 2009 discretionary US healthcare costs, 29%, was paid by private insurers. Public providers Medicare (18%) and Medicaid (14%) followed.

More than 1 in 5 US Adults Obese in Metro Areas

Likely contributing to high US healthcare costs is the fact that more than 20% of Americans were obese in 174 of the 188 U.S. metropolitan areas that the Gallup-Healthways Well-Being Index surveyed in 2010. In the most obese of these metro areas, Evansville, IN-KY, 37.8% of residents were obese, compared with 12.9% in the least obese place, Boulder, CO.

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