What Statistics Tell Us About the Need for Healthcare Reform

Apr 17, 2018

Dan Tasset is the Vice Chairman of NueHealth Holdings, the CEO of NueHealth Performance, and the Chairman of Nueterra Capital. His blog posts offer his experienced and innovative views on healthcare, healthcare reform, and related topics.

Healthcare spend in the United States now exceeds $3.2 trillion. That equates to a per capita spend of almost $10,000. The healthcare industry is now 18% of our national GDP. Hospitals account for the largest portion of the $3.2T at almost 35%. Physicians are the second largest at just under 30%. 90% of the $3.2T is paid by health insurance and other third-party payers including Medicare and Medicaid.

These statistics will be important when discussing healthcare policy so that focus can be given to those that will be impactful. For example, since hospitals and physicians account for almost two-thirds of all healthcare expenditures, policy considerations regarding hospitals and physicians on how to create market conditions to improve the value delivered to the consumer should have higher priority.

Other consideration should be given to other statistical analysis of healthcare spend. For example, less than 6% of total medical spend going to hospitals and physicians is spent on emergency room care, as opposed to the 60% of which is spent on surgical, diagnostic and other episodic care. This accounts for nearly one-third of the total healthcare spend in the United State, or almost $1T. Subsequently, policy change priority should be given to these areas as opposed to emergency room or other areas to achieve greater impact. There is much more statistical data that needs to be considered but is beyond the scope of this writing.