Half of all healthcare spending goes to 5% of the population: Why this is a good thing

A frequent critique that has been levied at the US healthcare system, half of all healthcare spending goes towards 5 percent of the population.  Stop for a moment and ask yourself, why is this a problem?  Sick people need more healthcare than well people, and many diseases are chronic.  Obviously, if you have been treated for diabetes, heart disease, cancer or neurological disease in the past, there is an increased risk that you will be treated for these disease in the future.  Many diseases increase in prevalence as we age so older people tend to consume a disproportionate share of healthcare resources.  The fact half of healthcare resources are targeted to a relatively small fraction of the population is actually a good thing.  It says that the majority of the population is healthy and does not need a lot of medical care.

If you really want to get upset about unequal distribution of resources, think about fire departments.  Virtually 100% of fire department spending is consumed on the 0.01% of buildings that are on fire.  If owner of buildings on fire had to make a high co-pay before sounding the alarm and fire departments needed prior authorization before responding, we could greatly reduce expenditure on fire departments.  Of course, that would mean fire departments weren’t serving their fundamental role which is the point.

One thought on “Half of all healthcare spending goes to 5% of the population: Why this is a good thing”

  1. ”It says that the majority of the population is healthy and does not need a lot of medical care.” It could also say that the majority of people can not afford the care they need. The United States spends more money on health care not any other country in the world. Why then do we not have the best healthcare system in the world?

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