ROI for sick care system– its a tough case to make

Just had a strange, back of the envelope thought today on ROI for the current sick-care approach, which has never really made much sense to me.

So here it goes: Sick care spend alone is around 16% of overall expected spend and expected to reach 20% by 2010. The sickest 20% generate 80% of the total expenditure.

Therefore the sickest 20% (combination of end of life and chronic illness) have a cumulative bill of ~13% of the US economy. Their health spend is almost equivalent to their per capita economic production.

Calculating an ROI off that figure is a scary thought– which makes me question the social allocation of that much capital to the sick population…and not to the well population required to support it. Skimping on the non-ill 80% seems like a pretty poor investment decision to me…and the figure highlights the massive importance of finding ways to reduce the cost of care/expenditure on the very sick (the sickest 1% generate 35% of the cost).

Tough questions such as how/where do we cap spend and what makes end of life care so expensive will require significant rejiggering of our volume-based reimbursement scheme.