May 03, 2017
Yes, the NYT once again printed a really big number without any context to make it meaningful for readers. It told us in a headline of an article on efforts to craft a compromise between conservative and moderate members on a new health care bill, that the latest proposal adds $8 billion to cover the cost of providing care to less healthy people.
Is $8 billion a lot of money?
Well, one thing not answered in the article is the time period over which this $8 billion would be spent. Is this a one year number? Is it a ten year total? The article doesn’t give an answer to this basic question.
To get some idea of the need, the average cost of treating the 10 percent least healthy people is more than $50,000 a year per person. This means that on an annual basis the cost of treating the 30 million least healthy people in the country would be over $1.5 trillion. Many of these people are getting Medicare, Medicaid, or employer provided insurance, but if one-third of them showed up in the high risk pools, then their costs would be over $500 billion a year.
In this case, if the $8 billion is a one-year figure, it will cover 1.6 percent of the cost of treating this population. On the other hand, if it is a ten-year figure it will cover 0.16 percent of the cost of treating the less healthy people who show up in high risk pools. Either way, it is a tiny fraction of the cost, but it would still be nice to know which one it us.
Comments