August 30, 2015 – Curant COO, Marc O’Connor, in MedCity News – If it seems like every industry has some sort of 80-20 rule, that’s because it does. Entrepreneurs will tell you 80 percent of their profits come from 20 percent of their customers. Customer service reps will tell you they spend 80 percent of their time dealing with 20 percent of complaints. There’s even a fad diet based on eating wisely 80 percent of the time and cheating the other 20 percent. Simplified, the rule simply says that 80 percent of effects originate from 20 percent of causes. It’s called the Pareto principle, and it was first published by a management consultant over 100 years ago (yep, they had them even back then).
We have our own Pareto principle, an 80-20 rule for healthcare: 80 percent of healthcare costs are attributed to 20 percent of the populace: the chronically ill. According to a 2012 study by the Deloitte Center for Health Solutions, healthcare spend in the United States is expected to eclipse $4 trillion this year. With an estimated population of 319 million, that means $3.2 trillion is accounted for by 63.8 million people, or $50,157 per person. Put another way, the top 20 percent most expensive patients in the country each account for about the same amount on spent healthcare each year as the average American earns before taxes according to the U.S. Census Bureau.
Despite great advances in medication, access to healthcare, technology and education, the 80-20 rule has remained steadfast. Why haven’t these advancements impacted more favorable odds, and what can we do to stop the bleeding?
Here’s what we know is true.
Therapy adherence drives costs down. Breakthroughs in disease treatment and prevention medications have ushered in hope for diseases once thought incurable and largely untreatable. We can now keep viral loads undetectable in a significant majority of HIV patients and cure many instances of Hepatitis C with a single drug administered over several weeks. But the efficacy of these therapies is highly dependent upon outstanding medication adherence.
To read Marc’s full article, visit MedCity News.
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