Healthcare's big numbers difficult to put in perspective

Jan 01, 2010

The industry spends trillions each year, and another $1 trillion is needed to fix it

The industry states its revenuein trillions, and another $1 trillionis still needed to fit it.

To offer a little added perspective on thesize of the market, healthcare and socialassistance accounts for 30% of the servicesector, which represents 55% of the totaleconomic activity of the entire country,according to the bureau.The types of businesses in the report'sbroad measurement include everythingfrom hospitals to dentists to kidney dialysiscenters.

Patient out-of-pocket payments are onthe rise. Those amounts are influenced bybenefit design and are certain to show continuedincreases in the immediate futureas a reflection of the trend toward higherdeductibles and copays. Just for reference,in 2008, physician offices collected $36billion directly from patients, and hospitalscollected $32 billion.On top of the huge amounts of moneyalready in the system, even more is proposedto fix the system, such as the Housebill approved in November, priced at $1trillion over 10 years. The CongressionalBudget Office scored the Senate bill at $871billion. Lawmakers continue to debateexactly where the funding will come fromto pay for new policies.If you're like me, amounts like that arealmost incomprehensible. Even writingout all the digits-for example, $1 trillionhas 12 zeros-fails to make the numbersconcrete.

HOW MUCH IS IT REALLY?According to, $1 trillion, in $1bills, in half-inch stacks set up on their sides(not end-to-end), would circle the Earth'sequator 2.72 times. And that's just thecost to fix the system. Healthcare annualspending, if the system isn't improved, ispredicted to reach $4 trillion in the nextseven years, or nearly 11 times around theequator.

As policy changes move forward, thepractical reality of their effects on the nation'seconomy must be made abundantly clear, notjust to political leaders, but to employers andpatients as well. We can't afford another triparound the equator.