Where Your Health Dollars Go

"Where your Health Dollars Go" is a map of the US healthcare system and its components. By following the allocation and flow of money in healthcare, the thread of how the organizations, departments, and major players are connected becomes apparent.

The visualization serves two purposes. The first is to provide the public and professionals interested in the healthcare space a way to increase understanding and explore how all the pieces fit together. The second is to give providers, patient advocacy groups, health policymakers, and health economists a visual communication tool to discuss issues at the higher health systems level.

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*Tax exclusion $ amount is not added into the $3,500B national health expenditure. Though it is a part of expenditure, it is not included in many data sources and is unclear how it should be best organized without causing contradictions in the expenditure breakdowns.

*$168B in research is a higher $ amount than the category breakdowns within it, as the $ amounts are taken from sources from differing years.

*All $ amounts have been rounded to the nearest billionth for readability and scanning purposes.

The US healthcare system is extremely convoluted. To call it “spaghetti” would be an understatement. Because of the complexity, accurately capturing and following associative and financial relationships is difficult. The wider picture of how organizations are connected, how money flows through the US healthcare system is difficult to see. As a result, public discourse around US healthcare issues and reforms are often too narrow in context. Many consumer services and products developed in the health technology space don’t consider long term, primary, secondary or tertiary, downstream effects they will have on the market or for patients in this wider view.

"Where your Health Dollars Go" provides a detailed high-level view of major components within the US healthcare system and how they interact. The map serves as a communication tool for health professionals, organizations, groups, and policymakers to develop services and policies with the context of the larger picture of how their plans may impact the nation from the government to individual patients. The visualization also provides a canvas for professionals to use, projecting their services and products on the map, to more effectively drive development that aligns with our patient health values.

We’d love your feedback

The current draft of the visualization maps some of the major players. However, there are many parts of the system that have yet to be incorporated, and there may yet be improved ways to represent those relationships than the approach taken here.

Send feedback on this draft to hello@goinvo.com, and help us, as well as others, gain a better understanding of the often convoluted, and complex, system that is our healthcare.

Methodology

Below is a description of the methodology used in creating the "Where your Health Dollars Go" visualization. It is updated based on continuing research and feedback.

The components of the healthcare system to include in the visualization were primarily based on what public data was available. Some expenditures were based on older estimates due to difficulty in finding up to date data (such as administrative costs for private health insurance).

Other expenditures, such as numbers on fraud, waste, and abuse for health insurance programs, are best guesses based on a range of estimates as referenced below.

Column 1, National health expenditure section

$3,500B, 2017 National Health Expenditure¹

Column 2, National health expenditure section

$2,600B, 2017 National health insurance¹
$366B, 2017 Out of pocket¹
$355B, 2017 Other third party payers and public health activity¹
$250B, 2017 Tax exclusion, employee health insurance subsidy²
$168B, 2017 Research³

Column 3, National health expenditure section

$1,200B, 2017 Private health insurance⁴
$1,400B, 2017 Public health insurance¹
$103B, 2015 Private funds⁴
$36B, 2017 Public funds⁴
$5B, 2017 Nonprofit foundations⁴

Column 4, National health expenditure section

$1,030.8B, 2017 Patient benefits⁵
- $3,500B, 2017 private health insurance expenditure¹minus $169.2B 2017 estimated administrative costs in private health insurance.
$169.2B, 2017 Administrative costs, private health insurance⁵
- 14.1% in private health insurance administrative costs⁵, multiplied by $3,500B 2017 expenditure¹
$804.51B, 2017 Medicare expenditure⁶
$582B, 2017 Medicaid expenditure⁷
$133B, 2017 Other health insurance programs¹
$72B, 2015 Pharmaceutical private funds³
$17B, 2015 Medical technology private funds³
$6B, 2015 Biotechnology private funds³
$7B, 2015 Other sectors³

Column 5, National health expenditure section

$534.64B, 2018 Insurance claims & indemnities for Medicare⁶
$203.73B, 2018 Grants, subsidies, contributions for Medicare⁶
$66.13, 2018 Other expenses for Medicare⁶
$71B, 2017 Administrative costs of Medicaid⁸
- 12.2% is mean administrative loss % for MCOs, multiplied by$582B 2017 Medicaid expenditure⁷
$511B, 2017 Patient benefits from Medicaid⁸
- $582B, 2017 Medicaid expenditure⁷, minus $71B 2017 administrative costs of Medicaid⁸, minus $46B 2017 administrative costs of Medicaid⁹
$45.8B, 2014 Fraud, waste, and abuse within Medicaid⁹
$52.55B, 2017 TRICARE expenditure¹⁰
$17.52B, 2017 CHIP expenditure¹¹
$62B, 2017 Other health insurance programs not listed here
- $133B, 2017 Other health insurance programs¹, minus $63B 2017 TRICARE¹⁰, minus $18B 2017 CHIP¹¹

Column 6, National health expenditure section

$454.14B, 2018 Patient benefits for Medicare¹²
- $534.64B, Insurance claims & indemnities, minus$80.5B 2018 fraud, waste, and abuse¹²
$80.5B, 2018 Fraud, waste, and abuse for Medicare¹²
- 10% estimated fraud, waste, and abuse in 2012¹², multiplied by $804.51B Medicare expenditure⁶

Column 1, Personal health expenditure section

$2,800B, 2016 Personal health expenditure¹³

Column 2, Personal health expenditure section

$1,070B, 2016 Hospital, personal health expenditure¹³
$658B, 2016 Physician and clinical, personal health expenditure¹³
$325B, 2016 Prescription drugs, personal health expenditure¹³
$160B, 2016 Nursing care facilities & continuing care, personal health expenditure¹³
$123B, 2016 Dental, personal health expenditure¹³
$375B, 2016 Other personal health expenditure¹³

Column 1, Health and human services expenditure

$1,110B, 2018 Health and human services expenditure¹⁴

Column 2, Health and human services expenditure

$1T, 2018 Centers for Medicare & Medicaid Services¹⁴
$47B, 2018 Administration for children & families¹⁴
$26B, 2018 National Institutes of Health¹⁴
$6B, 2018 Centers for Disease Control & Prevention¹⁴
$5B, 2018 Indian Health Service¹⁴
$4B, 2018 Substance abuse and mental health services administration¹⁴
$2B, 2018 Food and drug administration¹⁴

Author

Edwin Choi, GoInvo

Edwin is a biologist turned designer. Combining the sciences and art, he orchestrates healthcare software experiences to be beautiful and clinically refined. Edwin joined Invo in 2015, is a graduate of Washington University, and has a masters in biomedical design from Johns Hopkins University.

References

Historical - Centers for Medicare & Medicaid Services. (2018, December 11). Retrieved Jan 2019: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html
The Hidden Subsidy That Helps Pay for Health Insurance. (2018, January 20). Retrieved Jan 2019: https://www.nytimes.com/2017/07/07/health/health-insurance-tax-deduction.html
U.S. Investments in Medical and Health Research and Development. (n.d.). Retrieved Jan 2019: https://www.researchamerica.org/sites/default/files/2016US_Invest_R&D_report.pdf
US Census Bureau. (2018, September 12). Health Insurance Coverage in the United States: 2017. Retrieved Jan 2019: https://www.census.gov/library/publications/2018/demo/p60-264.html
Administrative costs of health insurance schemes: Exploring the reasons for their variability. World Health Organization. (2010). Retrieved Jan 2019: https://www.who.int/health_financing/documents/dp_e_10_08-admin_cost_hi.pdf
Data Lab - Budget Function – U.S. Treasury. (n.d.). Retrieved Jan 2019: http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_123.pdf
CMS Fast Facts - Centers for Medicare & Medicaid Services. (2018, August 1). Retrieved Jan 2019: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/cms-fast-facts/index.html
Medicaid risk-based managed care: analysis of administrative costs for 2016. Milliman. (2017). Retrieved Jan 2019: http://www.milliman.com/uploadedFiles/insight/2017/MedicaidAdminReport-2016.pdf
Office of Inspector General, Department of Health and Human Services. (n.d.). Management Challenge 2: Fighting Fraud, Waste, and Abuse in Medicare Parts A and B. Retrieved Jan 2019: https://oig.hhs.gov/reports-and-publications/top-challenges/2015/challenge02.asp
Annual Evaluation of the TRICARE Program. Fiscal Year 2018 report. (n.d.). Retrieved Jan 2019: https://www.health.mil/Military-Health-Topics/Access-Cost-Quality-and-Safety/Health-Care-Program-Evaluation/Annual-Evaluation-of-the-TRICARE-Program?type=Reports#RefFeed
Total CHIP Spending (in millions). (2018, December 6). Retrieved Jan 2019: https://www.kff.org/medicaid/state-indicator/total-chip-spending/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
The $272 billion swindle. (2014, May 31). Retrieved Jan 2019: https://www.economist.com/united-states/2014/05/31/the-272-billion-swindle
Health, United States, 2017. US Department of Health and Human Services. (2017). Retrieved Jan 2019: https://www.cdc.gov/nchs/data/hus/hus17.pdf
FY 2018 Budget in Brief - Overview Tables. (2017, May 23). Retrieved Jan 2019: https://www.hhs.gov/about/budget/fy2018/budget-in-brief/overview-tables/index.html

Where Your Health Dollars Go

To Understand the Healthcare system, follow the money

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Methodology

v1 - 30.Jan.2019

Author

References