US Healthcare: 5% people account for 50% of the cost: the Camden experiment

You have heard of the 80:20 or Pareto principle, but the 5:50 with US healthcare costs  is  just amazing. And guess what – all those in that bottom of pyramid 5% who go innumerable times to the Hospital Emergency Rooms (ER) and rack up  what becomes 50% of the cost-  are  rather unhappy with US society for the quality and access to healthcare it gives them. Who would like to go through the hassle of the ER time and again? Ironically,society spends huge amounts of money and yet the beneficiary is unhappy.

So can you serve the bottom 5% better with healthcare delivery? The Camden Coaltion of Healthcare providers under the initiative of Jeffrey Brenner is trying to do just that. By just asking doctors about the worst of the worst patients they identified spots around Camden ,NJ that had the highest costs for health-care. These included some patients cost insurers $3.5 million dollars ( see page 42,column 1 of the New Yorker article). Brenner then just tried to customize and bring the health solution to these poorest of patients including social workers in the team. When the team realized that one building had a large bunch of patients who regularly went to the ER they opened up primary care in that building and the situation is improving significantly. For as Brenner says, numerous ER visits indicate  a failure of primary care.

Can this Camden approach be replicated in other communities? Perhaps yes if local governments, the medical and insurance community get together on the task.

In a supply chain risk sense the Camden approach is to manage patient risk and cost upstream i.e. at the patient's home for the sickest and poorest patients. It is a brilliant segmentation approach that is not only effective for patient outcomes and costs but also has a huge "do good" feeling for all involved.

As an almost afterthought, it can bring down US healthcare costs, an absolute priority. Contact StratoServe.

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