It’s common knowledge in the healthcare world that a small fraction of patients account for a large share of health expenses. Having a big pool of healthy patients to cover their costs makes the system work.

However, when we know that tax dollars are on the line, it feels a little more painful to read reports such as the Government Accountability Office’s analysis of Medicaid data and learn that the most expensive 5 percent of Medicaid-only enrollees accounted for almost half of the expenditures for all Medicaid-only enrollees – those who were not also eligible for Medicare.

Even more, the most expensive 1 percent of Medicaid-only enrollees accounted for about one-quarter of expenditures.

By comparison, the least expensive 50 percent of Medicaid-only enrollees accounted for less than 8 percent of the expenditures. And about 12 percent of enrollees had no expenditures at all. If only we could reverse this for Medicaid and our social safety-net programs. 

Mental health issues were most common among the high-expenditure enrollees (52 percent). Substance abuse (19 percent), diabetes (18 percent), asthma (14 percent), and HIV/AIDS (3 percent) were consistent conditions among high-expenditure enrollees, as well as other services such as childbirth or delivery of babies (10 percent). Except for childbirth, these are chronic and incurable conditions, so it's not surprising that we spend so much on these individuals.

ObamaCare expanded Medicaid rolls and the Administration is pushing for still more states to jump on board. Analysis like this is critical to understand how our bucks are being spent.

The Washington Times reports:

The GAO conducted the study as some states expand Medicaid under the Affordable Care Act.

In 2012, the Supreme Court said states can choose whether to extend the federal-state benefits to those making up to 138 percent of the federal poverty level. The federal government picks up the tab for expansion until 2016, a share that scales down to 90 percent in 2020 and beyond.

The Congressional Budget Office has estimated that 8 million additional people could get Medicaid or Children’s Health Insurance Program as a result of Obamacare by 2016, when compared to 2012.

“As Medicaid enrollment increases, more extensive information about high expenditure enrollees who are not dually eligible for Medicare — that is, Medicaid-only enrollees — could enhance efforts to manage expenditures and facilitate improvements to care,” the GAO said.

The policy implications are major. If certain conditions like diabetes and mental illness predominantly drive people to turn to Medicaid for healthcare, perhaps we should figure out how these conditions can be dealt with by private solutions at a lower cost. These are chronic conditions that are generally incurable, but perhaps there are innovations in the delivery and care for these conditions that the government has not tapped into.

When ObamaCare bites the dust and we get a second shot at reforming our health system, it will be time to find innovative ways to ensure that no sick American goes without health care, while at the same time  finding ways to rein in the cost. This is a matter of responsibility and accountability.