Health Coverage Outlays More than Official Reports

March 28, 2011 ( –  Consumers are spending $363 billion, or 14.7% more, on health care than traditionally reported in official government accounts, according to a new Deloitte study.

A news release said this spending falls outside of conventionally-counted health care costs such as doctors, prescriptions, hospitals and health insurance coverage. Demonstrating the significance of the amount consumers now spend on health care, the additional costs captured support an increase in consumer discretionary spending on health care from 16.2%, for items traditionally reported by the government, to 19.9%, which surpasses housing and utility costs at 18.8%.

The announcement said more than half of the spending (55%) in these ancillary areas was for the estimated value of supervisory care, or care given by unpaid relatives and friends. Supplemental expenditures included complementary and alternative medicine (CAM) practitioners (8%) and products (1%), functional foods and other nutritional products, vitamin and mineral supplements (15%), health publications (1%), ambulance services (3%), other ambulatory care, such as blood banks, some health promotion programs (6%), mental health services (8%), homes for the elderly (4%) and weight loss facilities (1%).

“It has been one year since the passage of health care reform, and our report sheds new light on the hidden costs of health care, and how these costs can add up significantly to billions of dollars and can even eclipse housing as a household expense, “ said Paul Keckley, Ph.D., executive director, Deloitte Center for Health Solutions, in the news release. “Our study explores the financial context for the decisions consumers – not simply patients – make about how they spend their money on health care, which will only increase in importance as health care reform continues to take hold.”

Additional findings in the Deloitte health care spending report 

  • The total 2009 U.S. per capita expenditures were $9,217; professional services (29%) and hospital care (27%) were the biggest categories.
  • The estimated value of supervisory care ($199 billion) is significantly higher than total spending on nursing homes ($144 billion) and total spending on home health care ($72 billion), and was only somewhat less than prescription drug expenditures ($246 billion).
  • Around 70% of spending on nutrition industry items was directed towards functional foods, a category which includes such items as enriched cereals, breads, sports drinks, bars, fortified snack foods, baby foods and prepared meals.
  • Seniors account for 36% ($1.01 trillion) of total health care expenditures, but are only 13% of the population.
  • Nearly 83% of the $2.83 trillion 2009 U.S. health expenditures were attributed to those with family incomes of $100,000 or less, who make up 89% of the total population.
  • One in five (21%) adults surveyed said they paid a medical bill late in the last 12 months.
  • A total of 27% of adults estimate that 5% or less of their household budget is spent on health care; 17% said 26% or more is spent on health care.
  • A majority (80%) of adults surveyed said they would use generic medicines, seek free advice from a pharmacist or other medical professional (70%), and use technology (61%) if it would save money for health care.
  • Approximately 43% would visit a retail clinic, and one in five (20%) would visit another country for more affordable medical care.
  • 26% would skip a medical test or screening, skip a visit to the dentist or doctor altogether (26%), or skip refilling a prescription (22%) to save money on health care.

The Deloitte Center for Health Solutions commissioned Harris Interactive to conduct a telephone survey of 1,008 U.S. adults 18 years-old and older between September 29 – October 4, 2010. The report is here.