Where population health misses the mark: breaking the 80/20 rule

Conventional population management theory, predicated on prevention and keeping the healthy majority healthy, fails to address the root cause of the unsustainable health care spending trajectory in the United States. The national health care agenda has been heavily influenced by the assumptions that disease prevention and the general promotion of "population health" will be sufficient to reduce health care spending to a sustainable level. However, a very small subset of the population with chronic and complex conditions account for a disproportionate share of health care spending, and unnecessary variation in the care of those chronic and complex episodes wastes 20% to 30% of the episodic spending. Health care spending follows what is known as "the 80/20 rule," with 80% of all spending being incurred by only 20% of the population. Whether a population is defined as a company, a county, or a country, the overwhelming majority of their health care spending comes from a small minority of the individuals, and the bulk of that spending is associated with either largely unavoidable and unpredictable single events or complex episodes of care. Achieving an economically sustainable health care system will require more efficient and effective delivery of those complex episodes of care.