8020ruleVilfredo Pareto hypothesized the 80/20 rule which became known as the Pareto Principle.  In his study, he found 80% of the land in Italy was owned by 20% of the people.

Using the same basis, we hypothesized that 80% of healthcare’s spend is consumed by 20% of the patients.  As luck (or more appropriately science) would have it, we were not far off.  Using our 3.5 billion claims in 2015 and 2016, we found that 80% of the spend is consumed by 17.8% of the patients.  In healthcare, like land ownership in Italy, a large portion of our expenditures as an industry is being consumed by a small percentage of users.  Most of this phenomenon in healthcare is driven by multiple chronic diseases which affects a disproportionately growing number of Americans.

Today, we are merely understanding how utilization translates into different care options for patients.  What if we could lower healthcare costs by 20% by just getting the right patients to the right providers?  We will dig into this more at a later date.


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Source: Perception