Arizona Healthcare Dollars by Service Category, 2006 (In Billions)

• Nearly $2 billion, or 10% of total healthcare expenditures for Arizonans under age 65, is spent on non-medical costs, including:
  • The cost of processing claims;
  • Medical and pharmaceutical management expenses;
  • Insurance company/health plan overhead, including product design, pricing and reserve expenses;
  • Product marketing, including sales commissions and advertising; and,
  • Profit and contingency.
• Most analyses of pharmaceutical costs do not include co-payments. When these out-of-pocket costs are included, as they are in this analysis, pharmaceuticals comprise 22% of overall healthcare expenses.

Notes:

1. Health care expenditures shown do not include Behavioral Health Services, Long Term Care Services, or Dental Services. These figures do not include expenditures on services not covered under each segment’s respective insurance products.
2. Allocation of health care dollars to service category may vary somewhat among primary market segments. Medicaid services in particular may allocate health care dollars to the "Other" service category that may be more typically allocated to the “Hospital Outpatient" or other service categories.
3. Includes out-of-pocket (OOP) expenses. OOP expenses relate to costs the individual pays when a healthcare service was provided; for instance, annual deductibles, co-payments, and coinsurance.
4. Due to rounding, numbers may not sum to 100%.