The bottom 72 percent of Illinois Medicaid recipients account for 10 percent of total program spending. Average annual expenditures in this group were about $564, virtually invisible on the chart. We can’t save much money through any incentive system aimed at the typical Medicaid recipient.

We spend too little on the bottom 80 percent to get much back from that. We probably spend too little on most of these people, anyway. For the bulk of Medicaid beneficiaries, cost control is less important than improved prevention, health maintenance and access to basic medical and dental services.

The real financial action unfolds on the right side of the graph, where expenditures are concentrated within a small and incredibly complicated patient group. The top 3.2 percent of recipients account for half of total Medicaid spending, with average expenditures exceeding $30,000 annually.

Many of these men and women face life-ending or life-threatening illnesses, as well as cognitive or psychiatric limitations. These patients cannot cover co-payments or assume financial risk. In theory, one might impose patient cost-sharing with some complicated risk-adjustment system.

In practice, that is far beyond current technologies and administrative capabilities. Even if such a system were available, we couldn’t push the burden of medical case management onto these patients or their families.

Decade of analysis has revealed the shocking truth behind medical costs. It turns out that what drives costs are sick people. No kidding. This is why the word “wonk” has become a synonym for sophist or a grifter. Harold Pollack seems like a decent fellow and his credentials suggest he may even know a few things about the medical business, but you have to wonder what he was doing before he made this discovery. It’s hard to imagine why anyone would be shocked to learn that sick people drive health costs.

People have always known that the young feel like they are indestructible, because they are healthy and vibrant. As a result, they don’t need to see the doctor, take a bunch of pills or use various health services. On the other hand, old people have all sorts of things going wrong, so they need emergency services, doctors, pills and treatments. In modern societies like ours, old people organize their lives around regular trips to the doctor. Most of it is preventative and low cost, but it adds up as the population grows older.

That’s why the basic question, regarding public health, is how to pay for the old people and the sick poor people. The former need lots of care, often more than they can afford. The latter needs less care, but they have no money. People used to know this. One option is to rely on private charity and market forces to address the problem. Another option is to have the state pay for health care. A third option is a mix, where the state operates as the insurer of last resort, but otherwise private arrangements prevail.

Look at these discussions a century ago, when the notion of the welfare state first gained traction in the West. People understood these truths. No matter what sort of system you adopt, it means some form of rationing, as all goods and services are rationed. That means some people are told they can only have so much while others get more. In some cases, the person gets nothing at all. This is in every part of life. There are no goods that are not rationed by price or by some control over supply.

Rationing is a part of life, yet somehow our rulers have decided that health care is an exception, so there must be a way to arrange things so everyone gets all the health care they want, without having to pay for it. Guys who insist on calling themselves wonks keep working on their perpetual motion machines so that one day, if we arrange things just the right way, we can have plenty. It’s a form of alchemy. Instead of turning base metals into gold, the modern alchemists seek to conjure plenty from scarcity.