Medicare Spending for People with Multiple Ch i C diti
Chronic Conditions: A Cautionary Tale
A C ti
T l
Gretchen Jacobson, Ph.D.
Coauthors: Anthony Damico M H S
Anthony Damico, M.H.S.
Tricia Neuman, Sc.D. Gerard Anderson, Ph.D.
Robert Herbert
Academy Health
Academy
Health
June 27, 2010
EXHIBIT 2
Health Reform and Chronic Conditions: Key Provisions
Medicare
• Center for Medicare and Medicaid Innovation (Sec. 3021) • Demo that allows eligible Medicare beneficiaries, including those with 2 or more chronic conditions, to receive home‐based primary care (Sec. 3024) Medicaid
• Federal funding for states to provide health homes to coordinate care for Medicaid enrollees with chronic conditions (Sec. 2703)
• Grants to states to develop programs to help Medicaid enrollees stop smoking, lower pp g
p
p
g,
cholesterol, lower blood pressure, lose weight, or manage diabetes (Sec. 4108)
Quality
• Secretary required to develop quality measures for at least 10 acute and chronic Secretary required to develop quality measures for at least 10 acute and chronic
conditions within 2 years (Sec. 3013, as modified by Sec. 10303)
• New program to support medication management services for individuals with chronic conditions (Sec. 3503)
conditions (Sec 3503)
Other
• Additional funds for provider education on chronic disease management (Sec 5305 5405 and 5509)
(Sec. 5305, 5405, and 5509)
•
Additional councils, funds, and efforts to prevent chronic conditions (Sec. 4001, 4002, 4004, 4202)
EXHIBIT 3
Previous Research on Medicare Spending for Chronic Conditions
• Beneficiaries with chronic conditions account for a disproportionate share of Medicare spending1
Distribution of Fee‐For‐Service Medicare Beneficiaries Ages 65 and Older with 2 or More Ch i C diti
Chronic Conditions and Medicare Spending, 2007
d M di
S
di 20071
6%
27%
• Average Medicare spending increases with the number of chronic conditions1
94%
73%
• Increased spending on chronic diseases is a key factor driving the overall growth in FFS Medicare g
spending2
Total FFS Medicare beneficiaries, Total FFS Medicare spending
ages 65+
SOURCES: 1 Anderson G. Chronic conditions: making the case for ongoing care. Baltimore: Johns Hopkins University, February 2010.
2 Thorpe KE, Ogden LL, and Galactionova K, “Chronic conditions account for rise in Medicare spending from 1987 to 2006,” Health Affairs (2010): 718‐724.
EXHIBIT 4
Purpose and Methods
Purpose: Estimate Medicare expenditures for all combinations of the 17 most common chronic conditions h i
diti
Data:
Standard Analytic File (5% sample of Medicare claims), linked 2005‐2007
Part A and B data; not Part D (prescription drugs)
No spending for beneficiaries in Medicare Advantage plans
Includes institutional population; excludes ESRD
Includes institutional population; excludes ESRD
Methods:
• Examines mean Medicare expenditures in 2007 for all combinations of the 17 most d
d
f
ll
b
f h
common chronic conditions
• Identifies beneficiaries with chronic conditions as those with one of the conditions i 2005 2006
in 2005 or 2006
• Does not adjust for or exclude spending incurred by beneficiaries who died
• Analysis based on descriptive data
EXHIBIT 5
Medicare spending for beneficiaries with individual chronic conditions “exceeds” total Medicare FFS spending
p
g
Share of Medicare FFS spending, 2007
450%
400%
10 Other Chronic
Chronic Conditions
350%
300%
250%
COPD (26%)
COPD
(26%)
Arthritis (31%)
Cataracts (31%)
200%
150%
100%
50%
0%
Diabetes (34%)
Ischemic Heart Disease (39%)
Hyperlipidemia
(58%)
Hypertension (76%)
EXHIBIT 6
Findings: Medicare per capita costs vary widely among beneficiaries in p
g p,
specific chronic condition groups, 2007 Average Medicare per capita costs
$50,000 $47,089 $47,089 $40,000 – Mean  Median
$47,089 $47,089 $47,089 $37,467 $47,089 $37,050 $31,658 $30 000
$30,000 $20,000 $10,000 $0 $1,715 $2,766 $2,586 Hypertension
Diabetes
Arthritis
$4,853 $4,408 $4,828 $1,723 Chronic Kidney
Kidney Disease
$1,715 Heart failure Alzheimer’s Depression Osteoporosis SOURCE: KFF/Johns Hopkins analysis of the Medicare Standard Analytic File, 2005‐2007.
$3,148 COPD EXHIBIT 7
Findings: Average Medicare per capita costs increase by the number of yg
y
chronic conditions, but also vary greatly, 2007
Average Medicare per capita costs
$40 000
$40,000
$35,000
– Mean  Median
12% of beneficiaries with 4 chronic conditions have lower average Medicare spending than the average cost of beneficiaries with 2 chronic conditions
$30,000
$26,782 $25,000
$22,214 $19 154
$19,154 $20,000
$15,000
$34,192 $11,432 ,
$10,000
$5,000
$0
$2,075 $1,723 $2,210 $1,715 $2,766 1
2
3
4
5
Number of Chronic Conditions
NOTE: Chronic condition count includes the 17 most prevalent chronic conditions. Beneficiaries may have other conditions.
SOURCE: KFF/Johns Hopkins analysis of the Medicare Standard Analytic File, 2005‐2007.
EXHIBIT 8
Findings: No single combination of conditions that includes diabetes accounts for the majority of Medicare spending for beneficiaries with diabetes
j y
p
g
Other Medicare spending
66%
Spending for beneficiaries with diabetes
34%
All other combinations of conditions
of conditions
92%
Diabetes + Hypertension + Hyperlipidemia, 4%
i b
li id i %
Diabetes + Hyperlipidemia, 1%
Diabetes + Hypertension, 2%
Diabetes only, 1%
Total Medicare FFS spending for the study sample, 2007= $234 billion
l 2007 $234 billi
SOURCE: KFF / Johns Hopkins analysis of the Medicare Standard Analytic File, 2005‐2007.
Total Medicare spending for beneficiaries with di b
diabetes, in the study sample, 2007= i h
d
l 2007
$80 billion
EXHIBIT 9
Findings: Similarly, no single combination of conditions that includes depression accounts for the majority of Medicare spending for beneficiaries with depression
j y
p
g
p
Other Medicare spending
81%
Spending for beneficiaries with
beneficiaries with depression 19%
All other combinations of conditions
of conditions
92%
Depression + Hypertension + Hyperlipidemia, 1%
Depression + Hyperlipidemia, 1%
i
li id i %
Depression + Hypertension, 2%
Depression only, 4%
Total Medicare FFS spending for the study sample, 2007= $234 billion
l 2007 $234 billi
SOURCE: KFF / Johns Hopkins analysis of the Medicare Standard Analytic File, 2005‐2007.
Total Medicare spending for beneficiaries with d
depression, in the study sample, 2007= i
i h
d
l 2007
$43 billion
EXHIBIT 10
Findings: Medicare spending for beneficiaries with COPD is also primarily for combination of conditions
Other Medicare spending
74%
Spending for beneficiaries with COPD 26%
All other combinations of conditions
of conditions
94%
COPD + Hypertension + Hyperlipidemia, 1%
COPD + Hyperlipidemia, 1%
li id i %
COPD + Hypertension, 2%
COPD only, 2%
Total Medicare FFS spending for the study sample, 2007= $234 billion
l 2007 $234 billi
SOURCE: KFF / Johns Hopkins analysis of the Medicare Standard Analytic File, 2005‐2007.
Total Medicare spending for beneficiaries with COPD i h
COPD, in the study sample, 2007= d
l 2007
$60 billion
EXHIBIT 11
Conclusions and Policy Implications
• Efforts that target individuals based on a specific chronic disease, without attention to combinations of conditions, may be less successful in achieving cost and care outcomes • Eff
Efforts that target individuals based on the number
h
i di id l b d
h
b of chronic conditions, f h i
di i
without attention to combinations of conditions, may be less successful in achieving cost and care outcomes • Health reform efforts to control the costs of chronic conditions may use resources inefficiently if they do not target specific combinations of conditions
• Careful consideration should be given to tradeoffs related to per capita spending, prevalence, and the viability of interventions to reduce
spending, prevalence, and the viability of interventions to reduce spending
• Future research should explore additional ways of identifying high cost combinations of conditions that are ripe for interventions