Rising OutOfPocket Spending For Chronic Conditions, a Ten Year Trend

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Rising Out-Of-Pocket Spending For Chronic
Conditions, a Ten Year Trend

• Kathryn Paez, Lan Zhao and Wenke Hwang

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Purpose of Study

• Assess the impact of chronic conditions on
  out- of-pocket (OOP) spending.
• Chronically ill particularly vulnerable to rising
  healthcare costs
• Insurance redesign increasing OOP costs for
  employees
• Rising costs reduce adherence to drug treatments
• Identify trends comparing 2005 to 1996.

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Key Findings
Greatest growth is in 3 or more chronic conditions
3.0
4.0
1.1
5.9
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Key Findings
Growing disease burden in middle age
16.6
17.6
9.7
1.7
0.5
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Key Findings
Greatest growth in real OOP spending found from
early adulthood to early old age
2005 vs. 1996, holding disease prevalence constant
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Key Findings
OOP spending is driven by prescription drugs.
(2005)
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Key Findings
OOP spending is similar regardless of
income. Medicaid is protective. (2005)
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Implications

• Expand coverage
• to uninsured and underinsured
• Consider value-based insurance designs (VBID)
• to improve coverage to the underinsured
• Value primary prevention
• Healthy lifestyle practices must become the
  cultural norm rather than the exception.