The Rise In Spending Among Medicare Beneficiaries: The Role Of Chronic Disease Prevalence And Change

1
The Rise In Spending Among Medicare
Beneficiaries The Role Of Chronic Disease
Prevalence And Changes In Treatment Intensity

• Kenneth E. Thorpe and David H. Howard

http//content.healthaffairs.org/cgi/content/full/
hlthaff.25.w378v1/DC1
2
Medicare Spending

• Medicare spending is projected to nearly triple
  from 3 of U.S. gross domestic product (GDP) in
  2006 to 8.8 percent by 2030.
• Two groups of previous studies have attempted to
  quantify the factors responsible for the rise in
  spending over time. The first set of papers
  tracks changes in Medicare spending over time by
  provider (hospitals, prescription drugs,
  physician services, and so on).
• Second group estimates the impact of disability,
  obesity, and other risk factors on Medicare
  spending during the 1990s

3
This study

• Examines the trends in Medicare beneficiaries
  annual health care spending. We provide further
  evidence on the sources of spending growth by
  documenting increases in treated disease
  prevalence and in the number of beneficiaries
  treated for multiple conditions. We also present
  new data concerning changes in treatment
  intensity.
• Data for the study were drawn from three sources
  
• the 1987 National Medical Expenditure Survey
  (NMES),
• the 2002 Medical Expenditure Panel Survey (MEPS),
  and the
• National Health and Nutrition Examination Survey
  (NHANES III for 19881994 and NHANES 19992002).
• All are nationally representative surveys of the
  noninstitutionalized population. All estimates
  from each data set used each surveys sampling
  weights (using the svymean command in STATA
  version 8) to produce nationally representative
  estimates.

4
(No Transcript)
5
Treated Prevalence

• Since the treated prevalence of heart disease in
  the Medicare population was relatively constant
  over time (27.0 in 1987, compared with 27.8 in
  2002), most of the spending increase reported in
  Exhibit 1 is attributable to an increase in
  spending per treated case.
• In contrast, the treated prevalence of mental
  disorders increased sharply, rising from 7.9 in
  1987 to 19.0 in 2002, and so spending increases
  are partly attributable to growth in the number
  of treated cases.

6
(No Transcript)
7
Discussion

• Virtually all of the growth in spending from 1987
  to 2002 can be traced to the 20 point increase
  in the share of Medicare patients receiving
  medical treatment for 5 or more conditions during
  a year. The factors responsible for these trends
  are likely to continue, leading to further
  increases in spending and intensifying the
  financial pressures on Medicare.
• The findings raise important issues concerning
  the clinical management of Medicare beneficiaries
  with multiple chronic diseases. More than half of
  all beneficiaries report receiving medical
  treatment for 5 or more conditions during a year.
  The results highlight the need to develop models
  and standards of care designed to address the
  clinical problems facing patients with multiple
  complex comorbidities. Medicare, the Department
  of Veterans Affairs (VA), and other payers have
  increased their efforts to more effectively
  manage chronic disease.