Chronic Conditions Account For Rise In Medicare Spending From 1987 To 2006
[Jose's Notes]
This article points to a significant opportunity to leverage tele-health technologies to help manage patients with chronic diseases.
Along those lines, the Chronic Care Model (“CCM”) is a robust, proven mechanism to improve outcomes for patients with chronic care illnesses.
I’ve developed a proposal for a technology-rich platform to enhance and extend the CCM through the use of patient-controlled mobile phones. We call this “mCCM”. mCCM is envisioned as a platform to facilitate patient self-management when dealing with chronic conditions.
Tele-health systems are sometimes designed from a technological perspective. OpenPHI proposes to use an existing care model (CCM) as the core and then to wrap the most effective mobile technology elements around the patient’s point of view.
See http://www.openphi.com/files/OpenPHI_Mobile_Chronic_Care_Model.pdf for the full proposal.
Comments welcome.
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http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2009.0474
Health Affairs, doi: 10.1377/hlthaff.2009.0474
(Published online February 18, 2010)
(c) 2010 by Project HOPE
Chronic Conditions Account For Rise In Medicare Spending From 1987 To 2006
Kenneth E. Thorpe1,*, Lydia L. Ogden2 and Katya Galactionova3
1 Kenneth E. Thorpe (kthorpe{at}sph.emory.edu) is the Robert W. Woodruff Professor and Chair of the Department of Health Policy and Management, Rollins School of Public Health, Emory University, in Atlanta, Georgia.
2 Lydia L. Ogden is on assignment from the Centers for Disease Control and Prevention and is currently chief of staff for the Center for Entitlement Reform and a doctoral candidate in health services research and health policy at the Rollins School of Public Health.
3 Katya Galactionova is a research analyst at the Department of Health Policy and Management, Rollins School of Public Health.
*Corresponding author
Medicare beneficiaries’ medical needs, and where beneficiaries undergo treatment, have changed dramatically over the past two decades. Twenty years ago, most spending growth was linked to intensive inpatient (hospital) services, chiefly for heart disease. Recently, much of the growth has been attributable to chronic conditions such as diabetes, arthritis, hypertension, and kidney disease. These conditions are chiefly treated not in hospitals but in outpatient settings and by patients at home with prescription drugs. Health reform must address changed health needs through evidence-based community prevention, care coordination, and support for patient self-management.
Key Words: Medicare – Health Spending – Chronic Care – Health Reform
Full text freely available at http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.0474v1
Slowing the rise in health spending is among the nation’s top health policy priorities. Absent policy change, the Congressional Budget Office (CBO) estimates that Medicare spending will grow at an average of 7 percent each year from 2010 to 2018, rising to $879 billion annually and 4 percent of gross domestic product (GDP). The rate of growth of Medicare spending over the long term is predicted to exceed the rate of growth in federal revenues and the overall economy. As a result, much academic and political attention has focused on reforming Medicare as imperative for restraining spending increases.
Many Medicare reform proposals designed to slow the growth in spending would redirect costs from the government to others, such as enrollees and participating providers. The slowdown would be accomplished by reducing provider payments, increasing the age of Medicare eligibility, implementing means testing for Medicare, restricting coverage as with the Part D “doughnut hole,” and increasing copayments and deductibles. These approaches are unlikely to produce long-term reductions because they fail to address the key factors driving the rise in health care spending overall and in Medicare spending, particularly for chronic diseases. Understanding these facts is essential to reaching the right policy solutions.
Common approaches to tracking trends in health spending analyze changes in use (who is seeking care and for what), payment source (who pays), and provider (who gets paid). Analyses also examine trends in the inputs used to treat patients, such as rising rates of diagnostic imaging and treatment duration and intensity, as well as changes in the definition of treatable disease and targeted patient populations for medication therapy.
But cost-trend analysis by itself provides little insight into the ultimate causes of spending increases or the clinical characteristics of patients driving the rise in spending. And factors underlying the rise in treatment duration and intensity are not well understood across disease states.
We examined the changing clinical characteristics of Medicare patients that account for the rise in spending over the past twenty years, analyzing changes in the prevalence of treated disease, condition-specific spending, and sources of treatment in 1987, 1997, and 2006.
Much of the recent growth in spending among Medicare beneficiaries is attributable to rising spending on chronic conditions -specifically, diabetes and hypertension, both of which rose considerably in treated prevalence over the past two decades. Channels of spending for the most prevalent conditions have changed, too, with more spending for care provided in outpatient settings and for prescription drug therapy and less for inpatient care.
Our analysis did not disaggregate the component increases in spending that result from factors such as expanded treatment guidelines or innovative medical technology and therapies. Instead, we focused on changes in disease prevalence, changes in spending by disease, and changes in treatment locations as three important aspects of overall health outlays. Understanding these disease and care trends is critical to ensuring that health reform policy levers address the real drivers of current and anticipated health spending.