Medicare Patients' Multiple Health Problems Drive Up Costs

Treatment of chronic conditions and obesity among Medicare beneficiaries are the two greatest factors driving much of today's increased Medicare spending, according to research published in an Aug. 22 Health Affairs Web exclusive.

The study, "The Rise in Spending Among Medicare Beneficiaries: The Role of Chronic Disease Prevalence and Changes in Treatment Intensity," found the number of Medicare beneficiaries who are obese has nearly doubled since 1987. That increase has played a major role in the growing prevalence of comorbidities that require medical treatment, further boosting Medicare expenditures per patient.

Change the payment system for chronic disease management and enable physicians to rein in obesity through medical oversight of lifestyle changes, and the increases in Medicare spending could mediate, the study's authors said.

"Efforts to control the growth in Medicare spending using lifestyle modification strategies and care coordination will require changes in the way Medicare pays for services and interacts with providers," wrote researchers Kenneth Thorpe, Ph.D., chair of the department of health policy and management at the Rollins School of Public Health at Emory University, Atlanta, and David Howard, Ph.D., an assistant professor in the school's health policy and management department.

Obesity, the study indicated, contributes to the growing number of patients with multiple conditions -- such as hypertension, diabetes, or hyperlipidemia -- that require treatment. Moreover, Medicare's 2002 expenditure data show the greatest increase in spending stems from care of patients with three or more chronic conditions.

"Virtually all of the spending growth since 1987 can be traced to patients treated for five or more conditions," the authors wrote. "And in 2002, 92.9 percent of health care spending was incurred by beneficiaries with three or more conditions during the year. What accounts for these trends? Clearly, increases in obesity levels play a role. Many obese people have multiple morbidities such as hyperlipidemia, diabetes and hypertension."

The percentage of Medicare beneficiaries who are obese increased from 11.7 percent in 1987 to 22.5 percent in 2002, according to the study. At the same time, the percentage of spending incurred by beneficiaries who are obese almost tripled -- from 9.4 percent to nearly 25 percent of total spending.

"Thus, a rise in the share of obese Medicare beneficiaries combined with a higher share treated for five or more conditions over time accounts for about 15 percentage points of the rise in spending," the authors wrote.

Another likely factor in higher Medicare expenditures is physicians' more aggressive treatment of chronic conditions in all patients, the authors wrote. Such aggressive treatment improves patients' overall health but adds to growing Medicare expenditures because of the current fee-for-service system.

The study authors documented the trend by measuring patients' self-reports of health status. They found that 33 percent of patients treated for five or more conditions in 1987 reported being in excellent or good health. By 2002, nearly 60 percent of Medicare beneficiaries treated for five or more conditions reported good or excellent health.

"Thus, either treatment is diffusing to healthier patients, treatments are improving health outcomes or both are occurring," the authors wrote. "Physicians might also be more aggressively treating Medicare beneficiaries for asymptomatic or mildly symptomatic conditions over time."