Link seen between chronic conditions and Medicare spending

NEWS IN BRIEF — Posted July 1, 2013

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New research has quantified the effect of chronic illnesses on Medicare finances by showing significant spending increases for patients with conditions such as stroke, cancer and kidney disease.

About 40% of patients with physician and other outpatient coverage under Medicare had two or more chronic conditions in 2008 and 2010, a June article in Medicare & Medicaid Research Review reported. These beneficiaries accounted for 70% of total Part B payments in both years. The analysis shows that overall spending rose more than 10% from 2008 to 2010 as average costs also increased.

“The rest of the increase in total Medicare Part B payments is due to the increase in enrollment,” the authors wrote. “Interestingly, the increase in average Part B payments between 2008 and 2010 is consistently high — in the 8.3% to 9.8% range — even for those without any chronic conditions.”

The authors stated that their research adds to other work showing a strong link between costs and patients with multiple chronic diseases. For example, the number of Part B enrollees with three chronic conditions increased between 2008 and 2010 by about 45,000 patients, or 1.7%, to 2.7 million beneficiaries. Average Part B payments for those patients was $6,655 in 2010. Beneficiaries with six chronic conditions totaled more than 275,000, and the cost per patient was $14,730 in 2010.

The lead author of the article is Erkan Erdem, PhD, a senior research associate with the firm IMPAQ International in Washington. The article is available at a Centers for Medicare & Medicaid Services website (link).

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