July 08, 2013
A recent study conducted by IMPAQ International, a premier research, evaluation, and technical assistance firm, revealed that chronic conditions have a dramatic impact on Medicare spending.
According to the study, beneficiaries with two or more chronic conditions account for 86 percent of total Part A payments and 70 percent of total Part B payments, respectively, although they comprise only 36 percent of Part A, and 41 percent of Part B enrollment.
Titled “Medicare Payments: How Much do Chronic Conditions Matter?” and published in the most recent issue of the Medicare & Medicaid Research Review, the objective of the study was to analyze differences in Medicare Fee-for-Service utilization (i.e., program payments) by beneficiary characteristics, such as gender, age, and prevalence of chronic conditions.
“Using the 2008 and 2010 Chronic Conditions Public Use Files, we conducted a descriptive analysis of enrollment and program payments by gender, age categories, and eleven chronic conditions,” said Dr. Erkan Erdem, Senior Research Associate with IMPAQ’s Health division. “What we found was that average Medicare spending is higher by a factor of 5.4 in Part A and 2.35 in Part B for beneficiaries with exactly one chronic condition compared to beneficiaries without any chronic conditions,” he added.
Dr. Erdem noted the study also showed that stroke/transient ischemic attack (TIA) and chronic kidney disease (CKD) are the costliest chronic conditions for Part A payments, while cancer and CKD are the costliest for Part B payments.
According to the research, average Part A payments for enrollees with “stroke/TIA” were about 12.8 times higher than enrollees without this chronic condition in 2010. Average Part B payments for enrollees with cancer were approximately 5 times higher than enrollees without any chronic conditions in 2010.
“The impact of chronic conditions on rising healthcare costs is a widely recognized, albeit complex, issue. Our study does not claim to offer a solution to the problem, but we wanted to quantify how much various chronic conditions increase average Medicare payments,” said Dr. Erdem. “We hope our findings can help policymakers prioritize their efforts to reduce healthcare costs by focusing on the health conditions that matter the most.”
The full study can be found here.
About IMPAQ International
IMPAQ International is a public policy research firm specializing in designing and implementing rigorous research studies and evaluations of government programs and demonstrations. IMPAQ’s mission is to provide exemplary research and consulting services to its domestic and international clients through the use of impact evaluation studies, applied research, policy analysis, quantitative and qualitative data analysis, and technical assistance.
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