Healthcare Analytics, Population Health Management, Healthcare Big Data

Population Health News

Chronic Disease Management Costs 17 Times More than Average

By Jennifer Bresnick

- The most expensive patients with the highest service utilization rates, including those who need chronic disease management services for multiple conditions, cost approximately 17 times more than patients who are not considered “high users” of the healthcare system, says a study published this week in the American Journal of Managed Care.  The top three percent of patients categorized as persistent high users accounted for 21 percent of total annual healthcare expenditure for a typical large business in Pennsylvania.

Chronic disease management and healthcare spending

“A small percentage of patients are responsible for the majority of healthcare spending in the United States,” the study explains. “This trend has remained extremely stable over the years, with only slight fluctuations in the amount of healthcare spending attributable to the top users. Between 1970 and 1996, approximately 66 percent to 72 percent of annual healthcare costs were attributable to the top 10 percent of healthcare users.” 

As value-based reimbursement and patient-centered care models strain to improve outcomes and reduce costs by investing in preventative care and more comprehensive chronic disease management, the ability to stratify patients by their risk, disease state, and spending habits is becoming vitally important for healthcare providers.

Researchers examined private payer insurance claims from 2008 to 2011 related to the 30,000 employees and their dependents, the majority of whom lived in urbanized areas.  Persistent high users incurred annual expenses of more than $38,000 compared to just $2201 for patients who never crossed the “high use” threshold.  While some patients experiencing acute issues or hospitalizations temporarily incurred high expenses, patients experiencing a higher burden of sustained chronic conditions were significantly more likely to be frequent users of healthcare services.

Chronic high users, including those with multiple long-term conditions, spend 13 times more on outpatient services, 11 times more on professional services, and 17 times more on medications.  High users were also five times more likely to visit the emergency department for a potentially preventable visit, indicating insufficient daily chronic disease management for the most commonly occurring conditions: hypertension, diabetes, and respiratory illnesses like COPD.  Persistent high users were also likely to be experiencing renal disease, congestive heart failure, and neuromuscular disorders. 

“Most strikingly, persistent high users spent nearly 200 times more on inpatient services than did never high users,” the authors add.  “Persistent high users saw a medical specialist an average of 14.5 times per year, compared with 0.3 medical specialist visits per year for never high users. The average annual utilization of inpatient services, primary care visits, and surgical specialty visits was 0.8, 5.2, and 2.9 visits per year, respectively, for persistent high users.”

By using predictive analytics, the researchers hope to refine their ability to forecast if a patient was likely to be a persistent high user in future years rather than a temporary big spender.  “The positive predictive value of the best model was close to 20%, indicating that only 1 in 5 patients identified as persistent high users will actually fall in the high persistence group,” they explain. “Whether any other classifier may be able to improve on this baseline positive predictive value is an open question. Total expenditure may be a main determinant of future persistence, or a strong surrogate for its underlying drivers.”

The study highlights an opportunity for healthcare organizations to be more proactive about chronic disease management for patients with multiple conditions.  Through patient-centered care programs that provide education, care coordination, supportive resources, and regular preventative contact with the healthcare system, providers may be able to reduce the frequency of at least some of the spending, such as unnecessary ED visits or preventable hospital admissions. 

Providers may be better incented to provide these services under a value-based reimbursement structure, the study concludes, even if the short-term impact on spending is indirect.  “While these benefit designs may not always result in immediate cost savings, they often show an improvement in outcomes for the patients enrolled. This may be an effective way to address the needs of patients with persistent high utilization and costs, with the potential for cost savings in the long term.”

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