Older, sicker patients to strain Medicare

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Good news: Americans are living longer, with U.S. life expectancy at 78.5 years, according to the Centers for Disease Control and Prevention. Bad news: They're also getting sicker, facing more chronic illnesses. That mix means increased patient acuity and more utilization of healthcare services--a recipe for higher Medicare costs.

According to the U.S. Census Bureau's projections released yesterday, the population of seniors (age 65 and older) will more than double between 2012 and 2060 from 43.1 million to 92.0 million. Elders will make up more than one in five U.S. residents, up from one in seven today. And the oldest of the old also will rise; the Census Bureau predicts the population of those age 85 and older will more than triple from 5.9 million to 18.2 million, reaching 4.3 percent of the total population.

The rising aging population will affect healthcare utilization. An American Hospital Association (AHA) report released Tuesday revealed that health problems aren't in the distant future. AHA found chronic disease is rising in the Medicare population, as well as obesity and complex conditions, such as end-stage renal disease.

"If you put all of our payers together--Medicare, plus private payers and Medicaid, mortality, risk and severity of disease is up across all DRGs … which means we're seeing sicker patients," Charles O'Brien, Sanford USD Medical Center President in Sioux Falls, S.D., said in the AHA report.

The Centers for Medicare & Medicaid Services in 2008 introduced MS-DRGs (Medicare Severity-adjusted Diagnosis-Related Groups) to account for complications and comorbidity when determining inpatient payments for admissions. CMS also lowered payments to adjust for case mix, but skeptics challenged the changes.

"Policy makers should carefully consider the trends of increasing acuity in the Medicare patient population as they seek changes to payment policy," AHA said.

Overall spending for a person with one chronic condition is three times higher than someone without, and 17 times higher for someone who has five or more chronic conditions. In a separate study, America's Health Rankings listed Mississippi, Louisiana, Arkansas, West Virginia and South Carolina as the unhealthiest states, and Vermont, Hawaii, New Hampshire, Massachusetts and Minnesota as the healthiest.

In addition to acuity, higher costs also stem from increased technology.

"Medical and technological advances improve outcomes, but they also raise costs," the AHA report stated. For instance, technology such as cardiac catheterizations, coronary artery bypasses and angioplasties with stents have contributed to a 70 percent improvement rate in heart attack survival, but the average inpatient Medicare spending per heart attack case jumped from $10,336 in 1999 to $14,009 in 2006.

Medicare now covers 48 million people, but at this rate, Medicare beneficiaries will more than double over the next 40 years.

For more information:
- here's the CDC stats
- check out the AHA report (.pdf)
- here's the Census statement and summary of data
- see America's Health Rankings' map

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