Study identifies persistently high-cost Medicare patient trends

Stethoscope and calculator over graph
A new study identifies persistently high-cost patient populations within Medicare. (seksan mongkhonkhamsao/Getty Images)
Jose Figueroa, M.D. M.P.H.
(Brigham and Women's Hospital)

Persistently high-cost Medicare patients tend to be younger, members of racial or ethnic minority groups, dual-eligible Medicaid patients or suffering from end-stage renal disease (ESRD), a new study reports.

Medicare patients in the top 10% of spending each year accounted for almost 20% of Medicare’s overall spending during the three-year period covered by the study, published in the January issue of Health Affairs.

That makes them a prime target for policy initiatives aimed at reducing costs in the system, provided policymakers can get a handle on the causes for the high rate of spending.

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For the most part, the subgroups identified weren’t surprising, according to the study’s lead author, Jose Figueroa, M.D., M.P.H., an instructor of medicine at Harvard Medical School and an associate physician in the Department of Medicine at Brigham and Women’s Hospital in Boston.

For example, the fact that younger, disabled individuals cost more makes intuitive sense.

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“If a disabled person has a chronic issue that is a more persistent need, and you can imagine they’ll require a lot of services as long as they remain alive. So, for example, [there are] people that need a lot of specialty care, and we see that they’re using four times as much outpatient care than other people,” Figueroa said.

The researchers believe developing policy solutions will generally require some creativity, however, because the study found that very few of the expenses required to care for persistently high-cost patients could have been prevented with alternative care options. High drug costs also contributed to the cost of treatment in these subgroups, particularly antiviral drugs and immunological agents.

“We found that relative to overall spending, that proportion of spending is actually very little, so potentially we shouldn’t focus so much on reducing preventable acute-care use as the only strategy to reduce costs,” Figueroa said.

There are "very few strategies that could reduce spending related to drugs aside from maybe switching to a generic drug if it’s available for a particular patient where it’s appropriate and it wouldn’t necessarily compromise their treatment plan,” he added.

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For ESRD patients, potential adjustments are more straightforward. Dialysis drives a lot of the cost in these cases, so Dr. Figueroa suggests looking at solutions such as home dialysis as a way of potentially curbing costs there.

Reducing the cost of care among ethnic and racial minority groups may provide fertile ground for more mainstream policy solutions, but targeting those populations will require more investigation to determine why they remain high-cost.

Racial and ethnic minorities are much more likely to be affected by social determinants of health than members of the general white population, Figueroa said, pointing to potential factors such as inadequate housing, limited access to healthy foods or limited options for transportation to care providers. He also cites literature indicating black and Hispanic patients are less likely to undergo certain types of surgeries when indicated, or less likely to see primary care doctors, which could lead to subsequent, expensive acute-care use.