A new paper from Kenneth E. Thorpe, PhD, "Spending Across Key Chronic Health Care Conditions Among Privately Insured Adults, 2000-2015," examines trends in spending on chronic disease among the privately insured.
Chronic diseases are the leading source of illness and death in the United States and increasingly around the world. They are also a key driver of rising healthcare spending. In fact, according to the Medical Expenditure Panel Survey, about two-thirds of adults have one or more chronic health conditions and 86 percent of healthcare spending is associated with treating these patients.
In addition to increased healthcare spending, chronic disease is responsible for reduced workplace productivity and lower family incomes. The Partnership to Fight Chronic Disease has estimated that chronic diseases accounted for approximately $800 billion in lost productivity in 2016. This trend is expected to continue: Between 2016 and 2030, chronic illness will be associated with $42 trillion in higher healthcare spending and reduced workplace productivity.
The role of chronic disease in driving up healthcare spending is particularly pronounced in Medicare. Since 2008, the growth in chronic disease accounted for more than 60 percent of the growth in Medicare spending per beneficiary. An even greater share of the increase in Medicaid spending per beneficiary is linked to rising rates of chronic disease.
Over time chronically ill adults have become more clinically complicated. Among all adults in 1996, 8 percent were treated for five or more chronic conditions accounting for 29 percent of healthcare spending. Just twenty years later, 17 percent of adults were treated for five or more chronic conditions accounting for nearly half of total healthcare spending.
The trends and numbers are even more telling for the Medicare program. In 1996, more than a quarter of Medicare beneficiaries were treated for five or more chronic conditions, accounting for more than half of spending. However, by 2015 more than 62 percent of Medicare beneficiaries were treated for five or more chronic conditions, accounting for an astonishing 85 percent of expenditures.
Underlying these trends is the persistent rise in obesity among children and adults. As recently as 1988, about 15 percent of adults were obese. Today, that figure is 40 percent. These trends are critical to the chronic disease story since obesity is associated with increasing the risk for several chronic health conditions including Type 2 diabetes, hypertension, heart, lung and blood diseases, among others.
These trends have important implications for health policy reforms that seek to improve patient outcomes and slow the growth in healthcare spending. The direction these efforts should take is emerging.