Insights66 Hero Chronic Disease

Confronting the burden of chronic disease

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 health care 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 health care spending is associated with treating these patients.

In addition to increased health care 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 health care spending and reduced workplace productivity.

The role of chronic disease in driving up health care 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 health care spending. Just twenty years later, 17 percent of adults were treated for five or more chronic conditions accounting for nearly half of total health care 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 health care spending. The direction these efforts should take is emerging.

  • We need more focused efforts to reduce the incidence of chronic diseases among children and adults. Fortunately, the recent addition of the diabetes prevention program as a Medicare covered benefit is a step in the right direction. The program identifies those who are at risk of developing diabetes and enrolls them into prevention programs, such as weight loss activities. It’s been shown to reduce the growth in type 2 diabetes and generates overall net savings in health care spending. Ideally this program would be expanded quickly into private health insurance and Medicaid benefits.
  • We must better coordinate care for patients with multiple and diverse chronic conditions, ensuring a patient-centered approach. Increasingly patients with type 2 diabetes, heart disease and a variety of behavioral disorders (depression, anxiety disorders) are becoming more common. Their health must be addressed holistically. 
  • Integrated, community-based health teams show some promise.  In states like Vermont the teams include nurses, nurse practitioners, public health, social workers, behavioral health specialists and increasingly, pharmacists. In Vermont the teams have integrated health care and social services to address the underlying needs of many seniors. Evaluations have shown that this approach generates a positive return on investment for Medicare. The community health team model is one that traditional Medicare should look at closely at its approach to care coordination continues to evolve.  
  • Greater collaboration between payers, providers and advocacy organizations is needed to help address obesity, which is an underlying condition for many chronic conditions, including diabetes, hypertension, stroke, depression and cancer. In 2014, according to CDC, an estimated 630,000 Americans were diagnosed with obesity-related cancer, and people who are overweight or obese are two times as likely to develop cancers of the esophagus, gastric, cardia, liver and kidney. While the nation as a whole has made little progress on reducing the obesity rate, there are programs across the nation that show great promise, including Exercise is Medicine from the American College of Sports Medicine and the American Medical Association, which encourages physicians to discuss and review physical activity at every patient visit.
  • A special focus is needed on integrated care coordination for older, lower income Americans. According to the Bipartisan Policy Center, Medicare-Medicaid beneficiaries have a higher prevalence of most chronic conditions than those who qualify only for Medicare, yet most of these individuals do not have integrated care. Oftentimes, patients face multiple sets of benefits and rules, making it difficult to navigate their care. In some cases, a Medicare-Medicaid beneficiary will enroll in up to five different managed care plans: one for Medicare medical services, one for Medicaid medical services, one for managed long-term services and supports (LTSS), one for behavioral health services, and one for dental services. About 400,000 individuals are enrolled in more than one limited benefit plan. The potential for harm to patients, confusion, inability to access care from the correct plans or providers is significant, and America’s most vulnerable individuals deserve better.
Thorpe Headshot
Kenneth E. Thorpe, Ph.D. Professor, Emory University Chairman, Partnership to Fight Chronic Disease

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