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Appendix E: Epidemiology of Serious Illness and High Utilization of Health Care
Pages 487-532

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From page 487...
... We synthesize and augment existing evidence regarding individuals with high health care costs and describe this group in terms of demographics, clinical characteristics, and patterns of health care use. Based on existing evidence, we focus on individuals with chronic conditions and functional limitations.
From page 488...
... A critical next step in research is to evaluate the impact of various interventions on reducing total health care costs so that programs and policies implemented across the health care system truly reduce total costs rather than merely shifting costs from payor to payor. CHARACTERIZING THE POPULATION WITH THE HIGHEST HEALTH CARE COSTS Distribution and Trends in Total Health Care Costs In 2011, the United States spent $2.7 trillion on health care, more than double what was spent in 2000 (CMS, 2014)
From page 489...
... data (AHRQ and HHS, 2011) , adjusted to include the nursing home population (National Center for Health Statistics, 2013)
From page 490...
... SOURCE: Total population and health care costs were obtained from the 2011 Medical Expenditure Panel Survey data (AHRQ and HHS, 2011) , adjusted to in Figure E-2 clude the nursing home population (National Center for Health Statistics, 2013)
From page 491...
... Chronic Conditions and Functional Limitations A substantial and growing body of work suggests that a key factor distinguishing individuals with the highest health care costs is the existence of both chronic conditions and functional limitations. Analyses of data on chronic conditions and health care costs have found that, of the population with the highest health care costs, greater than 75 percent have one or more of seven chronic conditions, including 42 percent with coronary artery disease, 30 percent with congestive heart failure, and 30 percent with diabetes (Emanuel, 2012)
From page 492...
... of total costs and made up 36 percent of the population. It is clear from these analyses that although the presence of chronic conditions is a key driver of health care costs, the addition of functional limitations appears to differentiate a high-cost group within those with chronic conditions.
From page 493...
... . The combination of chronic conditions and functional limitations may be associated with higher health care costs for many reasons.
From page 494...
... . Specifically, those with chronic conditions and functional limitations in both groups incur more than 20 percent of the nation's total annual health care expenditures (and together account for more than half of total spending)
From page 495...
... , adjusted to include the nursing home population (CMS, 2012, 2014; National Center for Health Statistics, 2013; Sing et al., 2006)
From page 496...
... SOURCE: 2011 Medical Expenditure Panel Survey data (AHRQ and HHS, 2011) , adjusted to include the nursing home E-6 Figure population (CMS, 2014; Jones et al., 2009; National Center for Health Statistics, 2013; Sing et al., 2006)
From page 497...
... OOP Private Medicare Medicaid Other White, NH 198,127 1,660 5,604 991,244 14.9 46.7 25.9 6.0 6.5 Black, NH 37,322 878 4,677 138,138 8.8 31.2 23.6 24.6 11.8 Hispanic 52,717 637 3,289 126,189 13.0 34.5 19.1 23.1 10.3 Asian/ 16,814 792 4,355 56,675 11.2 37.8 14.1 31.0 6.0 Hawaiian/PI, NH AI/AK Native/ 6,146 1,157 3,430 18,479 15.1 36.1 15.4 18.1 15.4 Multi, NH NOTES: This table does not include the nursing home population. AI = American Indian; AK = Alaska; NH = non-Hispanic; OOP = out of pocket; PI = Pacific Islander.
From page 498...
... NOTE: This figure does not include the nursing home population because data on this population for 2000 were not available. Figure E-7 SOURCE: 2011 Medical Expenditure Panel Survey data (AHRQ and HHS, 2011)
From page 499...
... Epidemiology of Chronic Conditions Overall, individuals aged 65 and older have a higher prevalence of chronic conditions and functional limitations (48 percent) compared with those younger than 65 (9 percent)
From page 500...
... NOTES: This table does not include the nursing home population. CHD = coronary heart disease; COPD = chronic obstructive pulmonary disease.
From page 501...
... Further, given estimates that nearly all nursing home residents have at least one chronic condition and require assistance with one or more ADLs (Hing, 1989) , we categorized the entire nursing home resident population as having both chronic conditions and functional limitations in this appendix.
From page 502...
... , out of pocket (18 percent, primarily for nursing home care) , and other sources (including private payers)
From page 503...
... , with adjustments based on estimates from Sing and colleagues (2006) and the 2011 Medical Expenditure Panel Survey data (AHRQ and HHS, 2011)
From page 504...
... For example, based upon data from the Medicare FFS population within the nationally representative HRS cohort adjusted to 2011 dollars, we find that while mean Medicare spending in the last year of life is $50,576 (median $37,152) , 25 percent of beneficiaries incur $15,895 or less in Medicare spending in the final year of $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 1978 1988 1997 2006 T erminal Y ear Non-T erminal Y ear FIGURE E-11 Average per person spending on health care among decedents, 1978-2006.
From page 505...
... As Medicare spending accounts for approximately 60 percent of total health care spending (Hogan et al., 2001) , we estimate that mean total health care spending in the last year of life is $82,911 (median $60,904)
From page 506...
... Demographic Characteristics Medicare expenditures in the last year of life decrease with age, especially for those aged 85 or older (see Figure E-14)
From page 507...
... Bitmapped 16 White Black Hispanic 14 Other 13.9 Average Medicare Expenditure, × $1000 12 11.1 11.3 10 8.9 8 6 6.0 5.2 4.8 4.0 4 3.5 3.7 3.1 3.1 2.6 2.7 2.4 2.5 2.2 2 1.9 2.1 1.8 1.7 2.1 2.0 1.4 0 6 5 4 3 2 1 Number of Months Before Death FIGURE E-15  Medicare spending in the last 6 months of life by race and ethnicity. SOURCE: Hanchate et al., 2009.
From page 508...
... of People % Care Costs % Age: 65 or older, FFS Medicare         beneficiaries No chronic conditions or 15,484 1 $39,771,569 0 functional limitations Chronic conditions only 411,774 28 28,271,965,777 23 Functional limitations only 20,323 1 613,233,917 0.5 Chronic conditions and 1,037,419 70 94,197,646,891 77 functional limitations NOTES: Functional limitation defined as needing help with any activities of daily living. Medicare costs represent on average 61 percent of total health care costs (Hogan et al., 2001)
From page 509...
... Adjusted for age, race, ethnicity, education, net worth, Medicaid, Medigap, nursing home residence, relative nearby, religiosity, Self Reported Health, three other chronic conditions, advance directive, regional hospital beds, and local pattern of end-of-life spending (Kelley et al., 2011)
From page 510...
... A study of the association between treatment-limiting advance directives and Medicare costs revealed a significant correlation with lower costs, but only within regions with patterns of high end-of-life health care spending (p = 0.04) (Nicholas et al., 2011)
From page 511...
... This method also fails to assess and adjust for many of the other patient factors, such as function, that are known to be associated with spending. A recent examination of determinants of Medicare expenditures in the last 6 months of life aimed to consider simultaneously the influence of patients' social, medical, and functional characteristics while also adjusting for regional practice patterns and sup
From page 512...
... In addition, after controlling for an extensive group of personal and health characteristics, regional factors continued to be significantly associated with Medicare costs. For example, a person in a region within the second quintile of practice pattern intensity, as measured by Dartmouth's End-of-Life Expenditure Index, incurs 10 percent more Medicare expenditures in the last 6 months of life than a person in a region within the lowest quintile, holding all other characteristics equal.
From page 513...
... ; • individuals who persistently generate high annual health care costs due to chronic conditions, functional limitations, or other condi tions who are not in their last year of life and who live for many
From page 514...
... NOTE: The entire nursing home population is estimated to be in the top 5 percent of total health care spending (see E-17 Figure the earlier section on the nursing home population for details)
From page 515...
... NOTES: The entire nursing home population is estimated to be in the top 5 percent Figure E-18 of total health care spending (see the earlier section on the nursing home population Bitmapped -- new key for details)
From page 516...
... This subgroup is most likely characterized by the chronic conditions and functional limitations described earlier. Evidence suggests that this population tends to be older.
From page 517...
... Finally, as described earlier, we have made a number of assumptions regarding health care expenditures for nursing home residents given a lack of detailed data on this population. Further, our cost analyses do not include estimates for costs such as informal caregiving and lost wages.
From page 518...
... • The population with both chronic conditions and functional limi tations is a key driver of high health care costs. The addition of functional limitations appears to differentiate a high-cost group within those with chronic conditions and may characterize those who are persistently in the high-cost group.
From page 519...
... Models That Currently Work to Align Patient Goals with Treatment and Lower Costs Palliative care A recent study examined the effect on hospital costs of palliative care team consultations for patients enrolled in Medicaid at four New York State hospitals and found that, on average, patients who received palliative care incurred $6,900 less in hospital costs during a given admission than a matched group of patients who received usual care. These reductions included $4,098 in hospital costs per admission for patients discharged alive and $7,563 for patients who died in the hospital.
From page 520...
... Hospice disenrollees incurred higher $7,000 $6,430 $6,000 Hospice Enrollment $5,040 $5,000 Range 53-105 Days $4,000 15-30 Days $3,000 $2,650 8-14 Days $2,561 1-7 Days $2,000 $1,000 $0 Total Medicare Savings FIGURE E-20  Incremental effect of hospice enrollment on Medicare costs. SOURCE: A version of this figure appears in Kelley et al., 2013.
From page 521...
... In addition, interventions focused only on those near death will have limited opportunity to impact costs given the limited time span following intervention. Identifying patients with serious illness -- that is, functional limitations and progressive chronic disease or organ failure --
From page 522...
... . PACE is a long-term care delivery and financing program designed to provide comprehensive community-based care and prevent unnecessary use of hospital and nursing home care (Eng et al., 1997)
From page 523...
... Although the acute hospital is the standard venue for providing acute medical care for serious illness, it is expensive and may be hazardous for vulnerable older persons, who commonly experience functional decline, iatrogenic illness, and other adverse events during hospital admissions. Providing acute hospital-level care in a patient's home for carefully selected patients via Hospital at Home has been shown to improve patient safety, enhance quality, increase efficiency, reduce variations in practice, and reduce the costs of providing acute care for medical illness for Medicare beneficiaries (Frick et al., 2009; Leff et al., 2005, 2006)
From page 524...
... ($bil) Age 65 or older with 22,092,740 $543 A 50 10 $27 chronic conditions and B 50  5 14 functional limitations   All individuals with 44,946,847 $909 A 50 10 45 chronic conditions and B 50  5 23 functional limitations   Individuals at the end  2,468,435 $200 A 50 10 10 of life B 50  5  5 *
From page 525...
... In addition, given the complexity of identifying individuals in their last year of life relative to identifying individuals with chronic conditions and functional limitations, it is likely that an end-of-life intervention may have an even smaller effect on costs than shown in the table because it would likely impact less than 50 percent of the terminal population. Standardized Identification of Seriously Ill and Potentially High-Cost Patients Add a flag to administrative data to identify functional debility  Administrative datasets, including Medicare, Medicaid, and private insurer claims, are key sources of data for health services research and for identifying individuals who may benefit from tailored services.
From page 526...
... Although such studies are informative, the focus on Medicare costs alone has led to the misperception that older adults and those at the end of life are the primary drivers of health care costs, and yet when one evaluates total health care costs, it is fairly clear that this is not the case. A critical next step in research is to evaluate the impact of various interventions on reducing total health care costs so that programs and policies implemented across the health care system truly reduce total costs rather than merely shift costs from payor to payor.
From page 527...
... 2011. Medical Expenditure Panel Survey.
From page 528...
... 2014. HHS initiative on multiple chronic conditions.
From page 529...
... 2010. Individuals living in the community with chronic conditions and functional limitations: A closer look.
From page 530...
... 2013. Prevalence of multiple chronic conditions among US adults: Estimates from the National Health Interview Survey, 2010.
From page 531...
... 2003. Comorbidity and the concentration of health care expenditures in older patients with heart failure.


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