This Isn't Medicare!
Ron Leopold, MD, MBA, MPH
High-Cost Medical & Rx Claims Consulting for Employers / Brokers
Do You Know What Medical Conditions Drive Employers’ Health Care Spend?
The member population covered in an employer’s self-funded health plan is very different than a population of Medicare enrollees.
But the ready availability of Medicare data offers researchers and sources that cite research a unique opportunity to get solid numbers around medical condition. Incidence of disease, prevalence of a condition and annual cost burden of disease can be readily calculated from downloadable files from Centers for Medicare & Medicaid Services (www.cms.gov ).
These data provide invaluable insight but largely reflect a population of Americans age 65 and older. That’s a very different demographic from a population of working-age adults and their families. It is important to recognize that the demographics of two populations drive very different cost profiles.
Older Adults are generally much more expensive than a member population covered in an employer’s health plan.
Consider the following:
Per capita lifetime health care expenditure for an average American is $316,600. Nearly half of that lifetime medical expenditures is incurred after age 65. (1) (2)
14.5% of the U.S. population is over 65 years of age. That population spends 43% of medical costs in the United States. (1) (2)
Working-Age Adults (19-64): Per capita spending for working-age adult females in 2014 ($7,962) was 26 percent High than male per capita spending ($6,334).
Older Adults (65 and older) : On a per capita basis, spending on females 65 and over in 2014 ($19,700) was 7 percent more than spending for males ($18,331), due in part to nursing care facilities and continuing care retirement communities and home health care spending for females being about twice that of males of the same cohort. (3)
In fact, the following visual shows that two age groups (65+ and 0-18yo) have a disproportionately higher spend. (4)
Chronic Disease is Much More Prevalent, and More Costly in a Medicare Population
A frequent stat quoted in the industry is: “Chronic illnesses account for 75% of the $2.2 trillion we spend on health care each year in the U.S.” (5) But this can be highly misleading. The self-insured employer decision maker deals with a population of working age adults and children.
Comparing prevalence of chronic conditions between a Medicare population (over 65 yo) and a working age adult population (18-64 yo) with private insurance reveals very different prevalence numbers. (6)
Understanding what drives medical costs
Analysis of data from a seminal study that estimated US spending on health care according to 3 types of payers (public insurance [including Medicare, Medicaid, and other government programs], private insurance, or out-of-pocket payments) and by health condition, age group, sex, and type of care for 1996 through 2016 was used to identify the three disease groupings in the following tables.
The following three tables compares two cohorts in the U.S. Population:
People under 65 years of age
People?> 65 years of age
Key Takeaways:
1.????Understand that morbidity and medical cost drivers are very different in the self-insured employer marketplace and that Medicare data usually gives a skewed picture of incidence, prevalence, and cost of medical conditions.
2.????The toll of chronic conditions on this marketplace is often exaggerated by using Medicare data that distorts the prevalence of chronic conditions in this population.
3.????Although it’s harder to get data for this marketplace, your credibility will be greatly enhanced if you’re information resonates with what the buyer and decision-maker knows is true for their covered population.
Sources
1)???The Lifetime Distribution of Health Care Costs; Berhanu Alemayehu and Kenneth E Warner ; Health Serv Res . 2004 Jun; 39(3): 627–642.
2)???The Concentration of Health Care Expenditures and Related Expenses for Costly Medical Conditions, 2012; Steven B. Cohen, PhD; AHRQ; Statistical Brief # 455; October 2014
5)???https://www.cdc.gov/chronicdisease/about/costs/index.htm
"Helping you connect the dots on work and well-being...."
2 年And the comparison of high prevalence / high cost conditions for young (64 & under) versus old (65+) tracks remarkably well with my own "young Fred" versus "old Fred" trajectory-- well, except for the pregnancy stuff ;-) And PS: In your second graphic, you've got 0 - 64 under the heading Medicare population. I know you didn't mean that (the curse of cut and paste, right? been there, done that)
"Helping you connect the dots on work and well-being...."
2 年I'm flabbergasted to read that employers with self-funded health plans are benchmarking against Medicare data.
Great information. This highlights the importance of making sure self funded employers have data sources for their population that can be benchmarks against comparable populations so rhat the employers population can be managed properly.