Every analysis shows that a remarkably small percent of the population accounts for a very large proportion of spending. Seems like managing the care and health of these people intensively would be a good thing to do. Medicare incurs high expenditures for one segment of this group: the dual eligibles; and has struggled with coordinating with the Medicaid programs covering the same individuals. New initiatives are underway and a Kaiser Family Foundation Report explores both the population and Medicare strategies for dealing with the cost issues. (KFF Report) There are nine million of these people, most over 65, but a number in the disabled category under that age. They are 20% of Medicare enrollment but 31% of spending and 15% of Medicaid beneficiaries but 39% of its spending. Per capita Medicare spending on these people is 1.8 times higher, with total spending of $132 billion in 2008.
Medicare is the primary payer for this group but Medicaid covers much of the deductibles and copays and covers services Medicare does not, like long-term care. While their costs are an issue for Medicare, they are the primary reason Medicaid programs are killing state budgets. These people have high rates of chronic conditions; they tend to be in poor health, largely due to poor health behaviors such as smoking, drinking, poor diet and little exercise. Many of them, almost one-seventh, are living in a long-term care facility. Both the federal Medicare program and the state Medicaid offices recognize the need to have a coordinated approach to improve care and reduce costs and there are initiatives under way. But perhaps the simplest thing to do is enroll all these people in Medicare Advantage and Medicaid managed care programs. These programs have shown that they can do an excellent job of capping spending while usually improving patient outcomes.