High Cost Patients

We have noted several times that a few patients tend to be responsible for a significant fraction of all health spending.  An article in the New England Journal of Medicine looks at this phenomenon by payer type, which some further information on this class of patients.   (NEJM Article)   The data comes solely from Partners HealthCare in Massachusetts, which is a large multipayer system, but probably somewhat representative of the country as a whole.  Looking at the top 1% of patients in annual 2014 spending, for Medicare the average was $146,584, for Medicaid it was $85,347 and for commercial patients it was $101,359.  In Medicare, this 1% accounted for 14% of all spending, in Medicaid for 17% and in commercial plans, for 22%.  As expected, chronic conditions likely have a lot to do with their costs–the Medicare subset has 8 chronic conditions on average, the Medicaid one 5 and for commercial high cost patients, 4.5.  The most common conditions for Medicare are hypertension, chronic kidney disease, and heart disease of some type.  For Medicaid they are mental illnesses by far, hypertension and respiratory conditions.  In commercial plans the common diagnoses are hypertension, chronic kidney disease, arthritis, depression and high lipids, but traumatic injuries also played a role.

Different characteristics of these high cost patients in various payers imply a need for whoever is at financial risk for their care–the health plan, a public payer, an ACO or other at-risk provider–to be prepared to manage that care differently.  In Medicare, attention needs to be paid to post-acute care and heart disease.  Because of their age, these high cost patients are likely in more serious, even terminal aspects of their disease, so end-of-life care is likely a focus.  For Medicaid, mental health care must be a focus and it must be integrated with other care.  It is also probably more important for this patient set to attend to general life issues–living situation, employment, friends and family.  A social worker may be an important part of the care team.  In commercial plans, the high cost patient may be earlier in their disease states, but having occasional, costly acute episodes.  Adherence to treatments that minimize disease progression is likely key.

And of course, as important as the implications of these known high cost patients are, more important is figuring out how to identify them in real-time early on in an episode or the relevant time period.  And we know from other research that the persistence of these patients can be low; high-cost in one year likely doesn’t mean high-cost in the next.  That also has effects on the economic value of care management.