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Characteristics of Persons with High Health Spending

By November 22, 2016Commentary

As we saw in our previous note on the concentration of health spending, a small percent of the population accounts for most spending.  So what are some of the characteristics of these high-cost population members?  Another Statistical Brief from the Agency for Healthcare Quality & Research addresses this issue.  (AHRQ Brief)  Unfortunately, the brief focuses solely on age, insurance status and number of chronic conditions, but even from these we see interesting revelations.   It is a truism that as people get older, they have more health needs and the MEPS data reflects that.  Using a tiering of no spending (15% of population), and low (less than $912, 35% of people) middle (between $913 and $11,100; 40% of population) and high (over $11,100; 10% of population) spending, people aged over 45 are more likely to be in the middle and high tiers.  In the no and low spending group, 75% of people are under age 45; while 75% of people in the high expense category are over 45.  Those over 65 are only 10% of the no and low spending tier, but 40% of the high expense one.

Working aged adults with private insurance were 80% of middle tier spenders and only 50% of the no-expense category.  Over-65s with only Medicare coverage were more likely to be in a lower category than those with Medicare and some other coverage.  The uninsured of any age were much more likely to be in the no or low spending groups, but as we have noted many times, this may not be a reflection on access to care issues but a perception of people with few health care needs that they don’t need insurance.  In regard to medical conditions, 14 were considered, several of which related to cardiovascular disease, as well as such standards as asthma, diabetes, arthritis and cancer.  If an adult over age 18 with two or more of these conditions comprised 74% of the high expense category and 51.5% of the middle category.  Only 7.5% of these people were in the no spending category.  75% of those in the no spending group had none of the 14 conditions.  In the high-spending group, expenses were heavily influenced by inpatient hospital costs.  One piece of guidance from this brief is that even among people with chronic conditions, spending is only likely to get really high when the person has an acute exacerbation that requires hospitalization or, in the last couple of years, when they require treatment with very expensive specialty drugs.

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