National Health Spending by Condition

By January 9, 2017Commentary

Research in the Journal of the American Medical Association takes a variety of data sources to analyze health spending from 1996 through 2013.  (JAMA Article)   The researchers first created six basic categories of care–inpatient care, ambulatory care, ER care, nursing facility care, dental care and prescription drugs.  These categories accounted for around 85% of personal health spending.  Other categories not analyzed included, OTC drugs at 6.6%, medical equipment and devices at 5.1% and home health care at 3.5%.   Spending on the six primary categories was then decomposed across 155 health conditions and further stratified these by age and sex groups.  Across all conditions the annualized rate of spending change from 1996 to 2013 was 3.5%.  In 2013, on an aggregated condition basis, cardiovascular diseases accounted for the largest dollar amount of spending, $231 billion, but the annualized rate of change over the study period was only 1.2%, reflecting success in controlling the worst manifestations of these diseases.  About 57% of this spending went to inpatient care and 65% of the spending was for patients age 65 or older.

Other costly aggregated conditions included diabetes and endocrine diseases at $224.5 billion, 31% of which went to drugs; behavioral and substance abuse treatment at $188 billion, musculoskeletal issues at $183.5 billion, well care at $155.5 billion and treatment of risk factors (high blood pressure, smoking, high cholesterol, etc.) $141 billion, of which 54% is for drugs.  The fastest growing conditions over the study period were treatment of risk factors at 6.6%, musculoskeletal issues at 5.4%, diabetes and endocrine at 5.1%, cirrhosis at 5.1% and neurological disorders at 4%.  Neurological, which includes dementias, had about 60% of its spending on those 65 or older.  On an individual condition basis, the top 20 conditions accounted for about 58% of all spending in 2013.  Diabetes was the top individual condition, with over $100 billion of spending in that year, of which about 58% was for drugs.  Ischemic heart disease was the second biggest single condition, at $88 billion in 2013, with 56% being for inpatient care.  That spending did not include treatment of risk factors for the disease, like hypertension and high lipid levels, which added $84 billion in spending for treating high blood pressure and $52 billion for lowering cholesterol.  Most of this spending was presumably on drugs.  Low back and neck pain was the third largest spending  category at $88 billion.

Across the conditions, inpatient care and ambulatory care each represented over 33% of total spending.  Annualized growth over the study period was highest for ER care, 6.4% and drugs, 5.6%.  Some conditions with very high growth rates, and also significant spending, included hyperlipidemia, back and neck pain and septicemia.  Conditions with the largest absolute rise in spending included diabetes, hypertension, high lipids, depression, and back and neck pain.  In addition, the researchers looked at public health spending to the extent it could be assigned to certain health conditions.  HIV had the most public health spending in 2013, at $3.5 billion, followed by lower respiratory tract infections and diarrheal diseases.  This piece of research provides another guide to spending control and care management efforts, giving a sense of what diseases have high absolute spending and/or high growth rates and what modalities are being used to treat those expensive conditions.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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