Like most things related to humans, health spending has a pretty wide range. As we have often noted before, a relatively small percentage of the population accounts for a very large percentage of total health spending. Managing the care of these high-spending patients could bring significant cost control rewards. But a high-spender in one time period isn’t necessarily a high-spender in the next. This makes predicting who will be high-cost difficult and means that focusing on current high-spenders won’t necessarily bring a return if their spending status doesn’t persist. A new brief from the Employee Benefits Research Institute looks at persistent high-spending patient characteristics. (EBRI Study) The study used claims from 5.8 million people with employer-based insurance over the 2013 to 2017 period.
20% of the people included in the study accounted for 84% of spending, 10% for 70%, 5% for 56% and 1% for 28% of all spending. Those are impressive numbers. Of this group, 27% were in the top 10% of spending in at least one of the five years. That is surprising. Of that 27%, 21% were in the top 10% of spending two years or less, 4% three or four years and only 2% all five years. Let me re-emphasize that, only 2% of the total population studied were in the highest 10% of spending in each of the five years; but that 2% accounted for 19% of all spending in 2017, or about $8 billion. The persistently high-cost patients tended to be older, they were also more likely to be spouses than the employee. One-third had diabetes and 51% of those with diabetes also had hypertension and a quarter also had respiratory disease, back problems or connective tissue disease. The spending by category also varied for the persistently high-cost group versus the non-high-spenders. For the patients in the top ten for the entire five years prescription drugs accounted for 52% of all their spending, outpatient services were 29%, inpatient services for 15% and only 3% was for office visits. This suggests that these patients were users of very expensive specialty medications for chronic diseases, which increasingly includes cancer. Controlling spending on those drugs has proven very difficult. Overall, the report confirms the notion that while a few people account for a lot of spending, just assuming that a high spender in one year will fall in the same category the next won’t be a good management technique.