Five Expensive Conditions Cause Rise in Health Care Spending, Study Finds
Five medical conditions are responsible for nearly one-third of the $314 billion increase in health care spending in the United States between 1987 and 2000, according to a Health Affairs Web exclusive study, Scripps Howard/Detroit News reports (Bowman, Scripps Howard/Detroit News, 8/25). The study by Kenneth Thorpe, professor and chair of Emory University's Rollins School of Public Health Department of Health Policy and Management; Curtis Florence, an assistant professor in the department; and Peter Joski, a research assistant in the department, used data for nearly 60,000 patients from the 1987 Medical Expenditure Survey and the 2000 Medical Expenditure Panel Survey, Household Component.
The study says that the 15 medical conditions with the highest cost growth accounted for about 56% of the total increase in health care spending between 1987 and 2000 (Thorpe et al., Health Affairs, 8/25). Of the top 15 conditions, heart disease, mental disorders, lung disorders, cancer and trauma accounted for 31% of the total increase in spending (Scripps Howard/Detroit News, 8/25).
The study is "the first comprehensive examination" of the link between treatment costs for certain medical conditions and the rise in health care spending, the Washington Post reports (Connolly, Washington Post, 8/25). Total health spending is expected to account for 15.2% of the gross domestic product in 2004, up from 11.1% of GDP in 1987. From 1987 to 2000, health spending increased an average of 7.5% per year, or 5.1% when adjusted for inflation. In the past three years, the cost of health insurance premiums has increased an average of 12.5% per year (Health Affairs, 8/25).
Across the 15 medical conditions, the study found a wide variation in the relative importance of increased cost of treatment, rise in prevalence, and growth in population. For heart disease, the increased cost per person treated accounted for 69% of the overall growth in spending -- $56 billion in 2000, compared with $30 billion in 1987 -- with just 1% due to a rise in the number of people treated. By contrast, the increase in spending on mental disorders was driven substantially by a rise in the number of patients treated for the condition; between 1987 and 2000, the number of patients treated for mental disorders nearly doubled to 8,575 cases per 100,000 people, reflecting improvements in diagnosis, according to the study (Davies, Wall Street Journal, 8/25).
"Higher spending on treating heart attacks, low-birthweight babies, cataracts and depression has benefits that outweigh the increased costs," the study says, adding, "Inasmuch as treatments for these conditions are cost-effective, their more widespread use is likely to represent an appropriate if costly expenditure by society." For other conditions, however, Thorpe said that the United States does a "substandard job of providing care" or making adequate diagnoses.
Thorpe pointed to a sharp increase in patients reporting back pain and pulmonary problems such as asthma as an unexplained problem. He also said that to slow health care spending increases, the United States needs to take a "more proactive approach" to providing care. Health care in the United States is "very much of a reactive system; we wait for somebody to get sick and show up" at a doctor's office, Thorpe said. A stronger emphasis on prevention and best practice guidelines for providers to follow would help slow the rate of increase in health spending and improve overall health in the United States, Thorpe said.
Henry Simmons, president of the National Coalition on Health Care, said that the study indicates "truly massive opportunities to improve the effectiveness and value and cost of health care, which are just not being pursued in public policy." He added, "That's a very sad statement."
Len Nichols, vice president of the Center for Studying Health System Change, said, "We've known health care spending is concentrated on certain individuals, but I don't think we knew how concentrated it is by medical condition. This points us in the direction of investigating value for dollars" (Washington Post, 8/25). The study is available online.