Study examines how individuals utilize benefits and services under Medicare program

Feb 25 2010

Findings released today and detailed in the analysis Low Consumption and Higher Medicare Cost: Consumption Clusters in a Medicare Fee-for-Service Population, examine how individuals utilize benefits and services under the Medicare program. The research suggests that beneficiaries with chronic diseases who consume the least of their Medicare benefits and services (referred to as "low consumers") and potentially under manage their disease may experience an acute event that requires costly emergency room visits and hospitalizations.

The research, spearheaded by the National Minority Quality Forum (The Forum), analyzed Medicare data over a six-year period. The Forum found that Medicare beneficiaries may be clustered into five consumption groups (crisis consumers, heavy consumers, moderate consumers, light consumers and low consumers) based on how much Medicare reimburses for services provided to beneficiaries in any year. The two most-costly clusters are crisis consumers and heavy consumers -- representing only 11 percent of Medicare beneficiaries, but 65 percent of all costs. These are dynamic clusters as consumption patterns among beneficiaries can significantly vary from one year to the next. Beneficiaries who are low consumers one year may become heavy consumers the next sparked by a critical and often costly health event. There is ample evidence that in the immediate future, significant increases in reimbursements may be anticipated for those beneficiaries with diabetes who rank among the lowest consumers of benefits.  It is likely that similar patterns exist for those with other chronic diseases.

"The findings paint a new picture of the Medicare beneficiary living with a chronic disease and how that individual utilizes the program," said Gary Puckrein, PhD., Founding Partner of the Diabetes Care Project and President and CEO of the National Minority Quality Forum. "If we can identify these patients, who are under-managing their chronic condition putting them at high-risk for disease complications, we can intervene to help these individuals manage their disease more effectively, and, ultimately, reduce overall health care costs." One out of every four Medicare dollars is spent on beneficiaries with diabetes, with a high percentage attributed to tertiary illness caused by unmanaged or under-managed diabetes.

"We know that diabetes and other chronic conditions disproportionately affect the elderly, and with an aging population and a rapid influx of Baby Boomers entering the Medicare program, we need to better understand the barriers associated with managing their chronic diseases," said James R. Gavin III, MD, PhD, CEO and Chief Medical Officer, Healing Our Village and Chairman Emeritus, National Diabetes Education Program. "If we can better understand our Medicare patients, we can help them achieve better health outcomes."

The Diabetes Care Project (DCP), founded by The Forum, Roche Diagnostics and in partnership with the American Association of Diabetes Educators (AADE) and Healthways, Inc., is a new coalition of patient advocates and health partners who are committed to dramatically reducing acute events that are a consequence of diabetic complications through early interventions and improved chronic-care management (www.diabetescareproject.org).  In 2010, the DCP plans to undertake a series of projects that will help better understand the low consuming diabetic, and their impact on the health care system. The purpose of these initiatives is to offer guidance as to how policies, regulations, targeted interventions, education, and personalized diabetes care management plans may help improve patient outcomes and lower costs for the entire health system.  

Diabetes is a growing public health epidemic affecting over 23 million Americans. According to the Centers for Disease Control and Prevention, type 2 diabetes, fueled by rising rates of obesity, accounts for nearly 90-95 percent of all people with diabetes and disproportionately affects minority and aging populations in the U.S. (nearly 20 percent of Medicare beneficiaries have diabetes). The U.S. spends approximately $174 billion in annual total costs for diagnosed diabetes with $166 billion in direct medical costs.