Adding to the seemingly-endless list of compelling arguments in favor of universal coverage is the rather obvious “if we insure them now, we won’t have to pay for more expensive care tomorrow.”
Specifically, I’m referring to a recent Commonwealth Fund/AHRQ study on health care costs for new medicare enrollees; the study found that new Medicare enrollees with chronic conditions that previously lacked health insurance incurred substantially higher treatment costs than those that had health insurance before enrolling.
While all previously-uninsured Medicare recipients had higher utilization, this was particularly noticeable for those with hypertension, diabetes, heart disease, or stroke, where prevention and routine care can prevent costly and calamitous acute episodes. The uninsured with these conditions reported more doctor visits (13% relative difference), more hospitalizations (20% relative difference), and higher total medical expenditures (51% relative difference) from ages 65 to 72 years than previously insured adults.
Each year, approximately 2.3 million seniors qualify for Medicare. Of this population, 57% had chronic conditions. The average medical cost (2003 numbers) per Medicare enrollee in the 65-74 age group was $9473. While the information available doesn’t allow a precise calculation of the additional cost involved in treating this group, the amount is certainly well up in the billions.
According to the original article in the NEJM, “The costs of expanding health insurance coverage for uninsured adults before they reach the age of 65 years may be partially offset by subsequent reductions in health care use and spending for these adults after the age of 65, particularly if they have cardiovascular disease or diabetes before the age of 65 years.”
What does this mean for you?
Covering the uninsured would reduce Medicare’s expenses.
Nov
27
Joe– that is not the conclusion that can be reached… what you CAN say, based upon this data is that IF somebody/someone/ government pays for care during the earlier ages that those same people could possibly cost the Medicare system (taxpayers) less when they reach Medicare age.
Nowhere can we determine how much MORE the care for the uninsured group would cost– and whether the associated expenses in total would be less.
People may WANT to draw that conclusion…
Eric – we disagree, but perhaps it is just semantics. the individuals who were covered prior to enrollment had lower costs than those who were not. And we know what the cost differential was.
While we cannot ‘know’ what can be saved by providing these individuals with coverage pre-Medicare, we can confidently assume that the cost of that coverage may be “partially offset by subsequent reductions in health care use and spending for these adults after the age of 65, particularly if they have cardiovascular disease or diabetes before the age of 65 years.” I’d say it is more than a ‘may be’;a whole body of research supports the logic that routine and preventive care dramatically reduces the costs associated with chronic disease.
We can’t ‘prove’ covering individuals pre-medicare will reduce medicare costs, any more than we can ‘prove’ evolution, but that doesn’t mean it isn’t highly likely.
Joe- I am glad Medicare rates up there with evolution in importance for all mankind…
But it is essential to understand that it is possible that the two populations– insured/ uninsured — are not equivalent… and that the costs associated with making sure preventative care is obtained and advice heeded could very well be different…
Eric – I agree, anything is possible – even those phenomena that are unlikely.
What is not unlikely is that providing routine care for those with chronic disease reduces costs.
And what is certain is that those with these chronic conditions without insurance had costs that were more than twice those of the previously-insured enrollees. That disparity itself is rather compelling.
Re evolution and Medicare, the comparison is your’s, not mine.
Joe
Joe – In a recent speech (at an investors conference), MA healthcare expert, Jonathan Gruber, told the audience that newly enrolled Medicare beneficiaries who were uninsured prior to becoming eligible for Medicare cost the Medicare program 20% more per year on average for their first seven years in the program than new beneficiaries who were previously insured.
With respect to the impact of preventive care on healthcare costs, I don’t think we can conclude that it reduces costs. I do think we can conclude that it extends life, however. As one who has personal experience living with heart disease, I learned that some 300,000 people die each year from sudden cardiac death. When death occurs, healthcare costs stop! For those of us who take our medications religiously, watch our weight, get the appropriate exercise and the checkups, we will probably live longer than the non-compliant patients. However, we might then live long enough to get Alzheimer’s, dementia, Parkinson’s, cancer or need one or more expensive cardiac interventions like stents, ICD’s, etc. I also think there is plenty of preventive care that is not cost-effective, but that’s a whole different discussion.
It is a truly depressing state of affairs, that the cost-effectiveness of preventive care is so difficult to demonstrate. The fact that care costs a lot and not all poor health outcomes can be affected by medical care is one of the darnedest things to get around.
Half of Medicare expenses are incurred in the last year of life. Now if we can get rid of death, thereby eliminating costs of that last year, Medicare expenditures would drop dramatically.
The benefits of covering the uninsured are legion, but I’m not sure analyzing costs is the answer. There are numerous intermediate end points with economic value that we still learning to measure. Quality of life is the ROI on any policy expenditure.
Dr. Dee Edington, who runs University of Michigan’s Health Management Research Center, is deeply involved in studies of healthcare costs, and he is well-known leaders in both business and health insurance.
One of his most fascinating discoveries — to me, anyway — was the average annual cost of care for various age cohorts. As you might expect, the lowest was the 19-34 group, followed by the 35-44 group. Interestingly, this curve does not continually climb with age, however. The most expensive age cohort is 55-64, and average annual costs of care actually start declining after that. Indeed, the 65-74 cohort is NOT the second-most expensive., the 45-54s actually cost a wee bit more! And the 75-plus group less than both of those.
So the curve is not actually slanted upward, like you’d expect. It’s more of a camel hump, highest in the years from 45-64.
Here is Dr. Edington’s Powerpoint slide showing it, actually segmented by risk-factors as well.
http://www.hmrc.umich.edu/research/pdf/WW25Slides.pdf
I asked one of the higher-ups at UnitedHealthcare why the curve looked like it did, and he said their actuaries believed that by age 65 or shortly thereafter, the costliest patients with the chronic conditions and multiple comorbidities died. So their effects appear as high medical costs in the 45-64 age range, but start to fade away in the 65-and-up groups. The people that survive well into those age groups have hardy constitutions, good genes or no major health issues, and are generally not as costly to treat or cover as an unhealthy 45-64 year old.
The United guy didn’t mention, though, that at age 65, you age into Medicare, and thenceforth get good coverage, and the treatment you need, neither of which may have been happening from ages 45-64.
If nothing else, go look at the PPT slide, and come back with your own explanation.
The slides are fascinating. I have never seen a risk-adjustment scheme explain more than 50% of forward costs, but it’s been a few years since I worked my way through some pretty dense material…
Since the Michigan data looks like health management for employers, one must presume this applies to well-insured populations. Attrition with age is most likely that very ill people drop out of the workforce and become either uninsured or Medicare patients. I see that amongst our facility’s patient’s all the time.
But take that with a grain of salt, since all I saw are the slides.
Yeah, Medicare cost can be cut, but they will still be putting a lot of elderly people who live on a fixed income in a tough spot by their increasing premiums. This happens while the major companies sit back and collect their money. This is exactly why AARP has set up http://www.thisissoridiculous.com so that we can all sign a petition to make our voice heard. While your there you can also read updated news, watch videos, and even e-mail your congressman to let him know how you feel. I’m working to help AARP promote better Medicare because this is an important issue that isn’t getting enough attention
It is unfortunate to hear so many lack health insurance. We really need to improve our health care system. Health insurance is a major aspect to many and we should help everyone get covered.