Acute Care Spending in High-Cost Medicare Population

Previous studies have shown that Medicare spending is highly concentrated; 10% of the Medicare population accounts for >50% of the costs of the program. The largest share of spending among high-cost Medicare beneficiaries is related to acute care; emergency department (ED) visits and inpatient hospitalizations represent >55% of expenditures for the high-cost enrollees.

One of the efforts aimed at controlling costs associated with this population of beneficiaries is designed to prevent visits to the ED and reduce hospitalizations for conditions that may benefit from high-quality outpatient management interventions, including case management and care coordination.

However, according to researchers, there are few data on the proportion of inpatient hospitalizations among high-cost patients that are potentially preventable. In addition, little is known about supply-side factors such as the number of primary care physicians in a community that may affect spending on preventable hospitalizations in the high-cost Medicare population.

To quantify preventable acute care services among high-cost Medicare beneficiaries, the researchers recently conducted an analysis designed to identify potentially preventable ED visits and acute care inpatient admissions. They reported results of the analysis online in JAMA [doi.10.1001/jama.2013.7103].

The researchers utilized a 5% Medicare sample from 2010 to identify 1,114,469 Medicare fee-for-service beneficiaries ≥65 years of age. Of those, 113,341 were designated as the high-cost cohort. High-cost patients were, in comparison with non–high-cost patients, older (78 vs 77 years of age), more likely to be male (44.5% vs 41.7%), more often black (8.5% vs 7.1%), and more often Medicaid eligible.

Patients in the high-cost cohort had a higher burden of comorbid illness, including heart failure, diabetes, and cancer, and higher rates of mental illness and substance abuse.

Hospitalizations for both groups were similar in terms of hospital types. However, among the high-cost cohort compared with the non–high-cost group, a higher proportion of hospitalizations were in hospitals in the South (38% vs 45%), hospitals in urban areas (85% vs 78%), major teaching hospitals (21% vs 13%), and safety-net hospitals (23% vs 17%).

The high-cost cohort (10% of the total sample) accounted for 30.8% of ED visits that did not result in inpatient admission. In 2010, 32.9% of total ED costs were incurred by patients in the high-cost group. Within that group, 42.6% of the ED visits were deemed to be preventable, based on validated algorithms. Those visits accounted for 41.0% of the ED costs in the high-cost group.

The most common reasons for preventable hospitalization in the high-cost cohort were congestive heart failure, bacterial pneumonia, and chronic obstructive pulmonary disease. Many of the diagnoses associated with the highest overall costs in the high-cost cohort were deemed nonpreventable; the most common reasons for nonpreventable hospitalizations were orthopedic conditions, ischemic heart disease, and cancer and chemotherapy.

Within the high-cost group, 15.8% of the admissions were associated with preventable causes, and 9.6% of hospital costs were attributable to preventable causes. Within the non–high-cost cohort, whereas overall spending was significantly lower, a higher proportion of inpatient costs were potentially preventable (16.8%).

When the ED and inpatient setting data were combined, 10.0% of costs associated with high-cost patients were potentially preventable, compared with 19.0% of non–high-cost patients. Only 10% of the high-cost group had preventable acute care costs.

The researchers stated, “Among a sample of patients in the top decile of Medicare spending in 2010, only a small percentage of costs appeared related to preventable ED visits and hospitalizations. The ability to lower costs for these patients through better outpatient care may be limited.”