Individuals Living in the Community with Chronic Conditions and Functional Limitations: A Closer Look

01/01/2010

HHS Logo: bird/facesU.S. Department of Health and Human Services

Individuals Living in the Community with Chronic Conditions and Functional Limitations: A Closer Look

Lisa Alecxih, Sophie Shen, Iris Chan and Duke TaylorThe Lewin Group

John DrabekOffice of the Assistant Secretary for Planning and Evaluation

January 2010

PDF Version: http://aspe.hhs.gov/daltcp/reports/2010/closerlook.pdf (51 PDF pages)


This report was prepared under contract #HHS-100-03-0027 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the Lewin Group. For additional information about this subject, you can visit the DALTCP home page at http://aspe.hhs.gov/_/office_specific/daltcp.cfm or contact the ASPE Project Officer, John Drabek, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201. His e-mail address is: John.Drabek@hhs.gov.


TABLE OF CONTENTS

I. INTRODUCTION
Data & Definitions
II. ALL COMMUNITY RESIDENTS
Individuals and health spending by health/functional status
Average health spending by number of chronic conditions and functional limitations
Average health spending by health/functional status and health service type
Average health spending by health/functional status and source of financing
Overview of community residents with functional limitations and chronic conditions
Average health spending by primary source of insurance
Most common chronic conditions by health/functional status
Most common chronic conditions by age
Individuals and health spending by age and health/functional status
III. TOP 5% OF HEALTH CARE SPENDERS
Distribution of health spending by top 5% spenders versus those not in top 5% spenders
Relative risk of being in the top 5% of spenders by health/functional status
Individuals and health spending by health/functional status among the top 5% spenders
Most common chronic conditions by age among the top 5% spenders
Average health spending by health service type and health/functional status among the top 5% spenders
Average health spending by primary source of insurance among the top 5% spenders
Average health spending by health service type and primary source of insurance among the top 5% spenders
IV. DUAL ELIGIBLES
Overview of dual eligibles
Average health spending by type of service and health/functional status among dual eligibles
V. CONCLUSION
APPENDIX
NOTES
LIST OF EXHIBITS
EXHIBIT 1: Distribution of Community Residents and Health Care Spending by Select Groups, 2006
EXHIBIT 2: Averge People with Chronic Conditions, Functional Limitations Are Associated with Increased Average Health Spending, Regardless of the Number of Chronic Conditions
EXHIBIT 3: Average Spending by Type of Service for Select Groups, 2006
EXHIBIT 4: Health Spending by Source of Financing for Select Groups, 2006
EXHIBIT 5: Overview of Community Residents with Functional Limitations and Chronic Conditions by Age Groups, 2006
EXHIBIT 6: Health Spending by Primary Source of Insurance and Payment Source, 2006
EXHIBIT 7: Most Common Conditions by Selected Groups, 2006
EXHIBIT 8: Most Common Conditions Among Community Residents Under Age 65, 2006
EXHIBIT 9: Most Common Conditions Among Community Residents Age 65 and Over, 2006
EXHIBIT 10: Distribution of Community Residents Under Age 65 and Health Care Spending by Select Groups, 2006
EXHIBIT 11: Distribution of Community Residents Age 65 and Over and Health Care Spending by Select Groups, 2006
EXHIBIT 12: Distribution of Health Care Spending by Top 5% Spenders Versus Those Not in the Top 5% Spenders, 2006
EXHIBIT 13: Relative Risk of Being in the Top 5% of Health Care Spenders by Selected Groups, 2006
EXHIBIT 14: Distribution of Community Residents and Health Care Spending Among the Top 5% of Spenders by Select Groups, 2006
EXHIBIT 15: Most Common Chronic Conditions Among Top 5% of Spenders Under Age 65, 2006
EXHIBIT 16: Most Common Chronic Conditions Among Top 5% of Spenders Age 65 and Over, 2006
EXHIBIT 17: Health Care Spending by Type of Service Among the Top 5% of Spenders, 2006
EXHIBIT 18: Average Health Spending for Community Residents by Primary Source of Insurance and Payment Source Among the Top 5% of Spenders, 2006
EXHIBIT 19: Health Spending by Type of Service for the Top 5% by Primary Insurance, 2006
EXHIBIT 20: Overview of Dual Eligibles in the Community, 2006
EXHIBIT 21: Health Spending by Type of Service for Dual Eligibles in the Community by Selected Groups, 2006
EXHIBIT A-1: Distribution of Community Residents and Health Care Spending by Select Groups, 2006
EXHIBIT A-2: Average Annual Health Spending by Number of Chronic Conditions & Functional Limitations or ADLs/IADLs, 2006
EXHIBIT A-3: Average Spending by Type of Service for Select Groups, 2006
EXHIBIT A-4: Health Spending by Source of Financing for Select Group, 2006
EXHIBIT A-6: Health Spending by Primary Source of Insurance and Payment Source Among Community Residents with Chronic Conditions & Functional Limitations, 2006
EXHIBIT A-8: Most Common Conditions Among Community Residents Under Age 65 with At Least One Chronic Condition, 2006
EXHIBIT A-9: Most Common Conditions Among Community Residents Age 65 and Over, 2006
EXHIBIT A-10: Distribution of Community Residents Under Age 65 and Health Care Spending by Select Groups, 2006
EXHIBIT A-11: Distribution of Community Residents Age 65 and Over and Health Care Spending by Select Groups, 2006
EXHIBIT A-12: Distribution of Health Care Spending by Top 5% of Spenders Versus Those Not in the Top 5% Spenders, 2006
EXHIBIT A-13: Relative Risk of Being in the Top 5% of Health Care Spenders by Selected Groups, 2006
EXHIBIT A-14: Distribution of Community Residents and Health Care Spending Among the Top 5% of Spenders by Select Groups, 2006
EXHIBIT A-15: Most Common Chronic Diseases Among Top 5% of Spenders Under Age 65, 2006
EXHIBIT A-16: Most Common Conditions Among Top 5% of Spenders Age 65 and Over, 2006
EXHIBIT A-17: Health Care Spending by Type of Service Among the Top 5% of Spenders, 2006
EXHIBIT A-18: Average Health Spending for Community Residents with Chronic Conditions and Functional Limitations by Primary Source of Insurance and Payments Source Among the Top 5% of Spenders, 2006
EXHIBIT A-19: Health Spending by Type of Service for the Top 5% by Primary Insurance, 2006
EXHIBIT A-21: Health Spending by Type of Service for Dual Eligibles in the Community by Select Groups, 2006

I. INTRODUCTION

Introduction

  • Controlling health care costs has become an enormous policy challenge.

  • In examining drivers behind health care costs, researchers have found that individuals with chronic conditions account for a significant amount of health care spending.

  • Statistics showing that one half of the U.S. population has at least one chronic condition and represents more than 80 percent of the health care spending fail to discriminate among those who place a particularly high burden on the health system.

  • This chartbook examines the combination of chronic conditions and functional limitations as a potentially better predictor of high health care utilization.

  • People with functional limitations and chronic conditions need more health care services and help with activities of daily living, placing heavy demands on service delivery, social supports, and public budgets.

  • Although nearly half of the persons living in the community have at least one chronic condition, less than a third of those with chronic conditions have any functional limitation.

  • As the chartbook details, the co-occurrence of chronic conditions and functional limitations has wide-reaching consequences for the health care system, individuals, and the economy. Providing individuals who have both chronic conditions and functional limitations with delivery of effective treatment and coordination across health care and social service systems may offer a high yield strategy to improve lives and control spending.

Data and Definitions

  • Data -- The analyses rely on the 2006 Medical Expenditures Panel Survey (MEPS) which represents the non-institutionalized U.S. population. Having only information on the non-institutionalized is an important limitation for studying chronic disease and disability spending because the nearly two million nursing facility residents not included in the analysis would add close to $200 billion to the $1.03 trillion represented by the population presented here. Health spending includes the following services: inpatient stays, physician offices or outpatient visits, emergency room visits, prescription drugs, and home health care.1

  • Chronic Conditions -- A chronic condition lasts or is expected to last 12 months or longer and either places limitations on normal functioning or requires ongoing care. The analysis relied on a list of 180 diagnosis classifications2 determined to be chronic by a panel of five internists for a prior study for the Agency for Healthcare Research and Quality (AHRQ).3 This analysis focuses on the conditions included in the list defined by AHRQ as chronic.4

  • Functional Limitations -- Limitation in one or more of the following:

    • Physical activity, such as difficulty walking, bending, or stooping.

    • Normal life activity, such as work, housework, or school.

    • Received assistance with Activities of Daily Living (ADL): bathing, eating, dressing, transferring (i.e., from bed to chair), toileting, and walking.

    • Received assistance with Instrumental Activities of Daily Living (IADL): doing housework, preparing meals, taking medications, shopping, telephoning, and managing money.

  • Top 5% of Spenders -- People who had health care expenditures greater than $14,600 in 2006 represented the top 5 percent of spenders.

  • Appendix Tables -- Each table in the Appendix provides data used in developing the corresponding figure or chart in this report. For example, Exhibit A-3 provides the amounts paid for each type of service listed in the bar chart Exhibit 3.

II. ALL COMMUNITY RESIDENTS

People with Chronic Conditions and Functional Limitations Use More Health Care Services than Those with Chronic Conditions Only

See Table A-1 for data used to develop this Pie Chart. Out of the 299 million individuals in the U.S. in 2006, 143 million, or 48 percent, had no chronic condition and no functional limitation. 108 million, 36 percent, had only chronic conditions and 5.5 million or 2 percent had functional limitations only. 42 million, or 14 percent, had both a chronic condition and functional limitation. Out of those with both chronic conditions and functional limitations, 14 million or 5% of the U.S. population received help with an ADL or IADL, and 28 million or 9% had other functional limitations only. Out of the $1.03 trillion spent on healthcare in 2006, $146 billion, or 14% of total spending, was spent by those with no chronic conditions and no functional limitations. $395 billion or 38% was spent by those with only chronic conditions, and $18 billion or 2% was spent by those with only functional limitations. $473 billion or 46% was spent by those with both chronic conditions and functional limitations. Out of those with both chronic conditions and functional limitations, $236 billion or 23% of all U.S. spending was spent by those who received help with an ADL or IADL, an $238 billion or 23% of spending was spent by those with other functional limitations only.
  • Fourteen percent of U.S. community residents had both chronic conditions and functional limitations. This 14 percent accounts for 46 percent of all health care spending.

  • Among the 42 million people with both a chronic condition and a functional limitation, 14 million also received help with an ADL or IADL. This 14 million represents 5 percent of the population and 23 percent of all spending.

  • Two percent of the population report functional limitations, including some receiving assistance with ADLs or IADLs, but no chronic conditions. Injuries and infections account for most of the non-chronic conditions among those with functional limitations only.

  • People with chronic conditions and functional limitations spent three times as much as people with only chronic conditions.

Among People with Chronic Conditions, Functional Limitations Are Associated with Increased Average Health Spending, Regardless of the Number of Chronic Conditions

See Table A-2 for data used to develop this Bar Chart. Among those with no chronic conditions, average health spending for those with no functional limitation was $1,022; average health spending for those with other functional limitation only was $2,672; and average health spending for those who received help for ADLs/IADLs was $5,287. Among those with 1 chronic condition, average health spending for those with no functional limitation was $2,380; average health spending for those with other functional limitation only was $4,974; and average health spending for those who received help for ADLs/IADLs was $8,942. Among those with 2 chronic conditions, average health spending for those with no functional limitation was $3,817; average health spending for those with other functional limitation only was $6,383; and average health spending for those who received help for ADLs/IADLs was $12,233. Among those with 3 chronic conditions, average health spending for those with no functional limitation was $4,976; average health spending for those with other functional limitation only was $8,612; and average health spending for those who received help for ADLs/IADLs was $14,296. Among those with 4 chronic condition, average health spending for those with no functional limitation was $6,416; average health spending for those with other functional limitation only was $9,401; and average health spending for those who received help for ADLs/IADLs was $16,016. Among those with 5 or more chronic conditions, average health spending for those with no functional limitation was $9,723; average health spending for those with other functional limitation only was $12,749; and average health spending for those who received help for ADLs/IADLs was $22,380.
  • People with chronic conditions who received help for their ADLs or IADLs spent much more than their counterparts with just chronic conditions. For example, among those with one chronic condition, people who received help with an ADL or IADL spent almost four times that of people with only one chronic condition ($8,942 versus $2,380 per person per year, respectively).

  • People who did not receive assistance with ADLs or IADLs, but still had some functional limitations, spent considerably more than people with chronic conditions only.

People with Functional Limitations and Chronic Conditions Spend More on All Types of Health Care Services

See Table A-3 for data used to develop this Bar Chart. On average, all U.S. community residents spent $3452 in 2006 on healthcare. Of those expenditures, $1117 was for outpatient spending, $1027 for inpatient, $125 for the emergency room, $746 for prescription drugs, and $113 for home health. On average, U.S. community residents with functional limitations spent $3278 in 2006 on healthcare. Of those expenditures, $1168 was for outpatient spending, $1298 for inpatient, $142 for the emergency room, $230 for prescription drugs, and $104 for home health. On average, U.S. community residents with chronic conditions spent $3641 in 2006 on healthcare. Of those expenditures, $1349 was for outpatient spending, $843 for inpatient, $128 for the emergency room, $893 for prescription drugs, and $22 for home health. On average, U.S. community residents with no functional limitation and no chronic condition spent $1022 in 2006 on healthcare. Of those expenditures, $365 was for outpatient spending, $288 for inpatient, $71 for the emergency room, $69 for prescription drugs, and $4 for home health. On average, U.S. community residents with both functional limitations and chronic conditions spent $11284 in 2006 on healthcare. Of those expenditures, $3079 was for outpatient spending, $3989 for inpatient, $304 for the emergency room, $2746 for prescription drugs, and $723 for home health. On average, U.S. community residents with functional limitations and chronic conditions who received help with ADLs and IADLs spent $16418 in 2006 on healthcare. Of those expenditures, $3464 was for outpatient spending, $6870 for inpatient, $436 for the emergency room, $3286 for prescription drugs, and $1909 for home health.
  • On average, the 42 million people with chronic conditions and functional limitations spent at least three times the overall average annual health expenditures for all community residents ($11,284 versus $3,452). People with chronic conditions and functional limitations also spend three times what people who only have chronic conditions spend ($11,284 versus $3,641).

  • The subset of persons with chronic conditions and functional limitations that received help with ADLs or IADLs on average spent the most-$16,418 per person. This is almost five times the overall population average of $3,452.

  • Approximately 42 percent of spending for those with chronic conditions and who received help with ADLs or IADLs went to inpatient hospital care, suggesting that improved care management may yield savings in health care spending.

Medicare and Private Insurance Cover the Majority of Health Spending for People with Functional Limitations & Chronic Conditions

See Table A-4 for data used to develop this Bar Chart. On average, all U.S. community residents spent $3452 in 2006 on healthcare. Of those expenditures, $299 was from Medicaid, $812 from Medicare, $1408 from private insurance, $654 from out-of-pocket, and $278 was from other sources. On average, U.S. community residents with functional limitations only spent $3278 in 2006 on healthcare. Of those expenditures, $453 was from Medicaid, $581 from Medicare, $1323 from private insurance, $525 from out-of-pocket, and $396 was from other sources. On average, U.S. community residents with chronic conditions only spent $3641 in 2006 on healthcare. Of those expenditures, $200 was from Medicaid, $471 from Medicare, $1889 from private insurance, $860 from out-of-pocket, and $221 was from other sources. On average, U.S. community residents with no chronic conditions and no functional limitations spent $1002 in 2006 on healthcare. Of those expenditures, $132 was from Medicaid, $13 from Medicare, $564 from private insurance, $239 from out-of-pocket, and $74 was from other sources. On average, U.S. community residents with both chronic conditions and functional limitations spent $11284 in 2006 on healthcare. Of those expenditures, $1107 was from Medicaid, $4456 from Medicare, $3061 from private insurance, $1557 from out-of-pocket, and $1103 was from other sources. On average, U.S. community residents with both chronic conditions and functional limitations who received help with ADLs and IADLs spent $16418 in 2006 on healthcare. Of those expenditures, $2100 was from Medicaid, $7853 from Medicare, $3601 from private insurance, $1831 from out-of-pocket, and $1032 was from other sources.
  • People with chronic conditions and functional limitations had higher average spending across all payment sources.

  • People with a combination of chronic conditions and functional limitations faced higher out-of-pocket costs. They paid two to three times as much out-of-pocket as the overall population, $1,557 versus $654, but paid a smaller proportion of their total expenditures out-of-pocket (14 percent versus 19 percent). (See Appendix).

  • Public programs covered a large portion of expenditures for people who received help with ADLs and IADLs. On average, Medicare accounted for 48 percent of the group's annual expenditures and Medicaid covered 13 percent.

People Under Age 65 Represent More than Half of the Population with Chronic Conditions and Functional Limitations

Exhibit 5: Overview of Community Residents with Functional Limitations and Chronic Conditions by Age Groups, 2006
  Number of  Community  Residents(Millions)   Percent of Age  Group withChronicConditions &FunctionalLimitations TotalHealth Care  Expenditures  (Billions) AverageAnnualHealth Care  Expenditures  
All Ages 42 14% $473 $11,283
     Age 65 & Older   18 48% $235 $12,880
     Under Age 65 24 9% $239 $10,068
SOURCE: The Lewin Group analysis of 2006 Medical Expenditures Panel Survey, 2009
  • The elderly have a higher prevalence rate of chronic conditions and functional limitations (48 percent of the elderly versus nine percent of the non-elderly).

  • However, the large size of the population under age 65 results in a greater number of non-elderly persons with chronic conditions and functional limitations. Most of the 42 million persons with chronic conditions and functional limitations were under age 65 (24 million, or 57 percent).

  • Total health care spending for the younger and older groups of persons with chronic conditions and functional limitations are similar, with $239 billion for the non-elderly and $235 billion for the elderly.

  • However, average annual health spending for those with chronic conditions and functional limitations is 28 percent higher among the elderly than among the non-elderly ($12,880 for the elderly and $10,068 for the non-elderly).

Among the 42 Million People with Both Chronic Conditions and Functional Limitations, Private Insurance Plays a Greater Role for Individuals Under Age 65

See Table A-6 for data used to develop this Bar Chart. Among the 42 million people with both chronic conditions and functional limitations, 13 million were under the age of 65 and had any private insurance and spent on average $11473. $203 was from Medicaid, $929 was from Medicare, $7745 was from private insurance, $1747 was from out-of-pocket, and $849 was from other sources. 7 million were under the age of 65 with only public insurance and spent on average $10278 in 2006. $5112 was from Medicaid, $3311 was from Medicare, $971 was from out-of-pocket, and $884 was from other sources. 3 million were all ages and uninsured. They spent on average $3953 in 2006. $1643 was from out-of-pocket, and $2310 was from other sources. 10 million were over the age of 65 with Medicare and some private insurance and spent on average $13764 in 2006. $173 was from Medicaid, $8185 was from Medicare, $2578 was from private insurance, $1808 was from out-of-pocket, and $1020 was from other sources. 3 million were over the age of 65 with Medicare and Medicaid and spent on average $14172 in 2006. $2646 was from Medicaid, $10213 was from Medicare, $132 was from private insurance, $808 was from out-of-pocket, and $373 was from other sources. 6 million or 14% were over the age of 65 with Medicare and Medicaid and spent on average $11083 in 2006. $7637 was from Medicaid, $1755 was from out-of-pocket, and $1691 was from other sources.
  • Among individuals under age 65 with chronic conditions and functional limitations, 13 million had some private insurance, while 7 million had only public insurance.

  • Among older Americans with chronic conditions and functional limitations, dual eligibles spent the most on average ($14,172 per person per year). Dual eligibles spent more than those who used a combination of public and private insurance ($13,764 per person per year) or people who primarily used Medicare only ($11,083 per person per year).

People with Chronic Conditions Only and Those with Both Chronic Conditions and Functional Limitations Have Similar Chronic Conditions

Exhibit 7: Most Common Conditions by Select Groups, 2006
People withChronicConditionsOnly People withFunctionalLimitationsOnly People withChronicConditions &FunctionalLimitations People withChronicConditions &ReceivedADL/IADL Help
Chronic Conditions Conditions Not Classified asChronic by AHRQ Chronic Conditions Chronic Conditions
Essential Hypertension Back Disorder Nec & Nos Essential Hypertension Essential Hypertension
Allergic Rhinitis Injury Nec/Nos Dis of Lipoid Metabolism Diabetes Mellitus
Dis of Lipoid Metabolism Joint Disorder Nec & Nos Arthropathies Nec/Nos Dis of Lipoid Metabolism
Chronic Sinusitis General Symptoms Depressive Disorder Nec Depressive Disorder Nec
Depressive Disorder Nec Acute Nasopharyngitis Diabetes Mellitus Arthropathies Nec/Nox
Asthma Other Intestinal Infection Neurotic Disorders Neurotic Disorders
Neurotic Disorders Other Soft Tissue Dis Allergic Rhinitis Allergic Rhinitis
Diabetes Mellitus Normal Pregnancy Intervertebral Disc Dis Ill-Defined Heart Disorder
Arthropathies Nec/Nos Periph Enthesopathies Asthma Asthma
Migraine Skin/Other Integument Symp Ill-Defined Heart Disorder Intervertebral Disc Dis
Acquired Hypothyroidism Influenza Chronic Sinusitis Cataract
Hyperkinetic Syndrome Sprain of Ankle & Foot Cataract Cardiac Dysrhythmias
Intervertebral Disc Disorder Diseases of Esophagus Cardiac Dysrhythmias Acquired Hypothyroidism
Cataract Sprain Of Knee & Leg Acquired Hypothyroidism Chronic Sinusitis
Ill-Defined Heart Disorder Other Urinary Tract Disorder Glaucoma Heart Failure
SOURCE: The Lewin Group analysis of 2006 Medical Expenditures Panel Survey, 2009Dis: disorder; Nec: not elsewhere classified; Nos: not otherwise specified
  • Hypertension (high blood pressure) tops the chronic condition list for all groups with some chronic condition.

  • People with chronic conditions and functional limitations commonly had hypertension, diabetes, lipoid metabolism disorders (high cholesterol), and arthritis disorders.

  • Mental health conditions (depression and neurotic disorders) constituted two of the top ten chronic conditions among people with chronic conditions and functional limitations.

  • The chronic conditions of allergies, chronic sinusitis, and asthma were more frequent among those with chronic conditions only than among those with both chronic conditions and functional limitations.

High Blood Pressure and Allergies Represent the Most Common Chronic Conditions Among People Under Age 65

See Table A-8 for data used to develop this Bar Chart. Among the 116 million community residents under the age of 65 with at least one chronic condition, 2% had a disorder of menstruation, 2% had menopausal disorders, 4% had acquired hypothyroidism, 4% had hyperkinetic syndrome, 5% had intervertebral disc disorder, 6% had migraine, 8% had arthropathies, 10% had diabetes mellitus, 12% had neurotic disorders, 13% had asthma, 13% had chronic sinusitis, 16% had disorder of lipoid metabolism, 17% had depressive disorder, 21% had allergic rhinitis, and  24% had essential hypertension.
Nec: not elsewhere classified; Nos: not otherwise specified
  • About 44 percent of people under age 65 had a least one chronic condition (116 million out of 261 million).

  • About a quarter of people under age 65 with a chronic condition had hypertension (high blood pressure), and about a fifth had allergic rhinitis (allergies).

  • Other common chronic conditions included mood disorders (depression and affective psychoses) and lipoid metabolism disorders.

High Blood Pressure and High Cholesterol Represent the Most Common Chronic Conditions Among People Age 65 and Over

See Table A-9 for data used to develop this Bar Chart. Among the 34 million community residents over the age of 65 with at least one chronic condition, 5% had chronic sinusitis, 5% had hearing loss, 6% had asthma, 7% had acquired hypothyroidism, 7% had glaucoma, 9% had cardiac dysrhythmias, 9% had neurotic disorders, 11% had allergic rhinitis, 11% had ill-defined heart disease, 12% had cataracts, 12% had depressive disorder, 23% had diabetes mellitus, 25% had arthropathies, 41% had disorder of lipoid metabolism, and 61% had essential hypertension.
Nec: not elsewhere classified; Nos: not otherwise specified
  • About 89 percent of people age 65 and over had a least one chronic condition (34 million out of 38 million).

  • About 60 percent of people age 65 and over with chronic conditions had hypertension (high blood pressure). About 40 percent had a lipoid metabolism disorder (high cholesterol). About a quarter had arthritis and nearly a quarter had diabetes.

  • Some conditions affected much larger percentages of people age 65 and over than people under age 65, such as arthropathies (arthritis), diabetes, hypertension and lipoid metabolism disorders.

People with Functional Limitations and Chronic Conditions Represent Nine Percent of Adults Under Age 65, but Account for One-Third of the Group's Health Care Expenditures

See Table A-10 for data used to develop this Pie Chart. Out of the 261 million individuals under the age of 65 in the U.S. in 2006, 140 million, or 54 percent, had no chronic condition and no functional limitation. 92 million, 35 percent, had only a chronic condition and 5 million or 2 percent only had a functional limitation. 24 million, or 9 percent, had both a chronic condition and functional limitation. Out of those with both chronic conditions and functional limitations, 7 million or 3% of the U.S. population under 65 received help with an ADL or IADL, and 17 million or 7% had other functional limitations only. Out of the $700 billion spent on healthcare by individuals under the age of 65 in 2006, $143 billion, or 20% of the group?s total spending, was spent by those with no chronic conditions and no functional limitations. $304 billion or 43% was spent by those with only chronic conditions, and $14 billion or 2% was spent by those with only functional limitations. $239 billion or 35% was spent by those with both chronic conditions and functional limitations. Out of those with both chronic conditions and functional limitations, $102 billion or 15% of all U.S. spending by those under 65 was spent by those who received help with an ADL or IADL, an $137 billion or 20% of spending was spent by those with other functional limitations only.
  • Overall, the group under age 65 with chronic conditions and functional limitations (24 million) accounted for $239 billion in health care expenditures. On average, people in this group spent $10,391 on health care in 2006.

  • Among people under age 65, the group with chronic conditions who received help with ADLs or IADLs had disproportionately high health expenditures: 3 percent of people accounted for 15 percent of all spending.

Almost Half of Older Adults Have Functional Limitations and Chronic Conditions, and Account for Over Two-Thirds of All Health Spending for that Age Group

See Table A-11 for data used to develop this Pie Chart. Out of the 38 million individuals over the age of 65 in the U.S. in 2006, 3 million, or 8 percent, had no chronic condition and no functional limitation. 16 million, 42 percent, had only chronic conditions and 1 million or 2 percent only had functional limitations. 18 million, or 48 percent, had both chronic conditions and functional limitations. Out of those with both chronic conditions and functional limitations, 8 million or 20% of the U.S. population over 65 received help with an ADL or IADL, and 10 million or 28% had other functional limitations only. Out of the $333 billion spent on healthcare by individuals over the age of 65 in 2006, $4 billion, or 1% of the group?s total spending, was spent by those with no chronic conditions and no functional limitations. $91 billion or 27% was spent by those with only chronic conditions, and $101 billion or 30% was spent by those with only functional limitations. $235 billion or 70% was spent by those with both chronic conditions and functional limitations. Out of those with both chronic conditions and functional limitations, $134 billion or 40% of all U.S. spending by those over the age of 65 was spent by those who received help with an ADL or IADL, and $101 billion or 30% of spending was spent by those with other functional limitations only.
  • The 18 million people age 65 and over with chronic conditions and functional limitations made up 6 percent of the all-ages community-based population and represented about a quarter of the nation's total health care spending ($235 billion out of $1.03 trillion).

  • The 20 percent of older adults with chronic conditions who received help with ADLs or IADLs represented 40 percent of all spending by community residents age 65 and over.

  • Older adults who had chronic conditions without functional limitations represented a relatively modest share of spending. The 42 percent with at least one chronic condition but no functional limitation accounted for 27 percent of spending for older adults.

III. TOP 5% OF HEALTH CARE SPENDERS

The Top 5% of Health Care Spenders in the Community Spend Half of Total Health Care Resources

See Table A-12 for data used to develop this Pie Chart. Among the 299 million individuals in 2006, 15 million people constituted the top 5% of spenders. Among the $1.03 trillion in health care expenditures, the top 5% accounted for $493, or 48%.
  • Within the $1.03 trillion in health care expenditures among the U.S. community population, spending is highly concentrated among a relatively small proportion of individuals.

  • Given the high concentration of medical expenditures incurred by the top 5 percent of the population ranked by health care spending, identifying the characteristics of these individuals is important for policy.

Among People with Chronic Conditions, Having a Functional Limitation Significantly Increases the Likelihood of Being in the Top 5% of Health Care Spenders

See Table A-13 for data used to develop this Bar Chart. Relative probability compared to the general population for being in the top 5% of spenders for people with no functional limitation and no chronic condition is .2. Relative probability for being in the top 5% of spenders for chronic conditions only is .8; Relative probability for being in the top 5% of spenders for functional limitation is .8; Relative probability for being in the top 5% of spenders for people with at least one chronic condition is 1.8; Relative probability for being in the top 5% of spenders for people with two or more chronic conditions is 2.7; Relative probability for being in the top 5% of spenders for people with 3 or more chronic conditions is 3.6; Relative probability for being in the top 5% of spenders for people with chronic conditions and functional limitations is 4.3; Relative probability for being in the top 5% of spenders for those who received help with an ADL or IADL is 6.1; Relative probability for being in the top 5% of spenders for people with one or more chronic conditions and who received help with an ADL or IADL is 6.6; Relative probability for being in the top 5% of spenders for people with two or more chronic conditions and who received help with an ADL or IADL is 7.1; and Relative probability for being in the top 5% of spenders for with three or more chronic conditions and who received help with an ADL or IADL is 7.7.
  • People with functional limitations and chronic conditions were over four times as likely to be in the top 5 percent of spenders as the general population.

  • People with at least one chronic condition who received help with an ADL or IADL were over six times as likely to be in the top 5 percent of spenders as the general population. Number of people in each bar and details of relative risk can be found in the Appendix.

Among the Top 5% of Spenders, a Majority Have Chronic Conditions and Functional Limitations

See Table A-14 for data used to develop this Pie Chart. Out of the 15 million individuals in the top 5% of healthcare spenders in 2006, 1.1 million, or 7 percent, had no chronic condition and no functional limitation. 4.6 million, 31 percent, had only a chronic condition and .2 million or 1 percent only had a functional limitation. 9 million, or 61 percent, had both a chronic condition and functional limitation. Out of those with both chronic conditions and functional limitations, 4.7 million or 32% of the top 5% of spenders received help with an ADL or IADL, and 4.3 million or 29% had other functional limitations only. Out of the $493 billion spent on healthcare by individuals in the top 5% of spending 2006, $30 billion, or 6% of the group?s total spending, was spent by those with no chronic conditions and no functional limitations. $138 billion or 28% was spent by those with only chronic conditions, and $9 billion or 2% was spent by those with only functional limitations. $316 billion or 64% was spent by those with both chronic conditions and functional limitations. Out of those with both chronic conditions and functional limitations, $182 billion or 37% of all spending by those in the top 5% of spenders was spent by those who received help with an ADL or IADL, and $134 billion or 27% of spending was spent by those with other functional limitations only.
  • People with chronic conditions who also received help with an ADL or IADL represented one-third of the top 5 percent of spenders and over a third of expenditures.

  • People in the top 5 percent of spenders with chronic conditions and, who received help with ADL or IADL, represent less than 2 percent of the overall community-based population, but represent 18 percent of all spending.

High Blood Pressure and Mood Disorders Represent the Most Common Chronic Conditions Among the Top 5% of Spenders Under Age 65

See Table A-15 for data used to develop this Bar Chart. Among the 7.7 million top 5% of spenders under the age of 65 with at least one chronic condition, 5% had malignant neoplasm of the female breast, 6% had cardiac dysrhythmias, 6% had ill-defined heart disease, 7% had acquired hypothyroidism, 7% had migraine, 11% had intervertabral disc disorder, 12% had asthma, 12% had chronic sinusitis, 17% had arthropathies, 17% had neurotic disorders, 20% had allergic rhinitis, 25% had diabetes mellitus, 27% had depressive disorder, 29% had disorder of lipoid metabolism, and 42% had essential hypertension.
Nec: not elsewhere classified; Nos: not otherwise specified
  • Top chronic conditions for those in the top 5 percent of spenders and the overall population were very similar-hypertension (high blood pressure), mood disorders (depression and affective psychoses), lipoid metabolism disorders, and diabetes.

  • However, chronic conditions were more prevalent among the top 5 percent of spenders than in the overall population under 65. For example, 24 percent of the overall population under age 65 had hypertension, as seen in Exhibit 8, but 42 percent of the top 5 percent under age 65 had hypertension.

High Blood Pressure and High Cholesterol Also Represent the Most Common Chronic Conditions Among the Top 5% of Spenders Age 65 and Over

See Table A-16 for data used to develop this Bar Chart. Among the 6 million top 5% of spenders over the age of 65 with at least one chronic condition, 7% had arterial embolism, 8% had cerebral vascular accident (stroke), 8% had glaucoma, 10% had asthma, 11% had heart failure, 13% had allergic rhinitis, 13% had cataract, 14% had cardiac dysrhythmias, 15% had neurotic disorders, 17% had depressive disorder, 20% had ill-defined heart disease, 30% had arthropathies, 37% had diabetes mellitus, 45% had disorder of lipoid metabolism, and 66% had essential hypertension.
Nec: not elsewhere classified; Nos: not otherwise specified
  • Two-thirds of older adults in the top 5 percent of spenders had hypertension (high blood pressure), and almost half had a lipoid metabolism disorder (high cholesterol).

  • While chronic conditions were important for high health care spenders in both age groups, the conditions affected much larger percentages of people age 65 and over. For example, 66 percent of older top-tier spenders reported hypertension, while 42 percent of the younger group reported hypertension.

Among the Top 5% of Spenders, People with Chronic Conditions and Functional Limitations Spend More on Prescription Drugs and Home Health Care

See Table A-17 for data used to develop this Bar Chart. On average, all top 5% spenders spent $32942 in 2006 on healthcare. Of those expenditures, $8363 was for outpatient spending, $16628 for inpatient, $767 for the emergency room, $4630 for prescription drugs, and $1750 for home health. On average, top 5% spenders with only functional limitations spent $38768 in 2006 on healthcare. Of those expenditures, $8562 was for outpatient spending, $25629 for inpatient, $376 for the emergency room, $1892 for prescription drugs, and $1375 for home health. On average, top 5% spenders with only chronic conditions spent $30076 in 2006 on healthcare. Of those expenditures, $9324 was for outpatient spending, $15602 for inpatient, $704 for the emergency room, $3101 for prescription drugs, and $394 for home health. On average, top 5% spenders with no functional limitations and no chronic conditions spent $26419 in 2006 on healthcare. Of those expenditures, $6555 was for outpatient spending, $16694 for inpatient, $899 for the emergency room, $1132 for prescription drugs, and $288 for home health. On average, top 5% spenders with both functional limitations and chronic conditions spent $35087 in 2006 on healthcare. Of those expenditures, $8100 was for outpatient spending, $16919 for inpatient, $792 for the emergency room, $5920 for prescription drugs, and $2636 for home health. On average, top 5% spenders with functional limitations and chronic conditions who received help with ADL/IADLs spent $38518 in 2006 on healthcare. Of those expenditures, $7305 was for outpatient spending, $19462 for inpatient, $885 for the emergency room, $5608 for prescription drugs, and $4611 for home health.
  • On average, individuals in the top 5 percent spent ten times more than the general population on health care services ($32,942 versus $3,452).

  • People who received help with ADLs or IADLs and had chronic conditions spent nearly three times the average home health expenditures as the overall top 5 percent group ($4,611 versus $1,750, see Appendix).

  • On average, people with chronic conditions and functional limitations represent the higher spending among highest spenders. The 95th percentile of health care expenditures, the threshold for the top 5 percent of spenders group, was $14,600. However, the top 5 percent spenders with both functional limitations and chronic conditions spent an average of $35,087 on health care in 2006.

Among Top 5% Spenders with Both Chronic Conditions and Functional Limitations, Private Insurance Plays a Greater Role for Individuals Under Age 65

See Table A-18 for data used to develop this Bar Chart. Among the 9 million top 5% spenders with both chronic conditions and functional limitations, 2.7 million were under the age of 65 and had any private insurance and spent on average $38462 in 2006. $736 was from Medicaid, $3808 was from Medicare, $27185 was from private insurance, $4007 was from out-of-pocket, and $2726 was from other sources. 1.5 million top 5% spenders with both chronic conditions and functional limitations were under the age of 65 and only had public insurance. They spent on average $30661 in 2006. $15065 was from Medicaid, $10963 was from Medicare, $2111 was from out-of-pocket, and $2552 was from other sources. .2 million top 5% spenders with both chronic conditions and functional limitations were all ages and were uninsured. They spent on average $23897 in 2006. $4489 was from out-of-pocket, and $19408 was from other sources. 2.7 million top 5% spenders with both chronic conditions and functional limitations were over the age of 65 and had Medicare and private insurance. They spent on average $36082 in 2006. $616 was from Medicaid, $23447 was from Medicare, $6307 was from private insurance, $2918 was from out-of-pocket, and $2794 was from other sources. .7 million top 5% spenders with both chronic conditions and functional limitations were over the age of 65 with Medicare and Medicaid. They spent on average $37659 in 2006. $7192 was from Medicaid, $27921 was from Medicare, $373 was from private insurance, $1302 was from out-of-pocket, and $871 was from other sources. 1.3 million top 5% spenders with both chronic conditions and functional limitations were over the age of 65 and had Medicare only. They spent on average $32849 in 2006. $24196 was from Medicare, $3145 was from out-of-pocket, and $5508 was from other sources.
  • Among the nine million community residents with both chronic conditions and functional limitations who spent at least $14,600 in health care in 2006, individuals under age 65 relied more heavily on private insurance than public insurance.

  • Among the primary insurance groups for older adults in the top 5 percent with both chronic conditions and functional limitations, Medicare covered between $24,000 and $28,000 in 2006.

Older Adults with Medicaid and Medicare (Dual Eligibles) in the Top 5% of Spenders with Chronic Conditions and Functional Limitations Have High Home Health Expenditures

See Table A-19 for data used to develop this Bar Chart. People under the age of 65 with any private insurance spent on average $38461 on healthcare in 2006. $11602 was for outpatient, $15587 was for inpatient, $937 was for emergency room, $8489 was for prescription drugs, and $1040 was for home health. People under the age of 65 with only public insurance spent on average $30660 on healthcare in 2006. $6930 was for outpatient, $12333 was for inpatient, $837 was for emergency room, $6666 was for prescription drugs, and $3502 was for home health. People of all ages who were uninsured spent on average $23898 on healthcare in 2006. $5230 was for outpatient, $13252 was for inpatient, $855 was for emergency room, $4094 was for prescription drugs, and $94 was for home health. People over the age of 65 with Medicare and private insurance spent on average $35816 on healthcare in 2006. $7245 was for outpatient, $19266 was for inpatient, $725 was for emergency room, $4545 was for prescription drugs, and $3146 was for home health. People over the age of 65 who were dual eligibles spent on average $37659 on healthcare in 2006. $5085 was for outpatient, $18025 was for inpatient, $1071 was for emergency room, $4535 was for prescription drugs, and $8516 was for home health. People over the age of 65 with Medicare only spent on average $32849 on healthcare in 2006. $6039 was for outpatient, $19114 was for inpatient, $653 was for emergency room, $3729 was for prescription drugs, and $2518 was for home health.
  • Older dual eligibles in the top 5 percent with both chronic conditions and functional limitations spent an average of $8,516 a year on home health, two to three times the amount that older adults in other insurance categories spent. The older dual eligibles also had lower expenditures for outpatient and inpatient care compared to other older adults of different coverage types.

  • Among people under age 65 in the top 5 percent with both chronic conditions and functional limitations, people with public insurance only spent on average over three times as much on home health as people with some private insurance ($3,502 versus $1,040).

IV. DUAL ELIGIBLES

Dual Eligibles Are a Group with Chronic Conditions, Functional Limitations, and Significant Expenditures

Exhibit 20: Overview of Dual Eligibles in the Community, 2006
  Number ofDual Eligibles  in Community  (Millions) Percent ofTotal  Community  Population TotalHealth Care  Expenditures  (Billions) Percent ofTotalHealth Care  Expenditures   AverageAnnualHealth Care  Expenditures  
All Dual Eligibles 7.0 2.3% $70 7% $10,133
Dual Eligibles with Chronic Conditions and Functional Limitations   4.4 1.5% $60 6% $13,821
     Age 65 & Older 2.6 0.6% $37 4% $14,173
     Under Age 65 1.7 0.9% $23 2% $13,288
SOURCE: The Lewin Group analysis of 2006 Medical Expenditures Panel Survey, 2009
  • In 2006, seven million people living in the community had both Medicare and Medicaid coverage. Among them, 63 percent had both chronic conditions and functional limitations.

  • Dual eligibles in the community spent $70.3 billion on health care in 2006. On average, dual eligibles spent $10,133 on health care, compared to $3,452 annual health care expenditure for the community-based population at the national level.

  • Dual eligibles with chronic conditions and functional limitations represented about 1.5 percent of the community-based population, and with $60.5 billion in total expenditures, represented 6 percent of the nation's spending.

  • On average, dual eligibles with chronic conditions and functional limitations spent $13,821 on health care in 2006. About 28 percent of this group is in the top 5 percent of spenders, meaning that dual eligibles with chronic conditions and functional limitations were over five times as likely to be in the top 5 percent of spenders as the general population.

  • Many dual eligibles with chronic conditions and functional limitations were younger- 1.7 million were under the age of 65, making up 39 percent of all dual eligibles with chronic conditions and functional limitations.

  • On average, older dual eligibles with chronic conditions and functional limitations spent $14,173 on health care a year, close to the 95th percentile of health care spending ($14,600).

Most Dual Eligibles Have Chronic Conditions and Functional Limitations, and Correspondingly Higher Expenditures

See Table A-21 for data used to develop this Bar Chart. On average, all dual eligibles spent $10133 on healthcare in 2006. $1841 was for outpatient, $3480 for inpatient, $290 for emergency room, $2543 for prescription drugs, and $1700 for home health. On average, dual eligibles with chronic conditions and functional limitations spent $13821 on healthcare in 2006. $2540 was for outpatient, $4459 was for inpatient, $403 was for emergency room, $3451 was for prescription drugs, and $2589 was for home health. On average, dual eligibles under the age of 65 spent $9146 on healthcare in 2006. $1992 was for outpatient, $2355 for inpatient, $282 for emergency room, $2831 for prescription drugs, and $1395 for home health. On average, dual eligibles under the age of 65 with chronic conditions and functional limitations spent $13288 on healthcare in 2006. $2846 was for outpatient, $3206 was for inpatient, $379 was for emergency room, $4218 was for prescription drugs, and $2240 was for home health. On average, dual eligibles 65 and over spent $10814 on healthcare in 2006. $1736 was for outpatient, $4256 for inpatient, $296 for emergency room, $2344 for prescription drugs, and $1910 for home health. On average, dual eligibles 65 and over with chronic conditions and functional limitations spent $14173 on healthcare in 2006. $2338 was for outpatient, $5288 was for inpatient, $420 was for emergency room, $2944 was for prescription drugs, and $2820 was for home health.
  • Overall, dual eligibles spent $10,133 on health care and dual eligibles with chronic conditions and functional limitations spent $13,821. The national average for health care spending among the general population was $3,452.

  • Younger dual eligibles with chronic conditions and functional limitations spent almost twice as much on home health ($2,240) than the overall younger dual eligibles group ($1,395).

V. CONCLUSION

Conclusion

  • People with functional limitations and chronic conditions need more health care services and help with activities of daily living, placing heavy demands on service delivery, social supports, and public budgets.

  • Functional limitations, ADLs, and IADLs, in combination with chronic conditions, appear to serve as a more promising indicator than chronic conditions alone for the small group of individuals with a heavy concentration of health care spending.

  • Some Key Findings from this Chartbook:

    • People with both chronic conditions and functional limitations who received help with an ADL or IADL represented 5 percent of the population and 23 percent of all spending. This group spent at least four times the overall average annual health expenditures for all community residents.

    • People under age 65 with chronic conditions and functional limitations represent nine percent of younger adults but account for one-third of health care expenditures for the group.

    • Almost half of older adults had chronic conditions and functional limitations and accounted for over two-thirds of all health spending for that age group.

    • Among those with one chronic condition, people who received help with ADLs or IADLs spent almost four times what people with only one chronic condition spent.

    • Those with chronic conditions and who received help with ADLs or IADLs spent nearly $2,000 on home health, about 19 times the overall average.

    • People with at least one chronic condition who received help with ADLs or IADLs were over six times as likely to be in the top 5 percent of spenders as the general population.

    • The $493 billion spent on health care by 5 percent of the U.S. population represented half of health care spending by the entire community-based population in 2006 ($1 trillion). Among the top 5 percent of spenders, a majority-61 percent-had a chronic condition and functional limitation, which represented 64 percent of spending.

    • Among the top 5 percent of spenders, people with chronic conditions and functional limitations spent more on prescription drugs and home health.

    • Most dual eligibles had chronic conditions and functional limitations, and correspondingly higher expenditures.

  • The data presented here support continued study of emerging new models to better manage chronic conditions and functional limitations, as well as other strategies to prevent or delay functional limitation among those with chronic conditions only.

APPENDIX

Appendix Each table in this Appendix provides data used in developing the corresponding figure or chart in the report. For example, Exhibit A-3 provides the amounts paid for each type of service listed in the bar chart Exhibit 3.

Exhibit A-1: Distribution of Community Residents and Health Care Spending by Select Groups, 2006
Health Status Community Residents(Millions) Percent of Total People
No Chronic, No Limitation 143.3 48%
Chronic Only 108.5 36%
Functional Limitation Only 5.5 2%
Chronic and Functional Limitation 42 14%
Among Chronic Condition and Functional Limitation Community Residents(Millions) Percent of Total People
     Received ADL-IADL Help 14.3 5%
     Had Other Functional Limitations Only 27.6 9%
Total 299.3 100%
Expenditures Total Spending(Billions) Percent of Total Spending
No Chronic, No Limitation $ 146.4 14%
Chronic Only $ 395.1 38%
Functional Limitation Only $ 18.1 2%
Chronic and Functional Limitation $ 473.4 46%
Among Chronic Conditions and Functional Limitation Total Spending(Billions) Percent of Total Spending
     Received ADL-IADL Help $ 235.7 23%
     Had Other Functional Limitations Only $ 237.8 23%
Total $ 1,033 100%
  Exhibit A-2: Average Annual Health Spending by Number of Chronic Conditions & Functional Limitations or ADLs/IADLs, 2006  
Number of Chronic Conditions No FunctionalLimitation Had OtherFunctionalLimitation Only Received Helpwith an ADL/IADL
No Chronic Condition $ 1,022 $ 2,672 $ 5,287
1 Chronic Condition $ 2,380 $ 4,974 $ 8,942
2 Chronic Conditions $ 3,817 $ 6,383 $ 12,233
3 Chronic Conditions $ 4,976 $ 8,612 $ 14,296
4 Chronic Conditions $ 6,416 $ 9,401 $ 16,016
5+ Chronic Conditions $ 9,723 $ 12,749 $22,380
Exhibit A-3: Average Spending by Type of Service for Select Groups, 2006
HealthServices   Everyone     Functional  LimitationOnly Chronic  Condition  Only NoFunctionalLimitatoin,  No Chronic  Condition All  Functional  Limitation& ChronicCondition Subset ofFunctionalLimitation& Chronic--PeoplewhoReceived  ADL/IADL  Help
Outpatient $ 1,117 $ 1,168 $ 1,349 $ 365 $ 3,079 $ 3,464
Inpatient $ 1,027 $ 1,298 $ 843 $ 288 $3,989 $ 6,870
Emergency Room $ 125 $ 142 $ 128 $ 71 $ 304 $ 436
Prescription Drugs $ 746 $ 230 $ 893 $ 69 $ 2,746 $ 3,286
Home Health $ 113 $ 104 $ 22 $ 4 $ 723 $ 1,909
Average Total Expenditures $ 3,452 $ 3,278 $ 3,641 $ 1,022 $ 11,284 $ 16,418
HealthServices Millions ofCommunityResidents,Everyone Millions ofCommunityResidents,FunctionalLimitationOnly Millions ofCommunityResidents,ChronicConditionOnly Millions ofCommunityResidents,NoFunctionalLimitatoin,No ChronicCondition Millions ofCommunityResidents,AllFunctionalLimitation& ChronicCondition Millions ofCommunityResidents,Subset ofFunctionalLimitation& Chronic--PeoplewhoReceivedADL/IADLHelp
Community Residents (Millions) 299.3 5.5 108.5 143.3 42.0 14.3
  Percent ofTotalSpending,Everyone Percent ofTotalSpending,FunctionalLimitationOnly Percent ofTotalSpending,ChronicConditionOnly Percent ofTotalSpending,NoFunctionalLimitatoin,No ChronicCondition Percent ofTotalSpending,AllFunctionalLimitation& ChronicCondition Percent ofTotalSpending,Subset ofFunctionalLimitation& Chronic--PeoplewhoReceivedADL/IADLHelp
Percent of Total Spending 100% 2% 38% 14% 46% 23%
Exhibit A-4: Health Spending by Source of Financing for Select Groups, 2006
Payment Source   Everyone     Functional  LimitationOnly Chronic  Condition  Only NoFunctionalLimitatoin,  No Chronic  Condition All  Functional  Limitation& ChronicCondition Subset ofFunctionalLimitation& Chronic--PeoplewhoReceived  ADL/IADL  Help
Medicaid Expenditures $ 299 $ 453 $ 200 $ 132 $ 1,107 $ 2,100
Medicare Expenditures $ 812 $ 581 $ 471 $ 13 $ 4,456 $ 7,853
Private Insurance Expenditures $ 1,408 $ 1,323 $ 1,889 $ 564 $ 3,061 $ 3,601
Out-of-Pocket Expenditures $ 654 $ 525 $ 860 $ 239 $ 1,557 $ 1,831
Other Payment $ 278 $ 396 $ 221 $ 74 $ 1,103 $ 1,032
Average Total Expenditures $ 3,452 $ 3,278 $ 3,641 $ 1,022 $ 11,284 $ 16,418
Payment Sources Millions ofCommunityResidents,Everyone Millions ofCommunityResidents,FunctionalLimitationOnly Millions ofCommunityResidents,ChronicConditionOnly Millions ofCommunityResidents,NoFunctionalLimitatoin,No ChronicCondition Millions ofCommunityResidents,AllFunctionalLimitation& ChronicCondition Millions ofCommunityResidents,Subset ofFunctionalLimitation& Chronic--PeoplewhoReceivedADL/IADLHelp
Community Residents (Millions) 299.3 5.5 108.5 143.3 42.0 14.3
  Percent ofTotalSpending,Everyone Percent ofTotalSpending,FunctionalLimitationOnly Percent ofTotalSpending,ChronicConditionOnly Percent ofTotalSpending,NoFunctionalLimitatoin,No ChronicCondition Percent ofTotalSpending,AllFunctionalLimitation& ChronicCondition Percent ofTotalSpending,Subset ofFunctionalLimitation& Chronic--PeoplewhoReceivedADL/IADLHelp
Percent of Total Spending 100% 2% 38% 14% 46% 23%
Exhibit A-6: Health Spending by Primary Source of Insurance and Payment Source Among Community Residents with Chronic Conditions & Functional Limitations, 2006
PaymentSource Under Age65, AnyPrivate Under Age65, PublicOnly All Age,Uninsured Age 65+,Medicare &Privatea Age 65+,Medicare &Medicaid Age 65+,MedicareOnly
Medicaid $ 203 $ 5,112 --- $ 173 $ 2,646 ---
Medicare $ 929 $ 3,311 --- $ 8,185 $ 10,213 $ 7,637
Private $ 7,746 --- --- $ 2,578 $ 132 ---
Out-of-Pocket $ 1,747 $ 971 $ 1,643 $ 1,808 $ 808 $ 1,755
Other $ 849 $ 884 $ 2,310 $ 1,020 $ 373 $ 1,691
Average Total Expenditures $ 11,474 $ 10,278 $ 3,953 $ 13,764 $ 14,172 $ 11,083
  Millions ofCommunityResidents,Under Age65, AnyPrivate Millions ofCommunityResidents,Under Age65, PublicOnly Millions ofCommunityResidents,All Age,Uninsured Millions ofCommunityResidents,Age 65+,Medicare &Private Millions ofCommunityResidents,Age 65+,Medicare &Medicaid Millions ofCommunityResidents,Age 65+,MedicareOnly
Community Residents (Millions) 13 7 3 10 3 6
  Percent ofTotalSpending,Under Age65, AnyPrivate Percent ofTotalSpending,Under Age65, PublicOnly Percent ofTotalSpending,All Age,Uninsured Percent ofTotalSpending,Age 65+,Medicare &Private Percent ofTotalSpending,Age 65+,Medicare &Medicaid Percent ofTotalSpending,Age 65+,MedicareOnly
Percent of Total Spending For those With Chronic Conditions and Functional Limitations 31% 17% 7% 24% 7% 14%
  1. This column represents people with Medicare and private insurance, but no Medicaid coverage. However, about 6% of this group that did not report Medicaid coverage had expenditures reported as paid by Medicaid.
Exhibit A-8: Most Common Conditions Among Community Residents Under Age 65 with At Least One Chronic Condition, 2006
Under Age 65 Percent of People with Condition, Outof 116 Million Community Residentswith Some Chronic Condition
Disorder of Menstruation 2%
Menopausal Disorders 2%
Acquired Hypothyroidism 4%
Hyperkinetic Syndrome 4%
Intervertebral Disc Disorder 5%
Migraine 6%
Arthropathies Nec/Nos 8%
Diabetes Mellitus 10%
Neurotic Disorders 12%
Asthma 13%
Chronic Sinusitis 13%
Disorder of Lipoid Metabolism 16%
Mood Disorder 19%
Allergic Rhinitis 21%
Essential Hypertension 24%
Mood Disorders is comprised of people with Depressive Disorders Nec and Affective Psychoses.Total number of community residents under age 65 is 261 M.
  Exhibit A-9: Most Common Conditions Among Community Residents Age 65 and Over, 2006  
Age 65 & Over Percent of People with Condition, Outof 34 Million Community Residents withSome Chronic Condition
Chronic Sinusitis 5%
Hearing Loss 5%
Asthma 6%
Acquired Hypothyroidism 7%
Glaucoma 7%
Cardiac Dysrhythmias 9%
Neurotic Disorders 9%
Allergic Rhinitis 11%
Ill-Defined Heart Disorder 11%
Cataract 12%
Mood Disorders 13%
Diabetes Mellitus 23%
Arthropathies Nec/Nos 25%
Disorder of Lipoid Metabolism 41%
Essential Hypertension 61%
Mood Disorders is comprised of people with Depressive Disorders Nec and Affective Psychoses.Total number of community residents age 65 and over is 38 M.
  Exhibit A-10: Distribution of Community Residents Under Age 65 and Health Care Spending by Select Groups, 2006  
Health Status Community Residents(Millions) Percent of Total People
No Chronic, No Limitation 140.4 54%
Chronic Only 92.4 35%
Functional Limitation Only 4.7 2%
Chronic and Functional Limitation 23.7 9%
Among Chronic Condition and Functional Limitation Community Residents(Millions) Percent of Total People
     Received ADL-IADL Help 6.6 3%
     Had Other Functional Limitations Only 17.1 7%
Total 261.2 100%
Expenditures Total Spending(Billions) Percent of Total Spending
No Chronic, No Limitation $ 142.8 20%
Chronic Only $ 304.1 43%
Functional Limitation Only $ 14.1 2%
Chronic and Functional Limitation $ 238.7 35%
Among Chronic Conditions and Functional Limitation Total Spending(Billions) Percent of Total Spending
     Received ADL-IADL Help $ 101.8 15%
     Had Other Functional Limitations Only $ 136.9 20%
Total $ 699.7 100%
  Exhibit A-11: Distribution of Community Residents Age 65 and Over and Health Care Spending by Select Groups, 2006  
Health Status Community Residents(Millions) Percent of TotalPeople
No Chronic, No Limitation 2.9 8%
Chronic Only 16.1 42%
Functional Limitation Only 0.8 2%
Chronic and Functional Limitation 18.2 48%
Among Chronic Condition and Functional Limitation Community Residents(Millions) Percent of TotalPeople
     Received ADL-IADL Help 7.7 20%
     Had Other Functional Limitations Only 10.5 28%
Total 38.0 100%
Expenditures Total Spending(Billions) Percent of TotalSpending
No Chronic, No Limitation $ 3.6 1%
Chronic Only $ 91.0 27%
Functional Limitation Only $ 4.0 1%
Chronic and Functional Limitation $ 234.7 70%
Among Chronic Conditions and Functional Limitation Total Spending(Billions) Percent of TotalSpending
     Received ADL-IADL Help $ 133.9 40%
     Had Other Functional Limitations Only $ 100.8 30%
Total $ 333.4 100%
  Exhibit A-12: Distribution of Health Care Spending by Top 5% of Spenders Versus Those Not in the Top 5% Spenders, 2006  
Spending Status Community Residents(Millions) Percent of TotalPeople
Not Top 5% 284.3 95%
Top 5% 15.0 5%
Total 299.3 100%
Expenditures Total Spending(Billions) Percent of TotalSpending
Not Top 5% $ 539.9 52%
Top 5% $ 493.2 48%
Total $ 1,033.1 100%
Exhibit A-13: Relative Risk of Being in the Top 5% of Health Care Spenders by Selected Groups, 2006
Group (By Chronic Condition,Functional Limitation) CommunityResidents in theTop 5% ofSpenders(Millions) Percent of Groupin Top 5% ofSpenders Relative Probabilityof Being in theTop 5%
All Community Residents 15.0 5% 1.0
No Chronic Condition, No Functional Limitation 1.1 1% 0.2
Chronic Condition Only 4.6 4% 0.8
Functional Limitation Only 0.2 4% 0.8
1+ Chronic Conditions 13.6 9% 1.8
2+ Chronic Conditions 11.5 13% 2.7
3+ Chronic Conditions 9.3 18% 3.6
Chronic Conditions and Functional Limitation 9.0 21% 4.3
Help with an ADL/IADL 4.8 31% 6.1
Help with an ADL/IADL and 1+ Chronic Conditions 4.7 33% 6.6
Help with an ADL/IADL and 2+ Chronic Conditions 4.4 36% 7.1
Help with an ADL/IADL and 3+ Chronic Conditions 3.8 38% 7.7
NOTE: Relative risk for being in the top 5% of spenders is the probability that a specified group will be in the top 5%, compared to the overall probability of being in the top 5% of spenders.
  Exhibit A-14: Distribution of Community Residents and Health Care Spending Among the Top 5% of Spenders by Select Groups, 2006  
Health Status Community Residents(Millions) Percent of Total People
No Chronic Condition, No Functional Limitation 1.1 7%
Chronic Condition Only 4.6 31%
Functional Limitation Only 0.2 1%
Chronic Condition and Functional Limitation 9.0 61%
Among Chronic Condition and Functional Limitation Community Residents(Millions) Percent of Total People
     Received ADL-IADL Help 4.7 32%
     Had Other Functional Limitations Only 4.3 29%
Total 15 100%
Expenditures Total Spending(Billions) Percent of Total Spending
No Chronic Condition, No Functional Limitation $ 30.3 6%
Chronic Condition Only $ 137.9 28%
Functional Limitation Only $ 8.6 2%
Chronic Condition and Functional Limitation $ 316.3 64%
Among Chronic Conditions and Functional Limitation Total Spending(Billions) Percent of Total Spending
     Received ADL-IADL Help $ 181.8 37%
     Had Other Functional Limitations Only $ 134.5 27%
Total $ 493.2 100%
  Exhibit A-15: Most Common Chronic Diseases Among Top 5% of Spenders Under Age 65, 2006  
Community Residents Under Age 65 Percent of People with Condition, Outof 7.7 Million Community Residentswith Some Chronic Condition
Malignant Neoplasm of Female Breast 5%
Cardiac Dysrhythmias 6%
Ill-Defined Heart Disease 6%
Acquired Hypothyroidism 7%
Migraine 7%
Intervertebral Disc Disorder 11%
Asthama 12%
Chronic Sinusitis 12%
Arthropathies Nec/Nos 17%
Neurotic Disorders 17%
Allergic Rhinitis 20%
Diabetes Mellitus 25%
Disorder of Lipoid Metabolism 29%
Mood Disorder 31%
Essential Hypertension 42%
Mood Disorders is comprised of people with Depressive Disorders Nec and Affective Psychoses.Total number of community residents in the top 5% of spenders under age 65 is 9 M.
  Exhibit A-16: Most Common Conditions Among Top 5% of Spenders Age 65 and Over, 2006  
Community Residents Age 65 & Over Percent of People with Condition, Outof 6 Million Community Residents withSome Chronic Condition
Arterial Embolism 7%
Cerebral Vascular Accident 8%
Glaucoma 8%
Asthma 10%
Heart Failure 11%
Allergic Rhinitis 13%
Cataract 13%
Cardiac Dysrhythmias 14%
Neurotic Disorder 15%
Mood Disorders 19%
Ill-Defined Heart Disease 20%
Arthropathies Nec/Nos 30%
Diabetes Mellitus 37%
Disorder of Lipoid Metabolism 45%
Essential Hypertension 66%
Mood Disorders is comprised of people with Depressive Disorders Nec and Affective Psychoses.Total number of community residents in the top 5% of spenders age 65 and over is 6 M.
Exhibit A-17: Health Care Spending by Type of Service Among the Top 5% of Spenders, 2006
    Top 5% of  Spenders   Functional  LimitationOnly Chronic  Condition  Only NoFunctionalLimitatoin,  No Chronic  Condition   Functional  Limitation& ChronicCondition Subset ofFunctionalLimitation& Chronic--PeoplewhoReceived  ADL/IADL  Help
Outpatient $ 8,363 $ 8,562 $ 9,324 $ 6,555 $ 8,100 $ 7,305
Inpatient $ 16,628 $ 25,629 $ 15,602 $ 16,694 $ 16,919 $ 19,462
Emergency Room $ 767 $ 376 $ 704 $ 899 $ 792 $ 885
Prescription Drugs $ 4,630 $ 1,892 $ 3,101 $ 1,132 $ 5,920 $ 5,608
Home Health $ 1,750 $ 1,375 $ 394 $ 288 $ 2,636 $ 4,611
Average Total Expenditures $ 32,942 $ 38,768 $ 30,076 $ 26,419 $ 35,087 $ 38,518
  Millions ofCommunityResidents,Top 5% ofSpenders CommunityResidents,Top 5% ofSpenders,FunctionalLimitationOnly CommunityResidents,Top 5% ofSpenders,ChronicConditionOnly CommunityResidents,Top 5% ofSpenders,NoFunctionalLimitatoin,No ChronicCondition CommunityResidents,Top 5% ofSpenders,FunctionalLimitation& ChronicCondition CommunityResidents,Top 5% ofSpenders,Subset ofFunctionalLimitation& Chronic--PeoplewhoReceivedADL/IADLHelp
Community Residents (Millions) 15.0 0.2 4.6 1.1 9.0 4.7
  Percent ofTotalSpendingfor Top 5% Percent ofTotalSpendingfor Top 5%FunctionalLimitationOnly Percent ofTotalSpendingfor Top 5%ChronicConditionOnly Percent ofTotalSpendingfor Top 5%NoFunctionalLimitatoin,No Chronic Percent ofTotalSpendingfor Top 5%Functional& Chronic Percent ofTotalSpendingfor Top 5%Subset ofFunctional& ChronicReceivedADL/IADLHelp
Percent of Total Spending 100% 2% 28% 6% 64% 37%
Exhibit A-18: Average Health Spending for Community Residents with Chronic Conditions and Functional Limitations by Primary Source of Insurance and Payments Source Among the Top 5% of Spenders, 2006
InsurancePayment Under Age65 AnyPrivate Under Age65 PublicOnly All AgesUninsured Age 65+Medicare& Private Age 65+Medicare&Medicaid Age 65+MedicareOnly
Medicaid $ 736 $ 15,065 $ 0 $ 616 $ 7,192 $ 0
Medicare $ 3,808 $ 10,963 $ 0 $ 23,447 $ 27,921 $ 24,196
Private $ 27,185 $ 0 $ 0 $ 6,307 $ 373 $ 0
Self $ 4,007 $ 2,111 $ 4,489 $ 2,918 $ 1,302 $ 3,145
Other $ 2,726 $ 2,522 $ 19,408 $ 2,794 $ 871 $ 5,508
Average Total Expenditures $ 38,461 $ 30,660 $ 23,898 $ 36,081 $ 37,659 $ 32,849
  Millions ofCommunityResidents,Under Age65 AnyPrivate Millions ofCommunityResidents,Under Age65 PublicOnly Millions ofCommunityResidents,All AgeUninsured Millions ofCommunityResidents,Age 65+Medicare &Private Millions ofCommunityResidents,Age 65+Medicare &Medicaid Millions ofCommunityResidents,Age 65+MedicareOnly
Community Residents (Millions) 2.7 1.5 0.2 2.7 0.7 1.3
  Percent ofTop 5%,Under Age65 AnyPrivate Percent ofTop 5%,Under Age65 PublicOnly Percent ofTop 5%, AllAgesUninsured Percent ofTop 5%,Age 65+Medicare &Private Percent ofTop 5%,Age 65+Medicare &Medicaid Percent ofTop 5%,Age 65+MedicareOnly
Percent of Top 5% with Chronic Conditions & Functional Limitations 30% 16% 2% 29% 8% 14%
Exhibit A-19: Health Spending by Type of Service for the Top 5% by Primary Insurance, 2006
Health ServicesSettings Under  Age 65,  AnyPrivate Under  Age 65,  PublicOnly All Age,  Uninsured   Over Age65,  Medicare &  Private   Over Age  65, DualEligible   Over Age  65,MedicareOnly
Outpatient $ 11,602 $ 6,930 $ 5,230 $ 7,245 $ 5,085 $ 6,039
Inpatient $ 15,587 $ 12,333 $ 13,252 $ 19,266 $ 18,025 $ 19,114
Emergency Room $ 937 $ 837 $ 855 $ 725 $ 1,071 $ 653
Prescription Drugs $ 8,489 $ 6,666 $ 4,094 $ 4,545 $ 4,535 $ 3,729
Home Health $ 1,040 $ 3,502 $ 94 $ 3,146 $ 8,516 $ 2,518
Average Total Expenditures $ 38,461 $ 30,660 $ 23,898 $ 35,816 $ 37,659 $ 32,849
Exhibit A-21: Health Spending by Type of Service for Dual Eligibles in the Community by Select Groups, 2006
Health ServicesSettings All Ages Under Age 65 Age 65 & Over
  All Groups   ChronicConditions&Functional  Limitations     All Groups   ChronicConditions&Functional  Limitations     All Groups   ChronicConditions&Functional  Limitations  
Office/Outpatient ($) 1,841 2,540 1,992 2,846 1,736 2,338
Inpatient ($) 3,480 4,459 2,355 3,206 4,256 5,288
Emergency Room ($) 290 403 282 379 296 420
Prescription Drugs ($) 2,543 3,451 2,831 4,218 2,344 2,944
Home Health ($) 1,700 2,589 1,395 2,240 1,910 2,820
Average Total Expenditures ($) 10,133 13,821 9,146 13,288 10,814 14,173
  Millions ofCommunityResidents,All Ages &Groups Millions ofCommunityResidents,All AgeswithChronic &Functional Millions ofCommunityResidents,Under Age65 & AllGroups Millions ofCommunityResidents,Under Age65 withChronic &Functional Millions ofCommunityResidents,Age 65 &Over, AllGroups Millions ofCommunityResidents,Age 65 &Over withChronic &Functional
Community Residents (Millions) 6.9 4.4 2.8 1.7 4.1 2.6
  Percent ofTotalSpendingfor DualEligibles,All Ages &Groups Percent ofTotalSpendingfor DualEligibles,All AgeswithChronic &Functional Percent ofTotalSpendingfor DualEligibles,Under Age65 & AllGroups Percent ofTotalSpendingfor DualEligibles,Under Age65 withChronic &Functional Percent ofTotalSpendingfor DualEligibles,Age 65 &Over, AllGroups Percent ofTotalSpendingfor DualEligibles,Age 65 &Over withChronic &Functional
Percent of Total Spending for Dual Eligibles (%) 100 86 37 33 63 53

NOTES

  1. MEPS may miss some expenditures for high-cost cases while people are living in the community due to sample attrition. For further information see: Sing, Merrile, Jessica S. Banthin, Thomas M. Selden, Cathy A. Cowan and Sean P. Keehan, "Reconciling Medical Expenditure Estimates from the MEPS and NHEA, 2002," Health Care Financing Review 28, no. 1:25-40.

  2. Diagnosis classification can be defined by 3-digit International Classification of Diseases codes (ICD-9).

  3. URL: http://www.hcup-us.ahrq.gov/toolssoftware/chronic/chronic.jsp#files

  4. Hwang, W., Heller, W., Ireys, H., Anderson, G. 2001. "Out-Of-Pocket Medical Spending for Care of Chronic Conditions," Health Affairs 20, no. 6:267-278.


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