Using Clinical Information To Project Federal Health Care Spending

Abstract

ABSTRACT:Complications from chronic illnesses often do not emerge for many years. Current federal cost projection methods are constrained by ten-year cost estimates, which capture increases in near-term intervention costs but not changes in long-term costs. Current methods also cannot easily capture the cost implications of changes in disease progression. Type 2 diabetes is a prime example of a chronic illness with long-term health and cost consequences. We present results from an epidemiologically based model that projects federal costs for diabetes under alternative policies, and we discuss the potential changes in the federal budget process needed to capture the full impact of these interventions. T h e h i g h c o s ts a s s o c i at e d w i t h c a r i n g f o r people with chronic diseases is one of the most pressing health policy issues in the United States today.1 The baby-boom generation is entering its retirement years, and advanced age is associated with the development of several costly chronic illnesses. As a result, Medicare and other payers will be under tremendous financial pressure as costs rise from predictable demographic and epidemiological forces. Current Practice, The Ten-Year Budget Window, And DiabetesForecasting future health care costs for the federal government is done primarily by the Office of the Actuary (OACT) at the Centers for Medicare and Medicaid Services (CMS) for the administration and by the Congressional Budget Office (CBO) for Congress. The CMS Office of the Actuary has lead responsibility for w 9 7 8 1 S e p t e m b e r 2 0 0 9

Why Behavioral And Environmental Interventions Are Needed To Improve Health At Lower Cost

“…A ten-year time horizon is generally used by the Congressional Budget Office, but this time frame has been criticized as inadequate to show the full effects of interventions that prevent disease onset or alter the trajectories of chronic diseases. 10 Thus, we show longer-term results as well.Previous analyses using this model have shown that expanding primary care capacity can greatly enhance the ability of coverage and care interventions to improve health and costeffectiveness. 1 We therefore conducted sensitivity tests to examine how the sufficiency of primary care capacity might affect each simulated scenario.…”

“…A ten-year time horizon is generally used by the Congressional Budget Office, but this time frame has been criticized as inadequate to show the full effects of interventions that prevent disease onset or alter the trajectories of chronic diseases. 10 Thus, we show longer-term results as well.…”

Adjustment factors to per capita health-care indicators in countries with expatriate male-majority populations

“…This GCC study argues that in the absence of population adjustment measures, it could result in an oversupply of health-care resources, which might lead to changes in behaviours such as supplier-induced demand or an underproductive health workforce. Huang et al constructed a spending projection model for diabetes, in order to inform health-care budget decisions in the United States (23). Within the United States, health-care costs are rising, due to significant pressure from demographic forces such as a growing elderly population (23).…”

“…Huang et al constructed a spending projection model for diabetes, in order to inform health-care budget decisions in the United States (23). Within the United States, health-care costs are rising, due to significant pressure from demographic forces such as a growing elderly population (23). The population size of people with diabetes was used as a base for projections, with the expectation that more individuals would become diabetic as they aged.…”

The Medicalization of Chronic Disease and Costs

“…This rise is theorized to be due to rising clinical incidence of the condition because diagnosed diabetes prevalence has increased between 1988-1994 and 1999-2002, but the proportion of diagnosed diabetes cases (out of all diagnosed and undiagnosed diabetes cases) has remained constant over the same period (62). Huang (32) projects that the true clinical incidence of diabetes will stagnate by 2020 as the number of people with undiagnosed and newly diagnosed diabetes decreases, although the treated prevalence of diabetes will continue to increase owing to the combination of higher obesity rates and better disease detection.…”