High costs among dual-eligible beneficiaries due mostly to long-term care

Among persistently high-cost patients covered by Medicare and Medicaid, 68.8% of spending was on long-term care and less than 1% was related to potentially preventable hospitalizations.


High health care costs in patients eligible for both Medicare and Medicaid appear to be related to long-term care rather than to preventable hospitalizations, according to a new study.

Researchers performed an observational study using Medicare and Medicaid data to examine persistently high health care costs in patients eligible for both programs. Payments for 2008, 2009, and 2010 were examined, and patients were categorized as high cost in a particular year if their spending was in the top 10%. The authors also calculated differences in spending for patients who met the high-cost threshold in all three study years, those who met the threshold in 2008 but not in 2009 or 2010, and those who never met the threshold. The study results were published Oct. 2 by Annals of Internal Medicine.

The study included 1,928,340 patients eligible for both Medicaid and Medicare in 2008, 2009, and 2010. In 2008, 192,835 patients (10%) met the threshold for high cost, and of these, 54.8% continued to fall into the high-cost category in the remaining two years of the study. Overall, 5.5% of patients were persistently high cost, 4.5% were transiently high cost, and 84.2% were non-high cost. Patients in the persistently high-cost group were younger than those in the transiently high-cost group and non-high-cost group and had fewer comorbid conditions and more intellectual impairment than those in the transiently high-cost group.

Spending in the persistently high-cost group was $161,224 per year versus $86,333 per year in the transiently high-cost group and $22,352 in the non-high-cost group. Among persistently high-cost patients, 68.8% of spending was on long-term care and less than 1% was related to potentially preventable hospitalizations related to ambulatory care-sensitive conditions, defined as those that can potentially be avoided if the patient receives appropriate, coordinated outpatient care. Persistently high-cost patients accounted for 34.0% of total spending over the three years of the study despite comprising only 5.5% of the dual-eligible population.

The authors noted that their study was based on administrative claims, that their identification of potentially preventable hospitalizations may not have been accurate in all cases, and that their data were relatively old, among other limitations. However, they concluded that high costs appeared to be persistent in more than half of patients eligible for both Medicare and Medicaid and that most of these costs were related to long-term care. “Strategies to control costs in dual-eligible beneficiaries may be more effective if they focus on reducing spending in long-term care rather than on reducing potentially preventable hospitalizations,” the authors wrote.