JBC RELEASE: Health Costs Driven by Chronic Conditions Not Transactional Costs

“Policy leaders should move beyond static analysis and cost shifting to a system that can manage costs by managing the chronic conditions that dominate health care spending”

Today, The Josiah Bartlett Center released a report “Chronic Care Management and the Cost of Health Care,” that finds rising health insurance costs are not sustainable for business or government and can only be improved by going after the chronic conditions that drive almost all the costs of health care.

According to the study’s author “ Too many discussions of health care costs tend to think of health care consumers as patients who experience an illness episode and then get fixed. But at least 75% of the cost of health care in the United States comes from chronically ill patients who need regular and ongoing case management.

A “chronic disease” is an ongoing condition like asthma or diabetes which rather than being cured is managed to keep complications from being too expensive and too incapacitating. A broken leg is an event that happens, is fixed, and goes away. Chronic disease is a condition that requires ongoing care.”

As an example, Arlinghaus pointed to his own experience with asthma. “As a small example, I’ve had asthma my whole life. I take antihistamines in the spring so my asthma, while annoying, is under control and I can avoid the emergency room. When I didn’t take my antihistamines, I ended up in the emergency room. Some companies and insurers are already responding to this. My insurance company figured out why I was costing them money and regularly sends me tools to help take care of myself. Staying out of the emergency room is good for me but it also saves them money and all their clients.”

The study also points to the recent focus on obesity. “Obesity more than doubled in the last twenty years. According to recent research, merely reducing obesity to the levels of the not-very-distant past would save the country about $200 billion in total health care costs. The New Hampshire equivalent is $700 million.”

The study concludes with a call to focus not on rationing care or cost-shifting from one payer to another. “A better solution will focus on a growth strategy to improve health and eliminate complications by managing the chronic conditions and health risks that drive almost all the system costs.”