What Drives Health Care Cost Increases in High Resource Patients?

Spending patterns for high resource patients (HRP) differ considerably from the general population of managed care enrollees. Pharmaceutical costs, including specialty drugs, do not impact the higher spending in HRP as much as inpatient expenditures, according to a study published in the Journal of Managed Care and Specialty Pharmacy.

US health care spending nearly doubled in the decade from 2000-2010, and the rate of growth of health care costs is projected to exceed US economic growth for the near future. While there is consensus that growth in health care spending needs to be curtailed, there is debate about which components of health care spending have the most impact, the study noted.

The distribution of health care spending in the full study population shows that over 50% of all costs can be attributed to outpatient services, while less than 25% of costs derive from either pharmacy or inpatient services. There are, however, significant variations in health care spending among different patient groups, among them, HRP.

HRP Contribution to Health Care Spending

The study of health care spending in a large managed care population compared the spending patterns and health conditions of a subset of HRP (n = 779,364) with those of the full study population (N = 15,587,257). HRP was defined as those whose health care spending was in the 95th percentile of the full study population.

Data for this retrospective analysis were obtained from the IMS LifeLink Health Plan Claims (HPC) Database, which includes fully adjudicated medical and pharmaceutical claims for 74 million unique patients from more than 80 US health plans.

Analysis of HRP Spending Patterns

The retrospective analysis determined that the spending pattern for HRP differs considerably from that of the full study population of managed care enrollees. Overall, expenditures among HRP are more than 10 times higher compared with the full population.

Some common health conditions, such as back disorders and osteoarthritis, contribute to the largest share of expenditures in both the HRP and overall populations. In the HRP, other conditions such as chronic renal failure, graft rejection, and some cancers accounted for disproportionately higher expenditures. These health conditions are often associated with increased hospitalizations, and/or disabilities.

Pharmaceutical expenditures are higher in HRP compared with the full population. However, these costs do not impact the overall increase in HRP health care spending as much as inpatient expenditures. A comparison between HRP and total patients of direct health care expenditures by setting of care follows (Figure 1).

(Figure 1)

Direct Health Care Expenditures in CY2011, by Setting of Care

Setting of Care

All Patients

(N = 15,587, 257)

% of Mean Total Expenditures

HRP

(n = 779,364)

% of Mean Total Expenditures

Total Direct All-Cause Expenditures

100.0

100.0

Total Inpatient

24.6

40.0

Total Outpatient

54.1

41.9

Total Pharmacy

21.4

18.1

The analysis also determined that specialty drugs often come at a greater expense, but also are often associated with improved clinical benefits and/or increased patient-specific efficacy.

Research shows that injectable/infusible treatments represent only a relatively minor part of HRP health care expenditures, despite greater physician-administered pharmacy use.

Efforts to limit access to these medications could actually have a negative impact on overall expenditures.

Summary

Pharmaceutical spending is an important part of the health care-spending picture, but it is not the predominant contributor to higher spending in HRP. A primary goal of health care cost reduction efforts needs to be reducing hospitalizations, a significant contributing factor to spending in HRP. Assuring the appropriate use of medicines in some cases may alter or reduce progression of disease.

Moving forward, providers should consider the distribution of expenditures across place of service, as well as the health conditions that are disproportionately more prevalent in HRP when devising resource utilization policies, the study concluded.