More MS news articles for Jan 2002

Study Documents Higher Health Care Expenditures And Utilization Among Persons With MS

http://www.nationalmssociety.org/Research-2002Jan11.asp

January 11, 2002

Summary:

A study by investigators at the Center for Health Economics Research and the University of California, San Diego indicates that health care expenditures among persons with MS are two to three times higher than those among individuals without MS.  The study was supported in part by the Health Care Delivery and Policy Research Program of the National MS Society.

The authors utilized three insurer administrative billing datasets (private insurance, Medicare, and Medicaid for disabled individuals).


Details:

Researchers have reported that health care expenditures and utilization among persons with MS who are covered by private or governmental insurance are two to three times higher than among individuals without MS having the same types of coverage. The comparison group used in this study included both healthy individuals as well as those with other chronic or acute conditions. Gregory Pope and colleagues at the Center for Health Economics Research (Waltham, MA) and the University of California at San Diego reported their findings in the January 8, 2002 issue of Neurology. The study was supported in part by the Health Care Delivery and Policy Research Program of the National MS Society

Background:

Individuals with chronic conditions such as MS tend to utilize health care services more than healthy people. As a result, persons with MS are more expensive both for insurers and for health care providers in managed care plans who receive a fixed monthly fee per patient to cover all health care services. Understanding the level of health care expenditures and utilization among persons with MS can help in setting appropriate insurance premiums and provider payments that take these higher costs into account. When the actual costs of health care are taken into account it may help to ensure that individuals with a chronic condition such as MS have access to appropriate specialists and services. Failure to take these higher costs into account encourages insurers and providers to regard the person with MS as a financial drain and to attempt to restrict their access to needed services.

Study:

Gregory Pope and colleagues used three insurer administrative billing datasets (privately insured, Medicare, and Medicaid for disabled individuals in six states) to generate samples of persons with MS between the ages of 18 and 64 and to calculate their expenditures for, and utilization of, health care services. These same data were used to generate comparative information on individuals without MS, including healthy individuals and those with other medical conditions. Persons with MS were included on the basis of the diagnostic codes that providers are required to enter on claim forms. Using this method, the investigators were able to obtain data on 7,477 individuals with MS who were privately insured, 5,755 who were covered by Medicare, and 3,681 who were covered by Medicaid. Since the three datasets contained no identifying information such as names, addresses, or Social Security numbers, the privacy of all persons was protected.

The expenditure data included both the insurer’s component (the amount the insurer pays) and any cost-sharing on the part of the insured such as deductibles and co-payments (the amount the patient pays). It did not include out-of-pocket expenditures for goods or services not covered by the insured’s plan or indirect costs of illness such as lost wages.

The chart below summarizes the findings concerning average annual insured medical expenditures across the three plans. Because much of this information was collected prior to the widespread use of disease-modifying drugs in MS and because Medicare does not cover prescription medications, the dollar figures shown here exclude costs associated with prescription drugs. Compared to other persons in the same insurance plans, average annual insured expenditures for persons with MS were 3.2 times higher among the privately insured ($6,329 vs. $2,001), 1.9 times higher among Medicare beneficiaries ($11,230 vs. $6,006), and 2.5 times higher among Medicaid recipients ($10,358 vs. $4,111).

Expenditures were not evenly distributed across the MS population. Instead, as is generally true of such costs in the general population, expenditures for health care among persons with MS tended to be concentrated among a small proportion of individuals. For example, 20% of the costs were accounted for by the most expensive 1% of those with MS

and 82.5% of the costs were accounted for by the most expensive 25% of those with MS. The least expensive 50% of those with MS accounted for less than 5% of costs. Because administrative billing data do not include information on type or severity of MS, the investigators were not able to identify the type or severity of MS represented in these breakdowns.

Conclusion:

This study found that health care expenditures and utilization were higher among persons with MS than among persons without MS across three important third-party payers: private insurers, Medicare, and Medicaid. The authors conclude that these higher costs need to be taken into account in payments made to health care providers. Not taking these higher costs into account could adversely affect the access that persons with MS have to needed services. Particularly in managed care plans where providers are paid a fixed monthly fee to provide health care to enrollees, the higher costs associated with MS could discourage providers from serving those with MS.

The authors suggest that “diagnostic risk adjustment” (adjusting payments based on costs associated with a specific medical diagnosis) should be more widely utilized than at present. Diagnostic risk adjustment could result in reimbursement levels that more accurately reflect the costs associated with MS and help to ensure that persons with MS have access to the specialized services they need. The authors further suggest that since health care costs are not evenly distributed across the MS population, an additional adjustment based on MS severity could further refine reimbursement procedures. Many third party payers have already begun to move in the direction of utilizing diagnostic risk adjustment. The authors endorse this trend and suggest that it needs to be expanded in the future not only for MS but for other chronic conditions with similarly elevated expenditures and rates of utilization.

 
© 2002 The National Multiple Sclerosis Society