NCPA - National Center for Policy Analysis

THE RISE IN SPENDING AMONG MEDICARE BENEFICIARIES

August 23, 2006

Obesity and certain chronic conditions were major factors driving virtually all Medicare spending growth for the past 15 years, according to a new analysis of Medicare cost and patient data.

According to economists Kenneth Thorpe and David Howard:

  • In 1987, 11.7 percent of the Medicare population was considered obese, and spending was 9.4 percent of the federal government program's budget.
  • That number grew to 22.5 percent of Medicare enrollees by 2002, and spending jumped to 24.8 percent.

Physicians also are becoming more aggressive in treating patients who have a cluster of cardiovascular-related risk factors such as diabetes, high blood pressure or low levels of "good" cholesterol, the authors found.

  • Such treatment patterns are good news for seniors because it means many older men and women are living longer.
  • But more elderly Americans living longer also increases the long-term costs of the Medicare program.

Total Medicare expenditures were $336 billion in 2005 and are projected to increase at a rapid clip as the first wave of the 75 million baby boomers reaches retirement age and Medicare eligibility in 2010.

Source: Larry Wheeler, "Obesity, chronic disease drive Medicare costs up," USA Today, August 22, 2006; based upon: Kenneth E. Thorpe and David H. Howard, "The Rise In Spending Among Medicare Beneficiaries: The Role Of Chronic Disease Prevalence

And Changes In Treatment Intensity," Health Affairs, August 22, 2006.

For text (subscription required):

http://www.usatoday.com/news/washington/2006-08-22-medicare-obesity_x.htm

For study text:

http://content.healthaffairs.org/cgi/content/full/hlthaff.25.w378v1/DC1

 

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