High cost HMO enrollees. Analysis of one physician's panel

This report examines health care costs in the panel of one HMO physician in relation to enrollee health status. High cost enrollees, 15% of the practice panel, accounted for 64% of total costs. For all 722 patients included in the study, the components of costs were: ambulatory visits, 40% of total costs; impatient care, 31%; pharmacy services, 10%; radiology services, 5%; and laboratory services, 4%. Patients with severe physical disease (8% of all enrollees) accounted for about one-third of total costs, while those with moderate physical disease (27% of all enrollees) accounted for an additional one-third. Patients treated for 12 chronic conditions accounted for almost two-thirds of total costs. These conditions were (in order of the contribution of patients with each condition to total costs): hypertension, cancer, abdominal pain, heart disease, diabetes, back pain, headache, depression, arthritis, chronic obstructive pulmonary disease, fatigue, and anxiety. Enrollees treated for one or more of these 12 conditions (37% of the practice panel) accounted for 61% of the high cost enrollees and 63% of total costs. Controlling health care costs will require cost effective systems of care for these common chronic conditions. At present, HMOs typically rely on individual providers to manage these common chronic conditions on a case by case basis, rather than organizing clinic-and HMO-wide systems of care. HMO research and quality improvement programs aimed at improving cost effectiveness might productively focus on how practice teams, clinics and the delivery system as a whole could improve the management of the common chronic conditions which affect high cost enrollees.