Characteristics And Spending Patterns Of Persistently High-Cost Medicare Patients

One strategy for reducing health care spending is to target the Medicare beneficiaries who remain persistently high cost over time. Using a 20 percent sample of Medicare fee-for-service beneficiaries in the period 2012-14, we sought to identify the proportion of patients who remained persistently high cost (that is, in the top 10 percent of spending each year) and determine the characteristics and spending patterns that differentiated them from other patients. We found that 28.1 percent of patients who were high cost in 2012 remained persistently high cost over the subsequent two years. On average, persistently high-cost patients were younger, more likely to be members of racial/ethnic minority groups, eligible for Medicare based on having end-stage renal disease, and dually eligible for Medicaid, compared to transiently and never high-cost patients. Persistently high-cost patients had greater relative spending on outpatient care and medications, while very little of their spending was related to preventable hospitalizations. Health care systems and policy makers can use this information to better target spending reductions and care improvements over time.