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Chronic care costs in managed care

P Fishman1, M Von Korff, P Lozano

  • 1Center for Health Studies, Group Health Cooperative (GHC) of Puget Sound, USA.

Health Affairs (Project Hope)
|May 1, 1997
PubMed
Summary

Chronic conditions significantly increase healthcare costs for adults in health maintenance organizations (HMOs), costing at least double compared to those without. Costs rise 80%-300% based on individual health profiles.

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Area of Science:

  • Health Economics
  • Public Health
  • Managed Care Analysis

Background:

  • Healthcare cost analysis is crucial for understanding economic burdens.
  • Previous research primarily focused on fee-for-service models.
  • The growing prevalence of managed care necessitates analysis within this sector.

Purpose of the Study:

  • To estimate healthcare costs for adults with chronic conditions in a staff-model health maintenance organization (HMO).
  • To quantify the cost difference between adults with and without chronic conditions within an HMO.
  • To provide economic insights relevant to the expanding managed care market.

Main Methods:

  • Analysis of healthcare costs for continuously enrolled adults in a large staff-model HMO during 1992.
  • Categorization of adults based on the presence of at least one chronic condition.
  • Calculation of cost differentials based on age, sex, and specific chronic condition profiles.

Main Results:

  • Over one-third of adults in the HMO had at least one chronic condition in 1992.
  • Adults with chronic conditions incurred healthcare costs at least twice as high as those without.
  • A chronic condition diagnosis increased expected costs by 80%-300%.

Conclusions:

  • Chronic conditions represent a substantial cost driver within managed care settings.
  • Economic analyses must increasingly focus on the health maintenance organization (HMO) market segment.
  • Findings highlight the economic impact of chronic illness in managed care populations.

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