Press Release

Embargoed Until Contact

February 18, 2010
12:01 AM PST

Sue Ducat
Director of Communications
(301) 841-9962


From Health Affairs

Unexpected Reasons For Medicare Spending Increases, 1987-2006


Bethesda, MD - An article published today by Health Affairs finds that the causes of Medicare spending growth have changed dramatically over the past two decades. Twenty years ago, most of the increases were due to inpatient hospital services, especially for heart disease, but recent annual increases are the result of outpatient treatment of chronic conditions such as diabetes, arthritis, hypertension, and kidney disease.

Chronic Conditions Account For Rise In Medicare Spending From 1987 To 2006
By Kenneth E. Thorpe, Lydia L. Ogden, and Katya Galactionova

Thorpe, Ogden, and Galactionova are affiliated with the Rollins School of Public Health at Emory University in Atlanta. Ogden is on assignment from the Centers for Disease Control and Prevention.

This study analyzed data about disease prevalence and about level of and change in spending on the ten most expensive conditions in the Medicare population from 1987, 1997, and 2006. The data were drawn from the 1987 National Medical Expenditure Survey (NMES), and the 1997 and 2006 Medical Expenditure Panel Survey (MEPS). Among the key findings: heart disease ranked first in terms of share of growth from 1987 to 1997. However, from 1997 to 2006, heart disease fell to tenth, while other medical conditions -- diabetes the most prevalent -- accounted for a significant portion of the rise. Furthermore, the authors postulate that increased spending on diabetes and some other conditions results from rising incidence of these diseases, not increased screening and diagnoses. Conclude the authors: "The changing mix of medical conditions driving the rise in Medicare spending had consequential effects. More than half of the beneficiaries are treated for five or more chronic conditions each year. System fragmentation means that chronically ill patients receive episodic care from multiple providers who rarely coordinate the care they deliver, and chronic disease management programs are notably absent in traditional fee-for-service Medicare. As Congress, the administration, providers, insurers, and consumers debate reshaping the U.S. health system, they must address these changed health needs through evidence-based preventive care."

There will be a briefing on Tuesday, February 23, 2010, from 9:00 to 10:00 a.m. at the National Press Club in Washington, D.C., to discuss the findings of this paper. The event will be sponsored by the Peter G. Peterson Foundation. Speakers will include the Hon. David Walker, President and CEO of the Peterson Foundation, and Kenneth Thorpe, Ph.D., the lead author of this paper and the executive director of Emory University's Center for Entitlement Reform. The moderator will be Mary Rubino, a senior editor at Health Affairs. For more information or to RSVP, contact Katherine Klein at (202) 727-8954 or
About Health Affairs

Health Affairs, published by Project HOPE, is the leading journal of health policy. Beginning in January 2010, the peer-reviewed journal appears each month in print, with additional Web First papers published weekly at The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.