Multiple Chronic Conditions, Race Impact Diabetes Medicare Spending

November 04, 2020 - Medicare spending on diabetes is in part a result of whether or not the beneficiary has multiple chronic conditions, but there are other factors that strongly influence costs as well, researchers found in a study published in the American Journal of Managed Care.

Diabetes is among the most expensive conditions in the US and has been for years. A 2017 study found that costs were around per $237 billion and 61 percent of that cost was in the population of those ages 65 years and older.

The disease is often accompanied by or leads to multiple other chronic conditions.

It should come as no surprise that these additional chronic conditions only increase costs for beneficiaries with diabetes and their payers. Forty percent of costs for those with type 2 diabetes are tied to vascular comorbidities that arose from the beneficiary's diabetes.

The questions remain: how much does having multiple chronic conditions increase costs and what other factors drive healthcare spending for this disease?

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Researchers looked at claims data from Medicare beneficiaries with type 2 diabetes in Michigan to assess the answer.

“Most research considers effects of comorbidities by simply counting numbers of comorbidities or by considering 1 or 2 additional comorbidities to T2D,” the researchers explained.

“We take this a step further by including 6 additional chronic conditions that are leading causes of death (LCD) in Michigan to determine which combinations of multiple chronic conditions (MCC) influence hospital outpatient, acute inpatient, skilled nursing, hospice, and Part D drug payments.”

Aside from diabetes, the six chronic conditions that are leading causes of death in Michigan—and elsewhere in the US—are heart disease, cancer, chronic lower respiratory disease, stroke, Alzheimer’s disease, and nephritis or chronic kidney disease.

The researchers observed these six conditions in combination with diabetes. For three of the conditions, however, they used a proxy, such as observing congestive heart failure, as a measure for heart disease.

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The study compared beneficiaries with one, two, three, or four of these six conditions in addition to type 2 diabetes to beneficiaries who had strictly type 2 diabetes and no record of the six other conditions.

“The presence of multiple chronic conditions increases the odds of any payments being made for services, as well as the mean spending in multiple service categories,” the researchers noted. “However, patient characteristics, especially race, are also associated with variation in total spending for services.”

Overall, the mean annual costs ranged from slightly over $3,000 for hospital outpatient costs to more than $20,400 for acute inpatient costs.

As might be expected, the odds of higher spending increased when a patient with type 2 diabetes also had multiple chronic conditions, as compared to a beneficiary with solely type 2 diabetes. Drug spending, in particular, was higher for patients who had type 2 diabetes and congestive heart failure, chronic obstructive pulmonary disease, stroke, and chronic kidney disease.

However, surprisingly, hospital outpatient spending was higher for patients who only had type 2 diabetes. The researchers suggested that this result called for greater research on the need for higher-acuity services for beneficiaries with type 2 diabetes and multiple chronic conditions.

READ MORE: Medicare Diabetes Prevention Program May Have Cost Concerns

“When considering the MCC combinations, we generally observed that with every combination, mean acute inpatient, skilled nursing, hospice, and Part D drug spending increased,” the researchers stated.

Rural beneficiaries are more likely to spend on hospital outpatient and Part D drug spending. Men are more likely to have no spending except in hospice, which may be due to the fact that men are less likely to go to the doctor, observe medication adherence, or seek hospice or skilled nursing services.

But the results were perhaps most starkly outlined by the racial distinctions.

“In general, Black, Asian/Pacific Islander, and Hispanic beneficiaries have higher odds of no spending in each category, respectively, compared with White beneficiaries,” the researchers found.

White beneficiaries were more likely to spend on treatment than minority beneficiaries. For example, Asian and Pacific Islander beneficiaries had 78 percent higher chance of no hospice spending than White beneficiaries.

Black beneficiaries were two percent more likely not to spend on acute inpatient treatment than White beneficiaries. This population was also 27 percent more likely to have no Part D drug spending than the White population.

In the Hispanic community, beneficiaries were more likely to spend on Part D drugs than White beneficiaries (17 percent more likely).

American Indian and Alaska Native beneficiaries were not consistent in their likelihood to spend, being more likely than White people to spend on hospital outpatient and acute inpatient services, but less likely to spend on hospice services.

Yet despite being less likely to spend on treatment, the mean expected spending for minority beneficiaries increased across hospital outpatient, acute inpatient, skilled nursing, and hospice.

“Minority beneficiaries have lower odds of any spending, possibly due to not seeking care, but when services are provided, spending is higher, on average, compared with White beneficiaries,” the researchers reasoned.

The amount to which they spent more, however, varied broadly by race and service category.

Hispanic beneficiaries saw two percent higher mean expected spending than White beneficiaries, whereas Black beneficiaries had 22 percent higher mean expected spending than White beneficiaries for acute inpatient care. Drug spending trended lower.

Spending for most minority beneficiaries was lower than White beneficiaries when it came to hospice care, however.

American Indian and Alaska Native beneficiaries are the exception in that they had a lower mean expected spending for acute inpatient, hospital outpatient, and hospice services but a slight increase in mean expected spending for skilled nursing care.

The results demonstrate the need for tools that patients can use to manage multiple chronic conditions at once. They also point toward more racial disparities in Medicare that demand payers’ attention and correction.