Study: Tailored care may be best for high-cost Medicare patients

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Proposed healthcare reform policies to rein in Medicare costs might not have much effect on high-cost patients who consume most resources. Instead, interventions tailored to improve care and lower costs for specific types of complex, costly patients may hold greater potential for reducing costs and improving care, according to a study published online Feb. 11 in Health Services Research.

In the study, James D. Reschovsky, PhD, senior health researchers at Center for Studying Health System Change, and colleagues examined patient data to identify factors associated with the cost of treating high-cost Medicare beneficiaries. The researchers analyzed claims data from a national sample of approximately 1.6 million elderly Medicare beneficiaries linked to 2004–2005 Community Tracking Study Physician Survey respondents, and local market data.

Among their findings:

  • Health was the predominant predictor of costs among high-cost beneficiaries, not geographic location.
  • Most physician and practice factors—including provider supply—were "insignificant or weakly related to cost," as were many market factors, according to the authors.
  • More than one in five Medicare beneficiaries receives care in different areas during the year, and significantly higher costs are associated with these patients. 

“This result suggests that any geographic-based policy needs to be mindful that there are no natural boundaries to local healthcare markets and that a very substantial portion of beneficiaries will use providers in multiple ‘markets,’ however defined,” the study authors stated.