The rise in spending among Medicare beneficiaries: the role of chronic disease prevalence and changes in treatment intensity

Abstract

We examine the impact of the rise in treated disease prevalence on the growth in Medicare beneficiaries' health care spending. Virtually all of this spending growth is associated with patients who are under medical management for five or more conditions. This is traced to both a rise in true disease prevalence and changes in clinical treatment thresholds. Using the metabolic syndrome as a case study, we find that the share of patients treated with medications has increased 11.5 percentage points in less than ten years. This raises important questions about the "fit" of how Medicare pays for services for complex medical management.