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Prevalence and Costs of
Chronic Disease in a Health Care System Structured for Treatment
of Acute Illness1
James H. Thrall, MD
http://radiology.rsnajnls.org/cgi/content/full/235/1/9
1 From the Department of Radiology, Massachusetts General
Hospital, 55 Fruit St, Boston, MA 02114. Received October 14,
2004; revision requested November 10; revision received December
9; accepted December 28. Address correspondence to the author
(e-mail: jthrall@partners.org).
Chronic illnesses account for 70% of deaths and for the
expenditure of over 75% of direct health care costs in the
United States, according to the Centers for Disease Control and
Prevention of the U.S. Department of Health and Human Services
(1). Direct costs are now estimated at over $1.5 trillion (2).
Indirect costs of chronic diseases, in the form of lost
productivity and nonreimbursed personal costs, add several more
hundreds of billions of dollars each year. In a landmark study
published in 1996, Hoffman et al (3) reported that in 1990 90
million people in the United States lived with a chronic disease
or condition and 39 million people had more than one such
condition. Extrapolating from these and other data, the Centers
for Disease Control and Prevention estimated that as many as 25
million Americans have a chronic condition that is disabling
(1). Although the literature does not support a single uniform
definition for chronic disease, recurrent themes include the
non–self-limited nature, the association with persistent and
recurring health problems, and a duration measured in months and
years, not days and weeks (3,4).
Since the prevalence of chronic diseases increases with age,
increased longevity is a major contributor to the high and
steadily rising prevalence of chronic diseases and the aggregate
costs of care for people with them. At the turn of the 19th
century, the life expectancy at birth for people in the United
States was just over 47 years (5). One century later, life
expectancy had increased to 77 years, an astonishing 30-year, or
64%, increase. The number of people in the country over 65 years
of age increased from 3 million to 35 million (6).
Substantial contributions to increased longevity have come from
advances in medicine, especially reduced infant mortality and
the treatment and prevention of infectious diseases. Other
important contributions have come from advances in public health
measures, including improved sanitation and purification of
water supplies. With people living longer, many diseases and
conditions such as arthritis; cardiovascular ailments; and
neurodegenerative diseases, including Alzheimer disease, have
time to manifest.
Moreover, many diseases that were fatal in the past, such as
type I diabetes, acquired immunodeficiency syndrome, and a
number of cancers, have been converted to chronic conditions
with prolonged courses and resulting in substantially improved
life expectancy. This phenomenon has also contributed to the
increase in the prevalence of chronic disease. Some of the
diseases that have been converted from acutely fatal to
manageable chronic conditions are very costly to treat over
their full courses.
Prevalence of Chronic Disease
Input data for estimates of the prevalence of chronic disease
come from a variety of sources, including data from population
surveys and reviews of insurance claims, which typically record
the reasons for which patients have sought care and/or the
diagnoses associated with the care episode. The ninth revision
of the International Classification of Diseases, Clinical
Modification (ICD-9-CM) (7) is probably the most widely used
recording instrument in health status surveys. ICD-9-CM coding
is also used widely in the processing of insurance claims. Since
each disease or reason for care delivery has associated ICD-9-CM
codes, the respective prevalence of diseases can be readily
determined for any given data source that uses the ICD-9-CM
system.
The National Health and Nutrition Examination Survey (8) and the
Medical Expenditure Panel Survey (formerly, National Medical
Expenditure Survey) (9) are two important surveys that provide
nationally representative information about disease prevalence
and costs for the entire population. Data on Medicare claims
provide extensive information for persons over 65 years of age.
Insurance data for younger populations are fragmented between
carriers and are more difficult to access.
The sample sizes required for adequate statistical sampling and
the complexity and cost of obtaining survey data preclude
comprehensive annual surveys or studies of insurance claims
data. As a consequence many, if not most, published estimates of
disease prevalence are based on extrapolations from periodically
available survey data to account for changes over time in
factors such as population growth and changing age distribution.
Given the number of challenges in obtaining timely high-quality
input data and the need to extrapolate to fill in time gaps,
estimates of disease prevalence should probably be regarded as
broadly indicative and directional rather than precise.
Nonetheless, the magnitude of the population burden of chronic
disease is eye opening and encompasses every organ system.
The American Heart Association, drawing on a number of data
sources, estimated that a total of 64.4 million Americans have
one or more types of cardiovascular disease (10). Hypertension
alone, defined as a systolic pressure above 140 mm Hg and/or
diastolic pressure greater than 90 mm Hg, accounts for
afflictions in 50 million people (10). Coronary heart disease
affects 13.2 million people, manifesting as acute myocardial
infarction in 7.8 million and as chest pain syndromes in 6.8
million (some people experience both, which accounts for the
higher sum of the components vs the overall prevalence) (10).
Five million people live with congestive heart failure, and 4.8
million have strokes each year (10). Cardiovascular diseases,
including stroke, accounted for around 40% of all deaths in the
United States in 2001 and were considered a contributing factor
in another 20% (11).
Another category of chronic disease with a very high prevalence
is arthritis, which is estimated to afflict 50–70 million
Americans (12,13). The lower end of the range includes people
with physician-diagnosed arthritis, and the higher end comes
from population surveys in which people were asked to report
symptoms of joint disease. Disability due to arthritis and back
pain is substantial (1). Arthritis and back pain account for
over one-third of all non–mental illness–related disability
among persons over the age of 15 years in the United States (1).
A report issued by the National Institute of Arthritis and
Musculoskeletal and Skin Diseases (12) noted that the number of
Americans with some form of documented arthritis will increase
by 50% by the year 2020, owing to the aging of the population,
and that there will be an increasing burden not just to
individuals but to the economy.
Other numerically important chronic diseases are asthma (14),
with an estimated 15 million individuals affected, and diabetes
(15,16), with an estimated 17–18 million people affected,
including almost 6 million who have not been formally diagnosed.
Both of these diseases are associated with substantial
disability.
Chronic neurodegenerative diseases are also widely prevalent.
These conditions are often challenging to diagnose correctly and
are among the most difficult to manage because of their effect
on both patients and families. An estimated 4 million Americans
have Alzheimer disease (17), a condition that robs people of
their ability to remember and reason and therewith steals their
human identity. Parkinson disease (18) affects 1.5 million
people in the United States.
Blindness and hearing loss are chronic conditions that both will
increase with the aging of the population. A longitudinal study
by Lee et al (19) in 20 325 representative Medicare
beneficiaries demonstrated an increasing prevalence of three
major eye diseases—macular degeneration, glaucoma, and diabetic
retinopathy—over a 9-year period of study. Half of the surviving
cohort had at least one of the diseases.
Mental disorders are also often difficult to diagnose or even to
classify as chronic or acute. The Surgeon General of the United
States estimated (20) that 19% of the population manifests
evidence of a mental disorder within a given year, 3% have
addictive and mental disorders, and 6% have addictive disorders
alone, for a total of approximately 30% of the total population.
Severe depression is a major cause of disability and lost days
from work.
Direct and Indirect Costs Associated with Chronic Disease
In the study by Hoffman et al (3), the costs of caring for
patients with chronic diseases were projected for the year 1990.
The estimated total cost for care of patients with chronic
diseases was $659 billion, divided between direct costs of $425
billion and indirect costs of $234 billion, a ratio of just
under 2:1.
Direct costs of care were determined (3) by reviewing insurance
payments and other payments to individual providers and provider
organizations for care episodes and payments for the purchase of
prescribed medicines and other medical equipment or supplies.
All costs of care for a person with chronic disease were
considered chronic care costs, whatever the actual reason for
the care. The encompassing nature of this definition has not
been explicitly noted in subsequent references to this work,
although, by any measure, the costs for the care of chronic
disease would still be staggering, even with a more restrictive
definition.
Indirect costs, although real, are more difficult to determine
and are highly dependent on definition and even philosophy.
Hoffman et al (3) defined them broadly in terms of morbidity and
mortality costs. Morbidity costs were defined as lost economic
output from days of missed work and imputed costs for home care
by family members or others not in the labor force. Mortality
costs also encompassed projected economic losses, assuming that
an individual would have remained gainfully employed over his or
her otherwise estimated life expectancy, for work absent the
cause of death.
Chronic Disease and the Structure of the U.S. Health Care System
There are a number of features of the current health care system
in the United States that impede efficient high-quality care of
patients with chronic disease or who are at risk for developing
a chronic disease. Most important, despite the high prevalence
of chronic diseases, the health care system in the United States
is still fundamentally designed to deliver ad hoc episodic care
to patients with acute illness or acute manifestations of
chronic illness. Acute care hospitals dominate the
organizational structure of the health care system and account
for over 30% of health care expenditures (2).
The heavy inpatient focus of hospitals is not cost-effective for
the management of chronic disease; from a hospital perspective,
chronic disease is too often managed as a series of admissions
for acute exacerbations. Data for diseases such as asthma and
congestive heart failure (4,14,21–23) clearly indicate that cost
savings and quality improvements come from what happens over the
long term outside of hospitals to prevent acute episodes from
occurring. The health care system, as currently structured, is
at its best when an acutely ill patient presents for care of an
acute illness or condition or when a patient with a diagnosed
condition requires an elective procedure or other therapy.
Hospitals too often treat their outpatient activities as
secondary adjuncts to their core inpatient missions or as "loss
leaders" for high-revenue admissions and have not come close to
redesigning their activities for the contemporary needs of
patients with chronic disease through adoption of
disease-management programs and comprehensive information
systems. Outpatient facilities built on hospital campuses can be
burdened with the high cost structure and overhead of associated
inpatient facilities, which discourages robust investment in
lower-margin outpatient care. Hospitals are only now investing
in electronic medical records systems that encompass outpatient,
as well as inpatient, care for patients. Such systems are
necessary for the efficient organization and tracking of
long-term care of chronic disease.
Many physicians’ practices are also still organized, in large
part, in relationship to hospitals on the basis of employment or
staff privileges, especially in academic and metropolitan
settings. Practice patterns for these physicians will be highly
influenced by hospital dominance of the delivery system for the
foreseeable future. Forty percent of physicians in community
practice settings are in solo practice. They are fragmented
organizationally and have no structural basis through which to
deliver coordinated care: no common medical records system or
way to track disease progress together. Hospitals and large
physician groups are the only nongovernmental provider
organizations, in the aggregate, with access to the substantial
amounts of capital resources required for creating new care
paradigms to manage chronic disease, including investment in
information technology.
A second major set of issues deals with payment systems for
health care. The dominant payment mechanism, even many decades
after the concepts of managed health care and capitation were
introduced, continues to be fee-for-service payment. The units
of service are typically defined by the Current Procedural
Terminology (CPT) (24) system maintained by the American Medical
Association.
The structure of fee-for-service payments for CPT-coded
procedures does not come close to adequately rewarding efforts
by physicians, hospitals, or other health care organizations for
prevention programs, including counseling and patient education.
The CPT-based fee-for-service system does not allow payment for
many of the specific services known to improve quality and
reduce overall costs, such as home monitoring of patients with
congestive heart failure. Insurance companies will pay for
treatment of pulmonary edema in a hospital but not for a phone
call to see how a patient is doing at home. Gruman and Gibson
(23) noted, "Insurance, for example, will pay for the amputation
of a limb for diabetes related gangrene but not for the
sustained diabetes self-management and monitoring that can
lessen the probability of needing more costly interventions
later." The majority of reimbursable CPT codes are for services
rendered in the treatment of acute illness or of acute
exacerbations and complications of chronic conditions.
In the current fee-for-service reimbursement system, providers
who manage chronic diseases effectively risk losing out twice:
first, because the payment system typically does not compensate
them for the extra costs associated with more effective
management and, second, because the savings (due to more
effective management) from reduced hospitalizations and reduced
treatment of long-term complications remain with the insurance
company and are not passed on to the provider who did the extra
work to provide better care. These are powerful financial
disincentives to providers and hospitals that earn their revenue
service by service and admission by admission. Likewise,
fee-for-service discourages the kind of teamwork between
physicians that is desirable in caring for many patients with
complex problems. Pay-for-performance systems are beginning to
address the need for payers to share savings from more effective
care with providers and to reward providers for achieving better
results.
The ability to use insurance-premium dollars wisely to maintain
health through preventive services and the ability to reduce
long-term health care costs by reducing the likelihood of future
illness would appear to be a reasonable strategy for insurance
companies and is one of the fundamental assumptions underlying
the concept of health maintenance organizations (HMOs). In
capitation arrangements with HMOs, providers receive contracted
payments and accept risk for the costs of delivering needed
care. In theory, more money spent up front on prevention should
be cost-effective and reduce downstream costs. However, in the
report of the National Committee for Quality Assurance, The
State of Health Care Quality: 2004 (22), major gaps between best
practices and health plan performance continued to be observed,
including gaps in indicators for chronic disease. For control of
high blood pressure, the average performance among the health
care plans surveyed was only 62%. At the 90th percentile,
control was achieved in 71% of patients. The National Committee
for Quality Assurance asserts (22) that if all Americans with
hypertension received care at even the 90th percentile of
performance, 15 000–26 000 deaths annually could be prevented
and sick days could be reduced by more than 21 million.
Why, then, has there not been more interest by insurance
companies in providing and even insisting on more preventive
services for patients with chronic disease and implementation of
comprehensive disease-management programs by providers, and why
have HMOs not scored better on the National Committee for
Quality Assurance surveys? While the complete answer is complex,
one obvious point is that the high turnover of clients from year
to year is a disincentive for insurance companies, as well as
for HMOs, to invest in preventive care. Simply put, if a client
changes insurance coverage, some organization downstream is more
likely to benefit from the salutary effects of the investment in
prevention, so why spend the money? The Kaiser Family Foundation
survey (25) of employer health benefits for 2004 reported that
56% of firms that offer health care benefits shopped for a new
plan and that 31% of those changed insurance carriers. This is
hardly a prescription for long-term investment by an insurance
company, but it raises the interesting question of why employers
are not pushing harder from their side to realize long-term
benefits of better preventive care. New employer-initiated
pay-for-performance plans such as Bridges to Excellence are
beginning to address this point.
Radiology and Chronic Disease
Imaging services are obviously of direct importance in the
diagnosis and long-term management of many chronic diseases and
conditions. Cancer care is heavily structured to involve
imaging, and multi–detector row computed tomography (CT) is
opening new doors in many areas, including the heart and
vascular system. Imaging is literally the guiding hand for
diagnosis of musculoskeletal disease.
At the same time, relatively little investment has been made in
the study of the optimum use of imaging or how to integrate
imaging into evidence-based disease-management programs of the
kind highlighted by the Institute of Medicine in its landmark
publication, Crossing the Quality Chasm: A New Health System for
the 21st Century (4). Radiologists will need to address these
issues in a much more robust way than in the past because of
increasing pressures to reduce overutilization of all medical
services, especially rapidly growing ones such as imaging. How
often should imaging be applied? which method should be used?
and how much radiation is acceptable? are all questions germane
to the care of people with chronic disease who are likely to
need imaging services over a period of time.
The establishment of the American College of Radiology Imaging
Network (ACRIN) (26) under the direction of Bruce Hillman, MD,
is an important step in the direction of strengthening
technology-assessment research in imaging. ACRIN has initiated
clinical trials aimed at establishing the efficacy and,
therefore, the role of emerging imaging methods. Current trials
address questions of major interest, such as the role of digital
mammography versus screen-film mammography and that of CT
colonography versus conventional colonoscopy. A major trial is
underway to assess the costs and benefits of radiography versus
those of lung CT imaging for lung cancer. Broad participation by
radiologists benefits ACRIN by increasing patient recruitment
into trials and is highly encouraged.
Restructuring the Health System for Care of Chronic Disease
The issue of chronic disease is not going to go away; quite the
opposite, the number of affected people will increase, as will
costs. Chronic diseases are especially hard on the elderly
because they result in disability and diminished quality of life
(6). Much of the knowledge is in hand to achieve better outcomes
and reduce costs in the care of people with chronic diseases:
Better prevention, more patient education, involvement in
self-help and empowerment, systematic use of evidence-based
disease-management programs, closer adherence to best practices,
information systems with patient-focused electronic records to
track disease progress and therapy, and a team approach by
physicians and other care givers are all proven winners
(14,16,21–23). The health care system in the United States, now
dominated by inpatient facilities, needs to recast its basic
mission as that of keeping people out of hospitals through
life-long health care programs and the prevention of
complications of chronic diseases.
Paying for the care required in unnecessary episodes of acute
illness because of gaps in preventive care will reward failure
and increase overall health care costs and may create
disincentives for individual providers to optimize long-term
care of people with chronic conditions. Adherence to proven best
practices must be a commitment made by every physician and
provider organization. The payment system must be rebuilt to
reward providers for keeping people as healthy as possible and
out of hospitals as much as possible, whether these are
accomplished through pay-for-performance plans or other
approaches. Until the financial incentives are aligned to
compensate providers for doing that, it will not happen enough.
The reimbursement system must recognize and reward the extra
work and infrastructure investments necessary to achieve
improved quality in the care of patients with chronic disease.
All stakeholders in the health care system—including patients,
providers, payers, the public, and the government—should now
recognize the growing imperative of caring for people with
chronic diseases and should come together to design better
structures for lifelong continuity of care, with emphasis on
evidence-based practice and disease prevention.
FOOTNOTES
Author stated no financial relationship to disclose.
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