Medicare Payments: How Much Do Chronic Conditions Matter?

CMS: June 18, 2013

Objective: Analyze differences in Medicare Fee-for-Service utilization (i.e., program payments) by beneficiary characteristics, such as gender, age, and prevalence of chronic conditions.

Methods: Using the 2008 and 2010 Chronic Conditions Public Use Files, we conduct a descriptive analysis of enrollment and program payments by gender, age categories, and eleven chronic conditions.

Results: We find that the effect of chronic conditions on Medicare payments is dramatic. Average Medicare payments increase significantly with the number of chronic conditions. Finally, we quantify the effect of individual conditions and find that “Stroke / Transient Ischemic Attack” and “Chronic Kidney Disease” are the costliest chronic conditions for Part A, and “Cancer” and “Chronic Kidney Disease” are the costliest for Part B.   Read more