At the Intersection of Health, Health Care and Policy Cite this article as: Patricia Neuman, Juliette Cubanski and Anthony Damico Medicare Per Capita Spending By Age And Service: New Data Highlights Oldest Beneficiaries Health Affairs, , no. (2015): doi: 10.1377/hlthaff.2014.1371
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Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD 20814-6133. Copyright © 2015 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved.
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Web First By Patricia Neuman, Juliette Cubanski, and Anthony Damico 10.1377/hlthaff.2014.1371 HEALTH AFFAIRS 34, NO. 2 (2015): – ©2015 Project HOPE— The People-to-People Health Foundation, Inc.
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DATAWATC H
Medicare Per Capita Spending By Age And Service: New Data Highlights Oldest Beneficiaries Medicare per capita spending for beneficiaries with traditional Medicare over age 65 peaks among beneficiaries in their mid-90s and then declines, and it varies by type of service with advancing age. Between 2000 and 2011 the peak age for Medicare per capita spending increased from 92 to 96. In contrast, among decedents, Medicare per capita spending declines with age.
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s the US population ages and more people on Medicare live into their 80s, 90s, and beyond, analysts and policy makers are examining the impact of these trends on the federal budget and the Medicare program. At the same time, geriatricians and other providers who care for older patients are paying greater attention to the question of how best to meet the needs of an aging population. By 2050 the number of people on Medicare ages 80 and older will nearly triple; the number of people in their 90s and 100s will quadruple.1–3
To inform discussions about Medicare’s role in providing coverage for an aging population and to assess the relationship between Medicare spending and advancing age, this article presents findings from an analysis of Medicare per capita spending among beneficiaries over age 65 in traditional Medicare, by age and type of service.4 Our main findings are shown in Exhibit 1 and discussed in detail below. Previous studies have reported an increase by age in Medicare per capita spending,5,6 beneficiaries’ out-of-pocket spending,7 and Medicaid spending.8 However, they have not examined
Patricia Neuman (tneuman@ kff.org) is senior vice president and director of the Program on Medicare Policy at the Henry J. Kaiser Family Foundation, in Washington, D.C. Juliette Cubanski is associate director of the Program on Medicare Policy at the Henry J. Kaiser Family Foundation. Anthony Damico is an independent consultant in Bethesda, Maryland.
Exhibit 1 Medicare Per Capita Spending For Traditional Medicare Beneficiaries Over Age 65, By Age And Survival Status, 2011
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES Average per capita spending in 2011 for all traditional Medicare beneficiaries over age 65 (“all beneficiaries”) was $9,839; for the subset of those beneficiaries who were still alive at the end of 2011 (“full-year survivors”), it was $8,647. The analysis excluded beneficiaries with Medicare Advantage. The analysis also excluded traditional Medicare beneficiaries age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this age.
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Web First Medicare per capita spending in depth, categorizing it by beneficiaries’ age and type of service and including trends over time. We examine the following questions: What is the trajectory of Medicare per capita spending by age, at what age does spending peak, and has the peak age changed over time? How does Medicare per capita spending by age vary for specific Medicare-covered services? What is the pattern of per capita spending by age among decedents?
Study Data And Methods
◀
16,145
$
Per person Average Medicare per capita spending was $16,145 for 96-year-olds, compared to $7,566 for 70-year-olds.
We analyzed 2000–11 data from a 5 percent sample of claims for Medicare-covered services under Parts A, B, and D from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services (CMS).We calculated per capita spending by age for traditional Medicare beneficiaries ages 66 and older, overall and by type of service. The unweighted number of beneficiaries in 2011 declined from 96,517 people age 66 (weighted n ¼ 1; 930; 340) to 245 people age 104 (weighted n ¼ 4; 900). We excluded people age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this year of age. We excluded Medicare Advantage enrollees because comparable data on Medicare spending by service are not available for this population.
Exhibit 2 Distribution Of Traditional Medicare Beneficiaries And Distribution Of Medicare Spending On Them, By Age, 2011
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The analysis excluded beneficiaries with Medicare Advantage. In 2011 there were 38.3 million traditional Medicare beneficiaries, and spending on them was $375 billion (based on data from the 5 percent sample of Medicare claims for 2011, listed as this exhibit’s source).
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Study Results Per Capita Spending By Age In 2011 Medicare per capita spending increased with age (Exhibit 1). Spending peaked at age 96 and then declined gradually for the relatively small number of older beneficiaries. Average Medicare per capita spending for beneficiaries age 96 ($16,145) was more than double that for beneficiaries age 70 ($7,566). This spending pattern persisted even when we excluded decedents from the analysis: Among beneficiaries who lived a full year in 2011, Medicare per capita spending also increased with age and peaked at age 96 ($14,278) before falling. Since 2000, the age at which Medicare per capita spending has peaked has increased, from 92 in 2000 to 96 in 2011. The amount of Medicare per capita spending at the peak age has also increased, from $9,557 in 2000 (adjusted for inflation) to $15,015 in 2011 if Part D is excluded, and to $16,145 including Part D (trend data not shown).4 Share Of Beneficiaries And Share Of Spending Medicare beneficiaries ages 80 and older accounted for a disproportionate share of traditional Medicare spending (Exhibit 2). In 2011 people in this age group accounted for 24 percent of beneficiaries in traditional Medicare but 33 percent of traditional Medicare spending. In contrast, people ages 65–69 accounted for 26 percent of traditional Medicare beneficiaries but just 15 percent of spending. Per Capita Spending By Service The relatively high per capita spending among beneficiaries in their mid-to-late 90s in 2011 was influenced by spending on skilled nursing facility, hospice, and (to a lesser extent) home health services. When we excluded spending on these services, we found that per capita spending peaked at age 89 (Exhibit 3; specific findings by age are presented in the online Appendix).9 Medicare per capita spending for inpatient care in 2011 plateaued between the ages of 84 and 97, peaking at age 89, before declining (Exhibit 4). For Part B provider, services, and supplies and hospital outpatient services, per capita spending peaked earlier, at age 83, before declining. In contrast, per capita spending for skilled nursing facility and hospice services increased dramatically at older ages. A larger share of older beneficiaries used these services, and older users had higher per capita spending on them. Despite a gradual reduction in Medicare per capita spending for Part B providers, services, and supplies for beneficiaries beginning in their mid-to-late 80s, per capita spending continues to climb into the mid-90s as a result of persistent levels of inpatient hospital spending and a sharp rise in skilled nursing facility and hospice spend-
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Exhibit 3 Medicare Per Capita Spending Overall And By Type Of Service For Traditional Medicare Beneficiaries Over Age 65, By Age Group, 2011 Number of beneficiaries
Age (years)
Unweighted
All 66 or older 1,446,591 66–69 371,764
Spending by type of service
Weighted
Overall spending
Inpatient hospital
Outpatient hospital
Part B providers, services, and supplies
Parts B and D drugs
SNF
Home health
Hospice
28,931,820 7,435,280
$ 9,839 6,316
$3,230 2,077
$1,239 992
$2,336 1,715
$1,255 1,005
$ 911 258
$ 538 208
$ 331 63
70–74
344,928
6,898,560
8,430
2,761
1,261
2,271
1,264
434
331
108
75–79 80–84
265,791 214,988
5,315,820 4,299,760
10,486 12,395
3,523 4,198
1,423 1,432
2,651 2,819
1,376 1,426
787 1,341
515 763
210 415
85–89
148,707
2,974,140
14,109
4,609
1,322
2,803
1,401
2,114
1,086
775
70,591 29,822
1,411,820 596,440
15,174 11,951
4,620 3,256
1,170 768
2,567 1,675
1,354 978
2,741 2,271
1,311 1,058
1,411 1,945
90–94 95 or older
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The analysis excludes beneficiaries with Medicare Advantage. SNF is skilled nursing facility.
ing in the late 80s and 90s. Between ages 86 and 96, Medicare per capita spending on skilled nursing facility services increased by more than 50 percent (from $2,043 to $3,149) while per capita spending on hospice tripled (from $706 to $2,299) (see the Appendix).9 In percentage terms, as beneficiaries age, a larger share of Medicare per capita spending was devoted to skilled nursing facility and hospice services, and a smaller share to Part B providers and prescription drugs (see the Appendix).9 Spending on inpatient hospital services was a relatively constant share of per capita
spending until beneficiaries reached their late 90s. Spending On Decedents Spending on decedents affected our estimates of Medicare per capita spending by age. However, the age-related spending increase was not entirely attributable to end-of-life care or to higher death rates among older beneficiaries. The pattern of Medicare per capita spending by age was similar with or without decedents in our analysis, although average spending was higher at all ages when decedents were included. This is because average Medicare per capita spending was significantly greater for
Exhibit 4 Medicare Per Capita Spending For Traditional Medicare Beneficiaries Over Age 65, By Type Of Service, 2011
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The analysis excluded beneficiaries with Medicare Advantage. The analysis also excluded traditional Medicare beneficiaries age sixty-five because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this age. Parts B and D drug spending is not shown. SNF is skilled nursing facility. aPart B includes spending for Part B providers, services, and supplies.
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Web First
◀
43,933
$
Per capita Medicare per capita spending among people who died in 2011 declined steadily with age, from $42,933 at age 70 to $20,318 at age 100.
decedents than for those who lived the entire year, both overall—$33,486 (Exhibit 5) versus $8,647 (Exhibit 1)—and at every age. Because of higher death rates among older beneficiaries, average per capita spending among beneficiaries who died at older ages exerted a greater influence on estimates of average Medicare spending among older beneficiaries.10 In contrast to the pattern of Medicare per capita spending observed generally, per capita spending on decedents in traditional Medicare declined steadily with age. In 2011 per capita spending declined from about $43,000 for decedents age 70 to about $20,000 for centenarians who died (Exhibit 5). The change was largely attributable to a reduction in inpatient spending. Limitations This study describes but does not explain the pattern of Medicare per capita spending by age, and it was not designed to assess factors related to the recent slow growth in total and per capita Medicare spending. Because the 5 percent sample we studied included Medicare spending but not spending by other payers, this analysis did not examine how Medicaid and other payers’ spending varied by age, in relation to Medicare spending. The 5 percent sample did not include patients’ characteristics, such as functional impairment. As a result, the analysis did not control for covariates that might help explain patterns in spending and service use. Our results reflect patterns of spending among traditional Medicare beneficiaries, but not
among the total Medicare population. Because we lacked comparable data for the 25 percent of beneficiaries enrolled in Medicare Advantage in 2011, it was not possible for us to assess whether patterns of service use and spending in traditional Medicare applied to the Medicare population overall.
Discussion This article provides new data to inform efforts to improve care management for Medicare’s oldest beneficiaries and related health policy discussions. As adults live into their 80s and beyond, they are more likely to live with multiple chronic conditions and functional limitations, and this combination (compared to having chronic conditions only) is associated with a greater likelihood of emergency department visits and inpatient hospitalizations as well as higher Medicare spending for inpatient hospital, skilled nursing facility, and home health services.11 Thus, it is not surprising that we find that Medicare per capita spending is higher for older seniors than it is for younger ones. Yet the rise in per capita spending for beneficiaries well into their 90s raises questions that are beyond the scope of this analysis: specifically, whether Medicare’s oldest old beneficiaries are getting the appropriate mix of services in the most appropriate setting, and whether more could be done to improve the management and quality of their care.
Exhibit 5 Medicare Per Capita Spending For Traditional Medicare Beneficiaries Over Age 65 Who Died In 2011, By Age 50,000
$42,933
Per capita spending ($)
40,000
$33,486 30,000
$20,318
20,000
10,000
0 65
70
75
80
85
90
95
100
Age (years)
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The dashed orange line indicates the average Medicare per capita spending for traditional Medicare beneficiaries over age 65 who died in 2011 ($33,486). The analysis excluded beneficiaries with Medicare Advantage. The analysis also excluded traditional Medicare beneficiaries age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this age. The numbers of beneficiaries who died in 2011 are as follows: ages 66–69, 0.1 million; ages 70–74, 0.2 million; ages 75–79, 0.2 million; ages 80– 84, 0.3 million; ages 85–89, 0.3 million; ages 90–94, 0.2 million; ages 95–99, 0.1 million; and ages 100 and older, fewer than 0.1 million.
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The Affordable Care Act launched several payment and delivery system reforms that could alter patterns of care and spending for older patients with significant needs, including models to reduce preventable hospitalizations, better manage transitions following hospitalizations, and improve care management for beneficiaries with both Medicare and Medicaid. These efforts, if successful, could lower costs and improve care for Medicare’s octogenarians, nonagenarians, and centenarians. Consistent with findings from older studies focused on end-of-life costs,12,13 we found that Medicare per capita spending was significantly higher for those who died in 2011 than for those who did not. We also found that Medicare per The authors thank Jennifer Huang, a former policy analyst at the Henry J. Kaiser Family Foundation, who
capita spending among decedents declined steadily with age in 2011. This suggests that patients, families, and providers may be opting for less intensive and less costly end-of-life care for beneficiaries at older ages.
Conclusion Further work is needed to better understand the social, medical, and long-term care needs of older Americans and how best to address those needs. Strategies to improve the management of care for high-need, high-cost patients—many of whom are among Medicare’s oldest beneficiaries, and not just those at the end of their lives— are both timely and right on the money. ▪
coauthored the companion report released by the foundation, and Shannon Griffin for help in preparing the
manuscript. [Published online January 14, 2015.]
ternet]. Washington (DC): CBO; 2014 Jul [cited 2014 Dec 10]. p. 41. Available from: http://www.cbo .gov/sites/default/files/45471-LongTermBudgetOutlook_7-29.pdf Yamamoto DH. Health care costs— from birth to death [Internet]. Washington (DC): Health Care Cost Institute; 2013 Jun [cited 2014 Dec 10]. (Health Care Cost Institute Report No. 2013-1). Available from: http://www.healthcostinstitute.org/ files/Age-Curve-Study_0.pdf Cubanski J, Swoope C, Damico A, Neuman T. How much is enough? Out-of-pocket spending among Medicare beneficiaries: a chartbook [Internet]. Menlo Park (CA): Kaiser Family Foundation; 2014 Jul 21 [cited 2014 Dec 10]. Available from: http://kff.org/health-costs/report/ how-much-is-enough-out-of-pocketspending-among-medicarebeneficiaries-a-chartbook/ Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. National Health Expenditure Data [Internet]. Baltimore (MD): CMS. Table 25, Medicaid per-enrollee spending by gender and age group, calendar years 2002, 2004, 2006, 2008, 2010; [cited 2014 Dec 10]. Available from: http://www.cms.gov/ Research-Statistics-Data-andSystems/Statistics-Trends-andReports/NationalHealthExpend Data/Downloads/2010Genderand AgeTables.pdf To access the Appendix, click on the Appendix link in the box to the right of the article online. Among those age 70, Medicare per capita spending was more than six times greater for people who died
during 2011 than for those who did not ($42,933 [Exhibit 4] versus $6,847 [Exhibit 1]). However, just 2 percent of those age 70 died in 2011, so higher spending on them had a modest effect on the average spending for all beneficiaries at that age ($7,566 [Exhibit 1]). In contrast, among those age 90, Medicare per capita spending was two times greater for people who died in 2011, compared to those who survived ($26,687 versus $12,924), but spending on the 13 percent of 90year-olds who died in 2011 had a greater impact on average per capita spending in this age group ($14,745). 11 Komisar HL, Feder J (Georgetown University, Washington, DC). Transforming care for Medicare beneficiaries with chronic conditions and long‐term care needs: coordinating care across all services [Internet]. Long Beach (CA): SCAN Foundation; 2011 Oct [cited 2014 Dec 11]. Available from: http:// www.thescanfoundation.org/sites/ default/files/Georgetown_ Trnsfrming_Care.pdf 12 Calfo S, Smith J, Zezza M. Last year of Life Study [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services, Office of the Actuary; [cited 2014 Dec 11]. Available from: https://www.cms.gov/ Research-Statistics-Data-andSystems/Research/Actuarial Studies/downloads/Last_Year_ of_Life.pdf 13 Riley GF, Lubitz JD. Long-term trends in Medicare payments in the last year of life. Health Serv Res. 2010;45(2):565–76.
NOTES 1 The population age 80 and older was 11.3 million in 2010 and is projected to grow to 30.9 million in 2050. The population age 90 and older was 1.9 million in 2010 and is projected to grow to 8.0 million in 2050. 2 2010 population estimates are from U.S. Census Bureau. Population Division. Vintage 2011: national tables [Internet].Washington (DC): Census Bureau; 2012 May. Table 1, Annual estimates of the resident population by sex and five-year age group for the United States: April 1, 2010 to July 1, 2011 (NC-EST2011-01); [cited 2014 Dec 16]. Available from: https:// www.census.gov/popest/data/ national/asrh/2011/tables/ NC-EST2011-01.xls 3 2050 population estimates are from US Census Bureau, Population Division. 2012 National Population Projections: summary tables. Projections of the population by age and sex for the United States: 2015 to 2060 (NP2012-T12). Middle series [Internet].Washington (DC): Census Bureau; 2012 Dec [cited 2014 Dec 16]. Available from: https:// www.census.gov/population/ projections/files/summary/NP2012T12.xls 4 Henry J. Kaiser Family Foundation. The rising cost of living longer: analysis of Medicare spending by age for beneficiaries in traditional Medicare [Internet]. Menlo Park (CA): KFF; 2015 Jan 14 [cited 2015 Jan 14]. Available from: http://kff .org/medicare/report/the-risingcost-of-living-longer-analysis-ofmedicare-spending-by-age-forbeneficiaries-in-traditional-medicare 5 Congressional Budget Office. The 2014 long-term budget outlook [In-
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The online version of this article, along with updated information and services, is available at: http://content.healthaffairs.org/content/early/2015/01/13/hlthaff.2014.1371.full.html
For Reprints, Links & Permissions: http://healthaffairs.org/1340_reprints.php E-mail Alerts : http://content.healthaffairs.org/subscriptions/etoc.dtl To Subscribe: http://content.healthaffairs.org/subscriptions/online.shtml
Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD 20814-6133. Copyright © 2015 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved.
Advance online articles have been peer reviewed and accepted for publication but have not yet appeared in the paper journal (edited, typeset versions may be posted when available prior to final publication). Advance online articles are citable and establish publication priority; they are indexed by PubMed from initial publication. Citations to Advance online articles must include the digital object identifier (DOIs) and date of initial publication. Not for commercial use or unauthorized distribution Downloaded from content.healthaffairs.org by Health Affairs on February 10, 2015 at NYU MED CTR LIB PERIODICALS DEPT
Web First By Patricia Neuman, Juliette Cubanski, and Anthony Damico 10.1377/hlthaff.2014.1371 HEALTH AFFAIRS 34, NO. 2 (2015): – ©2015 Project HOPE— The People-to-People Health Foundation, Inc.
doi:
DATAWATC H
Medicare Per Capita Spending By Age And Service: New Data Highlights Oldest Beneficiaries Medicare per capita spending for beneficiaries with traditional Medicare over age 65 peaks among beneficiaries in their mid-90s and then declines, and it varies by type of service with advancing age. Between 2000 and 2011 the peak age for Medicare per capita spending increased from 92 to 96. In contrast, among decedents, Medicare per capita spending declines with age.
A
s the US population ages and more people on Medicare live into their 80s, 90s, and beyond, analysts and policy makers are examining the impact of these trends on the federal budget and the Medicare program. At the same time, geriatricians and other providers who care for older patients are paying greater attention to the question of how best to meet the needs of an aging population. By 2050 the number of people on Medicare ages 80 and older will nearly triple; the number of people in their 90s and 100s will quadruple.1–3
To inform discussions about Medicare’s role in providing coverage for an aging population and to assess the relationship between Medicare spending and advancing age, this article presents findings from an analysis of Medicare per capita spending among beneficiaries over age 65 in traditional Medicare, by age and type of service.4 Our main findings are shown in Exhibit 1 and discussed in detail below. Previous studies have reported an increase by age in Medicare per capita spending,5,6 beneficiaries’ out-of-pocket spending,7 and Medicaid spending.8 However, they have not examined
Patricia Neuman (tneuman@ kff.org) is senior vice president and director of the Program on Medicare Policy at the Henry J. Kaiser Family Foundation, in Washington, D.C. Juliette Cubanski is associate director of the Program on Medicare Policy at the Henry J. Kaiser Family Foundation. Anthony Damico is an independent consultant in Bethesda, Maryland.
Exhibit 1 Medicare Per Capita Spending For Traditional Medicare Beneficiaries Over Age 65, By Age And Survival Status, 2011
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES Average per capita spending in 2011 for all traditional Medicare beneficiaries over age 65 (“all beneficiaries”) was $9,839; for the subset of those beneficiaries who were still alive at the end of 2011 (“full-year survivors”), it was $8,647. The analysis excluded beneficiaries with Medicare Advantage. The analysis also excluded traditional Medicare beneficiaries age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this age.
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Web First Medicare per capita spending in depth, categorizing it by beneficiaries’ age and type of service and including trends over time. We examine the following questions: What is the trajectory of Medicare per capita spending by age, at what age does spending peak, and has the peak age changed over time? How does Medicare per capita spending by age vary for specific Medicare-covered services? What is the pattern of per capita spending by age among decedents?
Study Data And Methods
◀
16,145
$
Per person Average Medicare per capita spending was $16,145 for 96-year-olds, compared to $7,566 for 70-year-olds.
We analyzed 2000–11 data from a 5 percent sample of claims for Medicare-covered services under Parts A, B, and D from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services (CMS).We calculated per capita spending by age for traditional Medicare beneficiaries ages 66 and older, overall and by type of service. The unweighted number of beneficiaries in 2011 declined from 96,517 people age 66 (weighted n ¼ 1; 930; 340) to 245 people age 104 (weighted n ¼ 4; 900). We excluded people age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this year of age. We excluded Medicare Advantage enrollees because comparable data on Medicare spending by service are not available for this population.
Exhibit 2 Distribution Of Traditional Medicare Beneficiaries And Distribution Of Medicare Spending On Them, By Age, 2011
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The analysis excluded beneficiaries with Medicare Advantage. In 2011 there were 38.3 million traditional Medicare beneficiaries, and spending on them was $375 billion (based on data from the 5 percent sample of Medicare claims for 2011, listed as this exhibit’s source).
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Study Results Per Capita Spending By Age In 2011 Medicare per capita spending increased with age (Exhibit 1). Spending peaked at age 96 and then declined gradually for the relatively small number of older beneficiaries. Average Medicare per capita spending for beneficiaries age 96 ($16,145) was more than double that for beneficiaries age 70 ($7,566). This spending pattern persisted even when we excluded decedents from the analysis: Among beneficiaries who lived a full year in 2011, Medicare per capita spending also increased with age and peaked at age 96 ($14,278) before falling. Since 2000, the age at which Medicare per capita spending has peaked has increased, from 92 in 2000 to 96 in 2011. The amount of Medicare per capita spending at the peak age has also increased, from $9,557 in 2000 (adjusted for inflation) to $15,015 in 2011 if Part D is excluded, and to $16,145 including Part D (trend data not shown).4 Share Of Beneficiaries And Share Of Spending Medicare beneficiaries ages 80 and older accounted for a disproportionate share of traditional Medicare spending (Exhibit 2). In 2011 people in this age group accounted for 24 percent of beneficiaries in traditional Medicare but 33 percent of traditional Medicare spending. In contrast, people ages 65–69 accounted for 26 percent of traditional Medicare beneficiaries but just 15 percent of spending. Per Capita Spending By Service The relatively high per capita spending among beneficiaries in their mid-to-late 90s in 2011 was influenced by spending on skilled nursing facility, hospice, and (to a lesser extent) home health services. When we excluded spending on these services, we found that per capita spending peaked at age 89 (Exhibit 3; specific findings by age are presented in the online Appendix).9 Medicare per capita spending for inpatient care in 2011 plateaued between the ages of 84 and 97, peaking at age 89, before declining (Exhibit 4). For Part B provider, services, and supplies and hospital outpatient services, per capita spending peaked earlier, at age 83, before declining. In contrast, per capita spending for skilled nursing facility and hospice services increased dramatically at older ages. A larger share of older beneficiaries used these services, and older users had higher per capita spending on them. Despite a gradual reduction in Medicare per capita spending for Part B providers, services, and supplies for beneficiaries beginning in their mid-to-late 80s, per capita spending continues to climb into the mid-90s as a result of persistent levels of inpatient hospital spending and a sharp rise in skilled nursing facility and hospice spend-
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Exhibit 3 Medicare Per Capita Spending Overall And By Type Of Service For Traditional Medicare Beneficiaries Over Age 65, By Age Group, 2011 Number of beneficiaries
Age (years)
Unweighted
All 66 or older 1,446,591 66–69 371,764
Spending by type of service
Weighted
Overall spending
Inpatient hospital
Outpatient hospital
Part B providers, services, and supplies
Parts B and D drugs
SNF
Home health
Hospice
28,931,820 7,435,280
$ 9,839 6,316
$3,230 2,077
$1,239 992
$2,336 1,715
$1,255 1,005
$ 911 258
$ 538 208
$ 331 63
70–74
344,928
6,898,560
8,430
2,761
1,261
2,271
1,264
434
331
108
75–79 80–84
265,791 214,988
5,315,820 4,299,760
10,486 12,395
3,523 4,198
1,423 1,432
2,651 2,819
1,376 1,426
787 1,341
515 763
210 415
85–89
148,707
2,974,140
14,109
4,609
1,322
2,803
1,401
2,114
1,086
775
70,591 29,822
1,411,820 596,440
15,174 11,951
4,620 3,256
1,170 768
2,567 1,675
1,354 978
2,741 2,271
1,311 1,058
1,411 1,945
90–94 95 or older
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The analysis excludes beneficiaries with Medicare Advantage. SNF is skilled nursing facility.
ing in the late 80s and 90s. Between ages 86 and 96, Medicare per capita spending on skilled nursing facility services increased by more than 50 percent (from $2,043 to $3,149) while per capita spending on hospice tripled (from $706 to $2,299) (see the Appendix).9 In percentage terms, as beneficiaries age, a larger share of Medicare per capita spending was devoted to skilled nursing facility and hospice services, and a smaller share to Part B providers and prescription drugs (see the Appendix).9 Spending on inpatient hospital services was a relatively constant share of per capita
spending until beneficiaries reached their late 90s. Spending On Decedents Spending on decedents affected our estimates of Medicare per capita spending by age. However, the age-related spending increase was not entirely attributable to end-of-life care or to higher death rates among older beneficiaries. The pattern of Medicare per capita spending by age was similar with or without decedents in our analysis, although average spending was higher at all ages when decedents were included. This is because average Medicare per capita spending was significantly greater for
Exhibit 4 Medicare Per Capita Spending For Traditional Medicare Beneficiaries Over Age 65, By Type Of Service, 2011
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The analysis excluded beneficiaries with Medicare Advantage. The analysis also excluded traditional Medicare beneficiaries age sixty-five because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this age. Parts B and D drug spending is not shown. SNF is skilled nursing facility. aPart B includes spending for Part B providers, services, and supplies.
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43,933
$
Per capita Medicare per capita spending among people who died in 2011 declined steadily with age, from $42,933 at age 70 to $20,318 at age 100.
decedents than for those who lived the entire year, both overall—$33,486 (Exhibit 5) versus $8,647 (Exhibit 1)—and at every age. Because of higher death rates among older beneficiaries, average per capita spending among beneficiaries who died at older ages exerted a greater influence on estimates of average Medicare spending among older beneficiaries.10 In contrast to the pattern of Medicare per capita spending observed generally, per capita spending on decedents in traditional Medicare declined steadily with age. In 2011 per capita spending declined from about $43,000 for decedents age 70 to about $20,000 for centenarians who died (Exhibit 5). The change was largely attributable to a reduction in inpatient spending. Limitations This study describes but does not explain the pattern of Medicare per capita spending by age, and it was not designed to assess factors related to the recent slow growth in total and per capita Medicare spending. Because the 5 percent sample we studied included Medicare spending but not spending by other payers, this analysis did not examine how Medicaid and other payers’ spending varied by age, in relation to Medicare spending. The 5 percent sample did not include patients’ characteristics, such as functional impairment. As a result, the analysis did not control for covariates that might help explain patterns in spending and service use. Our results reflect patterns of spending among traditional Medicare beneficiaries, but not
among the total Medicare population. Because we lacked comparable data for the 25 percent of beneficiaries enrolled in Medicare Advantage in 2011, it was not possible for us to assess whether patterns of service use and spending in traditional Medicare applied to the Medicare population overall.
Discussion This article provides new data to inform efforts to improve care management for Medicare’s oldest beneficiaries and related health policy discussions. As adults live into their 80s and beyond, they are more likely to live with multiple chronic conditions and functional limitations, and this combination (compared to having chronic conditions only) is associated with a greater likelihood of emergency department visits and inpatient hospitalizations as well as higher Medicare spending for inpatient hospital, skilled nursing facility, and home health services.11 Thus, it is not surprising that we find that Medicare per capita spending is higher for older seniors than it is for younger ones. Yet the rise in per capita spending for beneficiaries well into their 90s raises questions that are beyond the scope of this analysis: specifically, whether Medicare’s oldest old beneficiaries are getting the appropriate mix of services in the most appropriate setting, and whether more could be done to improve the management and quality of their care.
Exhibit 5 Medicare Per Capita Spending For Traditional Medicare Beneficiaries Over Age 65 Who Died In 2011, By Age 50,000
$42,933
Per capita spending ($)
40,000
$33,486 30,000
$20,318
20,000
10,000
0 65
70
75
80
85
90
95
100
Age (years)
SOURCE Authors’ analysis of a 5 percent sample of Medicare claims for 2011 from the Chronic Conditions Data Warehouse of the Centers for Medicare and Medicaid Services. NOTES The dashed orange line indicates the average Medicare per capita spending for traditional Medicare beneficiaries over age 65 who died in 2011 ($33,486). The analysis excluded beneficiaries with Medicare Advantage. The analysis also excluded traditional Medicare beneficiaries age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this age. The numbers of beneficiaries who died in 2011 are as follows: ages 66–69, 0.1 million; ages 70–74, 0.2 million; ages 75–79, 0.2 million; ages 80– 84, 0.3 million; ages 85–89, 0.3 million; ages 90–94, 0.2 million; ages 95–99, 0.1 million; and ages 100 and older, fewer than 0.1 million.
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The Affordable Care Act launched several payment and delivery system reforms that could alter patterns of care and spending for older patients with significant needs, including models to reduce preventable hospitalizations, better manage transitions following hospitalizations, and improve care management for beneficiaries with both Medicare and Medicaid. These efforts, if successful, could lower costs and improve care for Medicare’s octogenarians, nonagenarians, and centenarians. Consistent with findings from older studies focused on end-of-life costs,12,13 we found that Medicare per capita spending was significantly higher for those who died in 2011 than for those who did not. We also found that Medicare per The authors thank Jennifer Huang, a former policy analyst at the Henry J. Kaiser Family Foundation, who
capita spending among decedents declined steadily with age in 2011. This suggests that patients, families, and providers may be opting for less intensive and less costly end-of-life care for beneficiaries at older ages.
Conclusion Further work is needed to better understand the social, medical, and long-term care needs of older Americans and how best to address those needs. Strategies to improve the management of care for high-need, high-cost patients—many of whom are among Medicare’s oldest beneficiaries, and not just those at the end of their lives— are both timely and right on the money. ▪
coauthored the companion report released by the foundation, and Shannon Griffin for help in preparing the
manuscript. [Published online January 14, 2015.]
ternet]. Washington (DC): CBO; 2014 Jul [cited 2014 Dec 10]. p. 41. Available from: http://www.cbo .gov/sites/default/files/45471-LongTermBudgetOutlook_7-29.pdf Yamamoto DH. Health care costs— from birth to death [Internet]. Washington (DC): Health Care Cost Institute; 2013 Jun [cited 2014 Dec 10]. (Health Care Cost Institute Report No. 2013-1). Available from: http://www.healthcostinstitute.org/ files/Age-Curve-Study_0.pdf Cubanski J, Swoope C, Damico A, Neuman T. How much is enough? Out-of-pocket spending among Medicare beneficiaries: a chartbook [Internet]. Menlo Park (CA): Kaiser Family Foundation; 2014 Jul 21 [cited 2014 Dec 10]. Available from: http://kff.org/health-costs/report/ how-much-is-enough-out-of-pocketspending-among-medicarebeneficiaries-a-chartbook/ Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. National Health Expenditure Data [Internet]. Baltimore (MD): CMS. Table 25, Medicaid per-enrollee spending by gender and age group, calendar years 2002, 2004, 2006, 2008, 2010; [cited 2014 Dec 10]. Available from: http://www.cms.gov/ Research-Statistics-Data-andSystems/Statistics-Trends-andReports/NationalHealthExpend Data/Downloads/2010Genderand AgeTables.pdf To access the Appendix, click on the Appendix link in the box to the right of the article online. Among those age 70, Medicare per capita spending was more than six times greater for people who died
during 2011 than for those who did not ($42,933 [Exhibit 4] versus $6,847 [Exhibit 1]). However, just 2 percent of those age 70 died in 2011, so higher spending on them had a modest effect on the average spending for all beneficiaries at that age ($7,566 [Exhibit 1]). In contrast, among those age 90, Medicare per capita spending was two times greater for people who died in 2011, compared to those who survived ($26,687 versus $12,924), but spending on the 13 percent of 90year-olds who died in 2011 had a greater impact on average per capita spending in this age group ($14,745). 11 Komisar HL, Feder J (Georgetown University, Washington, DC). Transforming care for Medicare beneficiaries with chronic conditions and long‐term care needs: coordinating care across all services [Internet]. Long Beach (CA): SCAN Foundation; 2011 Oct [cited 2014 Dec 11]. Available from: http:// www.thescanfoundation.org/sites/ default/files/Georgetown_ Trnsfrming_Care.pdf 12 Calfo S, Smith J, Zezza M. Last year of Life Study [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services, Office of the Actuary; [cited 2014 Dec 11]. Available from: https://www.cms.gov/ Research-Statistics-Data-andSystems/Research/Actuarial Studies/downloads/Last_Year_ of_Life.pdf 13 Riley GF, Lubitz JD. Long-term trends in Medicare payments in the last year of life. Health Serv Res. 2010;45(2):565–76.
NOTES 1 The population age 80 and older was 11.3 million in 2010 and is projected to grow to 30.9 million in 2050. The population age 90 and older was 1.9 million in 2010 and is projected to grow to 8.0 million in 2050. 2 2010 population estimates are from U.S. Census Bureau. Population Division. Vintage 2011: national tables [Internet].Washington (DC): Census Bureau; 2012 May. Table 1, Annual estimates of the resident population by sex and five-year age group for the United States: April 1, 2010 to July 1, 2011 (NC-EST2011-01); [cited 2014 Dec 16]. Available from: https:// www.census.gov/popest/data/ national/asrh/2011/tables/ NC-EST2011-01.xls 3 2050 population estimates are from US Census Bureau, Population Division. 2012 National Population Projections: summary tables. Projections of the population by age and sex for the United States: 2015 to 2060 (NP2012-T12). Middle series [Internet].Washington (DC): Census Bureau; 2012 Dec [cited 2014 Dec 16]. Available from: https:// www.census.gov/population/ projections/files/summary/NP2012T12.xls 4 Henry J. Kaiser Family Foundation. The rising cost of living longer: analysis of Medicare spending by age for beneficiaries in traditional Medicare [Internet]. Menlo Park (CA): KFF; 2015 Jan 14 [cited 2015 Jan 14]. Available from: http://kff .org/medicare/report/the-risingcost-of-living-longer-analysis-ofmedicare-spending-by-age-forbeneficiaries-in-traditional-medicare 5 Congressional Budget Office. The 2014 long-term budget outlook [In-
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