Healthcare Business News

Reform Update: VA research pinpoints most costly combos of chronic conditions

By Melanie Evans
Posted: February 26, 2014 - 3:45 pm ET

New research from the U.S. Veterans Affairs Department found that VA patients who have at least three chronic conditions account for a disproportionate share of total medical costs. The study pinpointed which combinations of chronic conditions were most expensive.

The results underscore the challenge that the most-complex patients present to hospitals and doctors under contracts offering financial incentives for meeting cost and outcomes targets.

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The most costly patients were diagnosed with both chronic heart failure and chronic renal failure along with a third condition that varied (depression, spinal cord injury, ischemic heart disease). These patients accounted for less than half of 1% of all patients but were three times more costly than others with three or more chronic conditions.

VA patients with three or more chronic conditions were five times more costly than those with no chronic illness. The most frequently diagnosed combination of ailments was diabetes, hyperlipidemia and hypertension, “highlighting the need for preventive services to encourage dietary changes and physical activity,” said the article, published in the journal Medical Care.

“Ideally we will be able to figure how who is at risk for costly conditions and by understanding those at greatest risk we can figure out how an intervention will be most effective,” said Matt Maciejewski, a research scientist at the Durham (N.C.) Veterans Affairs Medical Center's innovation center. But to do that, research must identity the most costly conditions and develop interventions for the most-complex, expensive patients, he added.

Veterans with three or more chronic conditions made up roughly one-third of patients included in the new analysis but accounted for two-thirds of costs—a ratio not unlike prior research on the chronically ill.

“It's very hard, given the severity of these conditions, to avoid adverse events or utilization, because these patients are just so vulnerable,” Maciejewski said.

The findings join a growing body of research examining where the U.S. spends the most on healthcare. The hunt for high-cost targets has accelerated under the Patient Protection and Affordable Care Act, which authorized accountable care organizations and bundled-payment contracts that include incentives to control costs and achieve improved patient outcomes. These alternative payment and delivery models have spawned efforts to aggregate data to better identify avoidable expenses. Much of the work to curb healthcare costs by ACOs has targeted high-cost patients with multiple chronic conditions.

Closer scrutiny of these patients has begun to identify which combination of diseases, such as diabetes and depression, might be more costly than would be anticipated otherwise and what other factors may contribute to higher medical bills, such as disability, poverty and health literacy, said Christine Vogeli, an assistant professor of medicine at the Harvard Medical School and Partners HealthCare System's Mongan Institute for Health Policy.

Increasingly those researchers and clinicians seek to identify patients with combinations of multiple chronic conditions that are highly expensive but less prevalent, she said.

Providers such as Partners HealthCare, which operates a Medicare ACO, have greater incentives to identify disease combinations and other factors that compound the cost of conditions under new payment models. “All these things start to matter more because you're responsible for patients and the total cost of care,” she said.

Roaming patients

Interventions to manage care and cost for complex patients may be difficult when patients seek care from multiple providers. That is often the case among chronically ill patients who are high utilizers, according to a study of New Jersey patients also published in Medical Care.

One-third of patients who were admitted to New Jersey hospitals at least twice in two years visited more than one hospital, the study found. Eight out of 10 had at least two chronic conditions.

That fragmentation of care could potentially undermine efforts by accountable care organizations to better coordinate care and control costs. Providers outside the ACO do not have incentives to more efficiently manage care, said Katherine Hempstead, an author on the study who serves as a team director and senior program officer for the Robert Wood Johnson Foundation. “That's like having your window open on a cold day,” she said.

Follow Melanie Evans on Twitter: @MHmevans

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