High-cost US Medicare beneficiaries during 2016: What a deep dive of the data tells us

Swiss Re's Medical Group did an analysis of Medicare beneficiaries with very high medical costs during 2016 to gain a better understanding of these beneficiaries and their treatment that could lead to improved quality and efficiency of care. In addition, analysis of their claims can aid projections of the expected level and variance for Medicare fee-for-service, Medicare Advantage, or reinsurance costs.

The analysis showed that an aggregate spending on these beneficiaries is disproportionate to their numbers, and very high in absolute terms.

Key findings:

  • The 1% highest-cost beneficiaries have claims exceeding USD 125,000, and generate 15% of the total claims.
  • The 0.1% highest-cost beneficiaries have claims exceeding USD 250,000, and generate 3.5% of the total claims.
  • Inpatient claims comprise more than 50% of the large-claim costs.
  • Per beneficiary, large-claim costs for disability-eligible beneficiaries are 2‒4× the costs for aged-eligible. Disabled individuals tend to have higher health needs and costs.
  • Costs for dual-eligible beneficiaries (who are eligible both for Medicare and, due to low income, Medicaid) are 2‒3× costs for non-dual eligibles. Dual-eligibles have higher rates of chronic illness.
  • Costs for ESRD beneficiaries (having end-stage renal disease, permanent kidney failure) are more than 10x costs for the other beneficiary categories.
  • For claimants above USD 125,000, costs are highest in the Pacific region and lowest in the Mountain region. Pacific costs are more than 2× Mountain costs, in part due to higher average inpatient hospital costs.
  • Males are 25‒60% more costly than females, in part due to higher rates of chronic conditions like cardiovascular disease.
  • Surprisingly, on the largest claims (more than USD 250,000), the 75+ age group is 20‒30% less costly than the 65‒74 age group. Tragically, perhaps the oldest, very sick patients are more likely to die before their claims exceed USD 250,000.
  • The highest-cost ICD-10 primary diagnosis categories are:

– Diseases of the circulatory system (19% of costs),

– Neoplasms (11%),

– Certain infectious and parasitic diseases [including sepsis] (11%), and

– Diseases of the genitourinary system [the organ system of the reproductive organs and the urinary system], including diabetes (10%).

What a deep dive of the data tells us

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