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There is fairly broad agreement that conditions like cancer, diabetes, and more will be the most costly for the American healthcare system over the next decade.
According to the CDC, heart disease, cancer, diabetes, obesity, and Alzheimer’s disease are currently among the most expensive health conditions in the United States. The price tags are staggering.
The CDC says chronic disease-along with mental health conditions-accounts for 90% of the $3.5 trillion in annual U.S. health care expenditures. But calculating health care spending by condition or disease is complex with a welter to consider.
Several years ago, researchers at the Institute for Health Metrics and Evaluation at the University of Washington set out to estimate spending by disease category. They wound up using 183 different sources of data to tally up the spending on 155 different conditions. When the federal Bureau of Economic Analysis (BEA) calculated disease-based healthcare spending for 2016, the largest category, at $334 billion, was a catchall of “ill-defined” conditions that includes colds, allergies, and preventive services. To further complicate matters, cost gets defined in different ways. Sometimes it is used to refer to direct costs on medical services. Other times, the indirect costs of lost income get factored in-and not just those for the people affected by the disease, but also those who take care of them.
Yet, despite this Rubik’s cube of variability, caveats, and judgment calls, there is fairly broad agreement on which health conditions are going to be most costly for the American healthcare system over the next decade.
Virtually, every list puts cardiovascular disease (CVD) at the top of the cost charts. The American Heart Association’s 2019 heart and stroke update put the annual cost of CVD at $351 billion-most of it ($214 billion) in direct costs.
In the BEA’s disease-specific tallies, CVD at $249.4 billion, was second only to the ill-defined conditions categories as the costliest disease. Sheer prevalence is a major factor in the expenditures for CVD. The AHA says nearly half of American adults have CVD. New guidelines that expanded the definition of high blood pressure are one of the reasons such a large proportion of American population are categorized this way.
CVD is not only expensive and common, it’s often deadly. In fact, heart disease remains the leading cause of death in this country despite real progress in prevention and treatment. In 2017, heart disease caused 647, 457 American deaths, or 23% of the total for that year.
In the next 10 years, many of these numbers are expected to increase because risk factors for CVD are still major problems, notes Richard Seidman, MD, MPH, the chief medical officer for L.A. Care Health Plan, a Medicaid managed care health plan in Los Angeles that is the nation’s largest publicly operated health plan.
True, smoking rates have been on the decline for decades and are at all-time lows. But in 2017, an estimated 14% of Americans adults were “every day” or “someday” cigarette smokers. That translates into a 34 million smokers, a sizable number by almost any standard. Obesity rates have been climbing for decades; almost 4 out of every 10 American adults are obese. Of course, obesity is a risk factor for type 2 diabetes, and the American Diabetes Association says that more than 9% of Americans have diabetes, an all-time high. Seidman points out that adults with diabetes are two to four times more likely to die from heart disease than those without diabetes.
Treating CVD involves a wide range of costly medical services: diagnostic tests, ambulance trips, hospital stays, angioplasty, bypass surgery, to name just few. The pharmaceutical armamentarium for CVD is large, and generics have lowered the expense of some classes of medications-statins are the prime example. Yet, the American Heart Association reports that one in 8 in eight heart patients skips their medication because of price and affordability.
“Until we can bring the costs of medications down, noncompliance will continue,” Seidman says. “People who don’t adhere to their medication regimen will get sicker, raising costs even more.”
Cancer is common-1.8 million new cases will be diagnosed this year, according to the American Cancer Society. It’s also lethal-roughly 600,000 Americans will die from cancer this year, although the mortality rate has been dropping. The 2.2% decrease from 2016 to 2017 was the largest decline in a single year, according to the cancer society. The flip side to declining mortality is an increasing number of cancer survivors. If projections made by NCI researchers almost 10 years ago are holding true, there are now more than 18 million cancer survivors in the U.S.
Given these numbers, some of the cost estimates for cancer are surprisingly low. The BEA put the cancer price tag at $135.8 billion, and the Institute for Health Metrics and Evaluation arrived at a figure of $115.4 billion, which is considerably less than its estimate for CVD ($231.1 billion) and mental and substance use disorders ($187.8 billion).
Howver, those estimates were made before the current surge in expensive cancer treatments and, more particularly, the advent of the costly immunotherapies. Prices of more than $100,000 a year are no longer the least bit surprising.
“While new therapies are more effective and individualized based on a patient’s individual genomic makeup or the cancer’s genomic makeup, overall cancer treatment is becoming much more costly on a per patient basis,” says Richard P. Morel, MD, MMM, FACP, chief physician executive CareMount Medical, a multispecialty medical group in a health system in Chappaqua, N.Y.
Expensive treatment in combination with benefit design that leaves patients and their families exposed to high costs made “financial toxicity” a major issue in oncology. Scott Ramsey, MD, PhD, director of the Hutchinson Institute of Cancer Outcomes Research in Seattle, has conducted the leading studies on financial toxicity. Ramsey and his colleagues have shown that cancer patients are 2.6 times more likely to declare bankruptcy than people without cancer. Drug companies and healthcare systems have a variety of ways of insulating patients from sky-high prices, but it isn’t complete protection by any means.
Apart from price and the vast array of prevention and treatment choices, demographic and other trends are likely to push cancer incidence and prevalence up in the coming decade.
The march of the baby boomers into their seventh and eighth decades will be a factor.
“The number of cancer diagnoses will likely continue to climb as the population continues to age,” says Seidman, pointing out that in 10 years’ time all the boomers will be older than 65.
Alcohol consumption is a risk factor for several types of cancer, according to Seidman. Several years ago, results reported in JAMA Psychiatry that were based on an analysis of data from the National Epidemiologic Survey on Alcohol and Related Conditions showed that more Americans are drinking alcohol, and more are drinking to a harmful level. Obesity is another potent, ascendant risk factor. Much of the evidence comes from observational studies, so it has some iffiness to it, but the associations are strong for liver, kidney, endometrial, and several other cancers.
“With obesity continuing to rise in the United States, the costs of treating such cancers will also rise,” he says.
In its ranking of 2013 spending on 155 health conditions, the Institute for Health Metrics and Evaluation ranked diabetes as the most expensive one at an estimated $101.4 billion-most (57.6%) of the money paying for pharmaceuticals.
A 2018 report from the Milken Institute on the cost of chronic disease identified diabetes as the second only to CVD in direct costs ($189.6 billion vs. $294.3 billion CVD). Prevalence, as usual, is one of the reasons for the expenditure. The American Diabetes Association says there 30.3 million Americans with diabetes, a figure that includes 7.2 million people who haven’t been diagnosed. A study published in Population Health Management in 2017 projected that number of Americans will increase in the 2020s and reach 54.9 million by 2030.
Latinos are a growing proportion of the American population, and diabetes is more prevalent among Latinos than other groups; for example, Latino adults are 1.7 times more likely than non-Latino white adults to be diagnosed with diabetes.
“Diabetes will continue to be an expensive medical condition 10 years from now because of the many complications that occur, most of which are related to sedentary lifestyles and unhealthy diets,” says Richard Dal Col, MD, MPH, chief medical officer, of EmblemHealth, a nonprofit health insurer in New York. “The longer someone has diabetes that is not well-controlled, the higher their likelihood of complications over time-including renal and cardiac failure.”
The dramatic jump in the price of insulin is also having a significant impact on the cost of diabetes care. A congressional report stated insulin costs jumped nearly 300% from 2002 to 2013.
“Government leaders at all levels have been pressuring drug companies to do something about these rising costs, but the companies argue that the high price is due to new insulin formulations that continue to be produced,” Seidman says.
Furthermore, the new formulations blunt competition from some lower-priced generics.
Whether obesity is a risk factor or its own health condition might be debated. But there’s no question that more Americans are getting heavy. The latest CDC estimate is that 39.8% of Americans adults are obese, with obesity defined as a BMI of 30 or greater. The estimate for children is 18%, although obesity in children is defined by percentile, not a set BMI.
“Not only are obesity rates increasing but obesity is starting earlier in life, adding more years of exposure to risk,” says Morel. “Combined with increasingly sedentary lifestyles, the prevalence of costly complications from obesity will continue to drive higher costs of care.”
The Milken Institute report says chronic diseases caused by obesity and being overweight (a BMI of 25 to 29.9) accounted for almost half (47.1%) of the total cost of chronic disease in 2016, including $480.7 billion in direct cots and $1.24 trillion in indirect costs.
Migration patterns within the U.S. may further deepen the country’s obesity epidemic.
“There is regional variation in obesity, in part due to differences in the built environment and local lifestyles,” says Adam C. Powell, PhD, president of Payer+Provider Syndicate, a healthcare consulting firm in Boston.
Many states with lower obesity rates, such as California, New Jersey, and New York, where 25%-30% of the population is obese, are experiencing net outflows of people, according to Powell. Meanwhile, states with higher obesity rates, such as Florida, Tennessee, and Texas, where 30%-35% of the population is obese, are experiencing net inflows of people.
The Milken Institute estimated the direct cost of Alzheimer’s disease at $185.9 billion. The Institute for Health Metrics and Evaluation figure of $36.7 billion is far less. In fact, according to the institute’s ranking, Alzheimer’s is the 21st most costly health condition. The discrepancy in the estimates is a reminder that these are just estimates made with differing assumptions and criteria.
More than 5 million Americans are currently living with Alzheimer’s. As the older population increases, that number is expected to increase dramatically. By 2050, nearly 14 million Americans are expected to have Alzheimer’s, according to the Alzheimer’s Association’s 2019 facts and figures report.
Matthew Baumgart, the senior director of government affairs for the Alzheimer’s Association, said the combination of aging baby boomers and improving outcomes for other diseases that affect older people mean that the incidence of Alzheimer’s is likely to increase-and with that, the cost.
Billions have been invested in Alzheimer’s research and drug development, but the results have fallen far short, so high drug costs are not much of a factor-yet-in the cost of Alzheimer’s. But people often live with Alzheimer’s for many years and that can mean years of expensive care in a nursing home or elsewhere.
Often, the cost figures for Alzheimer’s don’t include the billions of dollars of uncompensated care that more than 16 million family members and friends provide, notes the disease advocacy group. In 2018, unpaid care for people with Alzheimer’s and other dementias totaled more than 18 billion hours, at an estimated economic value of $234 billion, according to the Alzheimer’s Association.
“Unless disease-modifying treatments are discovered, these costs will continue to skyrocket over the next decade and beyond,” says Baumgart.
The extended family, including children and grandchildren, used to be the primary caregivers for people with Alzheimer’s and other kinds of age-related dementia, says Morel.
“But with higher rates of dual-income families, more individuals with Alzheimer’s and dementia are moving to long-term care facilities or rely on home health, adding a huge expense going forward,” he adds.
In addition, folks will see an increased number of hospital admissions for the frail and elderly with cognitive issues, but many will be unable to go directly home after discharge,” he says. “Instead they will require additional care in subacute or rehabilitation facilities, further adding to care costs.”
Karen Appold is a medical writer in the Lehigh Valley region of Pennsylvania.