New research by the Washington Health Alliance (WHA) indicates that health care patients who manage multiple or complex conditions account for a large portion of the industry’s total costs.
These patients, while small in number, accounted for a disproportionate share of the costs due to the more expensive nature of their treatments and services.
WHA recently released its Total Cost of Care for Medical Groups and Clinics report, which examined the cost to provide medical services to patients. Researchers used medical claims and enrollment data from WHA’s All-Payer Claims Database (APCD) to combine the costs of all health care services and patient payments and analyze what the state spent on health care from 2018-20.
The report shows the average monthly cost to deliver health care to Washingtonians organized by their primary care provider’s location. Services were reported in 5 major categories, which included:
- Hospital inpatient services, which include surgery, maternity, skilled nursing facility, and other care that includes an overnight hospital stay
- Hospital outpatient services, which include services provided on an outpatient basis such as day surgery, radiology, cardiovascular, emergency medicine, and pharmacy
- Professional services, which include a wide range of treatments, including physical therapy, occupational therapy, radiology, preventive care, specialty drug treatments, and urgent care
- Prescription drug services, which include medicines dispensed at retail pharmacies
- Ancillary services, which include ambulance, home health care, and specific supplies including durable medical equipment, prosthetics, glasses, and contacts
The report shows the average cost to provide services on a per patient, per month basis. To calculate that amount, all allowed amounts for services provided to all patients attributed to a particular provider were divided by the total number of attributed patients represented in WHA’s APCD. That number was divided by 12 to attain the per-month amount.
Some patients received little more than preventive care, while others received care for multiple services or complex health conditions. But patients managing multiple or complex health conditions accounted for 13% of all health care costs.
“This level of detail on Washington state’s health care spending is the first of its kind,” WHA Executive Director Nancy Giunto said in a press release. “Being able to know what our health care dollars are being spent on and seeing the relative health of populations is a crucial starting point. The alliance is proud to facilitate this discussion. Now the real work can begin to tackle health care affordability.”