Medicare Payments: How Much Do Chronic Conditions Matter?

Erkan Erdem,¹ Sergio I. Prada,^2,3 Samuel C. Haffer⁴

¹IMPAQ International LLC
²PROESA-Research Center for Social Protection and Health Economics
³Universidad Icesi
⁴Centers for Medicare & Medicaid Services

Objective: Analyze differences in Medicare Fee-for-Service utilization (i.e., program payments) by beneficiary characteristics, such as gender, age, and prevalence of chronic conditions.
Methods: Using the 2008 and 2010 Chronic Conditions Public Use Files, we conduct a descriptive analysis of enrollment and program payments by gender, age categories, and eleven chronic conditions.
Results: We find that the effect of chronic conditions on Medicare payments is dramatic. Average Medicare payments increase significantly with the number of chronic conditions. Finally, we quantify the effect of individual conditions and find that “Stroke / Transient Ischemic Attack” and “Chronic Kidney Disease” are the costliest chronic conditions for Part A, and “Cancer” and “Chronic Kidney Disease” are the costliest for Part B.

Keywords: Medicare, Chronic Disease, Gender/Sex Differences in Health and Health Care, Health Care Costs, Health Promotion / Prevention / Screening, Chronic Conditions, Dual-Eligibility, Public Use Files, Medicare Part A, Medicare Part B

doi: http://dx.doi.org/10.5600/mmrr.003.02.b02

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