Rise In Treated Disease Rates Fuels Health Care Costs

The rapidly rising cost of private health insurance is due less to higher prices for medical services than to increased treatment rates of disease, and may be linked to higher levels of obesity and improved treatment options for the overweight, according to a study published in Health Affairs.

The paper, "The Rising Prevalence of Treated Disease: Effects on Private Health Insurance Spending," was written by professors Kenneth Thorpe, Curtis Florence, David Howard, and research assistant Peter Joski of the Emory University Department of Health Policy and Management. Analyzing health care costs over a 15-year period, the authors tracked spending increases attributable to a rise in the number of treated disease cases, as well as cost increases caused by a rise in spending per treated case.

Results of the study showed that, between 1987 and 2002, inflation-adjusted private health insurance spending increased almost 60% per capita, or at an average rate of 3.1% annually. The paper identified 20 medical conditions accounting for the largest portion of this rise in health care spending. For 16 of these conditions, researchers asserted, "the rise in treated disease prevalence, rather than a rise in the cost per treated case, accounted for more than half of the growth in health care spending."

For several conditions linked to obesity, such as diabetes and heart disease, there was a marked surge in treated disease prevalence, the study found. The treated prevalence of diabetes, for example, rose by 64%, and accounted for nearly 80% of the increase in spending on this condition.

In the time period studied, the share of the U.S. population considered overweight increased by around 5%, while the share of the population classified as obese nearly doubled. Moreover, the relative differences in health care spending among overweight, obese, morbidly obese, and normal weight adults increased substantially between 1987 and 2002. Results of the analysis indicated that, by the end of this period, spending on obese adults was around 56% higher than for adults not considered obese.

Per capita private health insurance spending rose over the 15 years studied, researchers contended, "partly because of increases in the proportion of people who were obese and partly because increases in the incremental spending associated with being above normal weight."

According to the study, several trends contributed to the rise in treated disease prevalence, including the rise in the share of privately insured adults classified as obese, and the increase in the number of medical conditions treated among overweight and obese patients due to new drugs and technologies. The paper also cited two other major trends that accounted for the increase in treated disease prevalence: changes in clinical treatment guidelines and standards for treating asymptomatic or mildly symptomatic patients in all weight groups, as well as expanded options for treating ailments that were not as frequently diagnosed or treated 15 years previously, such as depression and other mental illnesses.

Given these findings, the paper’s authors argued, efforts by health plans and employers to control the cost-per-treated-case through measures such as consumer cost sharing and negotiating discounts with providers may be ineffectual because they do little to arrest the growth in treated disease prevalence. While consumer-directed approaches to health care spending may prove useful, researchers said, "they also appear mismatched with respect to the key driver of private health care spending: the rise in treated disease prevalence."

Instead of focusing on the cost-per-treated-case, the researchers concluded, "efforts to slow the growth of private insurance spending must target the population risk factors, along with other factors, that have led to the rise in treated disease prevalence."