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July 25, 2016 | Healthcare Spending Rises with Aging Population: CCM is Here to Help

With the push to cut costs and maximize the value of each treatment, the healthcare industry has long been seeking to answer the question: Where are we spending so much money? At last estimate healthcare spending is set to rise 6% from 2015 to 2025, with many pointing to the expanded coverage under the Affordable Care Act as a possible answer.

However, a new CMS report says there may be another factor responsible for the growth– our rapidly aging population.

Specifically, the report, released in the journal Health Affairs from earlier this month, identifies that a majority of the spending will be “influenced by changes in economic growth, faster growth in medical prices and population aging.” With 75% of healthcare costs associated with multiple conditions, and nearly 56 million Medicare patients falling into this category, our problems controlling costs are poised to get a whole lot bigger in the coming years.

The report further states that by 2025, 47% of health spending will be sponsored by federal, state or local governments– with a large portion dedicated to providing care for the “baby boomer” generation consisting of elderly patients. The increasing percentage of patients tied to government based payers gives federally sponsored healthcare initiatives more clout than ever before. The Department of Health and Human Services made history in early 2015 by announcing aggressive plans to shift reimbursement to a value-based structure.

While the average growth is still lower than it was before the recession in 2008 (7%), these statistics indicate that healthcare must focus on programs that decrease utilization costs while improving meaningful outcomes as more of our population ages. This may be largely due to value-based incentive programs, as it is estimated that these initiatives have saved 50,000 lives and $15 billion dollars from 2010-2013.

Another study, this one from Kaiser Health News, reinforces this notion, pointing out that about 25% of all Medicare spending on beneficiaries 65 and older is for care administered in the last year of life. The average cost of care in the last 6 months of life is a shocking $50,000 per patient, with an increase in cost associated with patients that do not receive end-of-life counseling or have an advance directive in place. Further, 2.6 million people died in the U.S. in 2014. Of this number, 2.1 million, or 8 in 10, were on Medicare, making it the major insurer of end-of-life care.

The takeaway is this: We must work diligently to improve the care of senior patients before they become seriously ill, especially for those with chronic conditions that are often difficult and costly to manage.

The good news is that programs like Medicare’s Chronic Care Management (CCM) are already working to provide timely care tailored to the patient’s individual needs, reducing the utilization of ER visits and hospital readmissions. There is no denying that more individuals will soon fall under the blanket of “Older Americans,” and as the numbers indicate, more programs like CCM will be pivotal to providing focused, specific care that helps patients live longer and better lives.