The concentration and persistence of health care expenditures and prescription drug expenditures in Medicare beneficiaries with Alzheimer disease and related dementias

Abstract

Background: Alzheimer disease and related dementias (ADRD) have become a major concern for Medicare because of the increasing prevalence rate and the associated high cost of care.

Objectives: This study investigated the extent of concentration and persistence in total health care expenditures and prescription drug expenditures among the elderly with ADRD, and identified characteristics associated with expenditure persistence that may provide targets for cost containment approaches.

Research design: This retrospective cohort study analyzed cross-sectional Medicare Current Beneficiary Survey data to examine expenditure concentration by calculating the proportion of total and prescription drug expenditures incurred by the top 10%, top 25%, and top 50% of beneficiaries in each year. A transition probability matrix and logit models were estimated to predict expenditure persistence over a 2-year period.

Results: The top 10% of beneficiaries with ADRD accounted for nearly half of total health expenditures and one-third of drug expenditures. Inpatient care comprised the largest share of overall expenditures in the top 10% group, whereas physician visits and prescription medications were the cost drivers in the bottom 50% group. Expenditure persistence was very strong, especially for prescription drugs. Prior expenditures and comorbidity burdens were the strongest predictors of persistence.

Conclusions: The results of our study highlight the challenges to reducing expenditure growth and persistence for high-cost ADRD beneficiaries with prominent comorbidities. It will be important to examine whether better care coordination and disease management tailored to high-cost beneficiaries with ADRD can effectively contain costs.