What medical conditions are driving employer healthcare costs?
Healthcare costs surrounding diabetes reached $101 billion in diagnoses and treatments over the past 18 years — and the cost grew 36 times faster than the cost of ischemic heart disease, the leading cause of death in the U.S. Further, out of 155 medical conditions, only 20 accounted for half of all medical spending, according to a JAMA analysis of 2013 healthcare costs.
The third-most expensive medical condition, low back and neck pain, primarily strikes adults of working age while diabetes and heart disease is primarily found in people 65 and older.
The JAMA study found total health spending for these conditions totaled $437 billion in 2013. Diabetes, heart disease, low back and neck pain, along with hypertension and injuries from falls, comprise 18% of all personal health spending. All in all, 20 conditions make up more than half of all spending on healthcare in the U.S.
These stark figures shed light on the rising healthcare costs that employers pay when addressing their workforce’s ailments.
According to Francois Millard, senior vice president and chief actuarial officer for Vitality Group, one of the study’s sponsors, this is the first study to dig into the details of the leading ailments of the U.S. and its costs to employers and families as they deal with the conditions.
“In absolute terms, most money for care is in the working age population,” he says. “It impacts households and employers and contributes to the financial burden of families.”
“What we see is the financial burden increases as the disease increases, and while the paper doesn’t go into detail, we already have a significant knowledge of diabetes and heart condition. It is related to modifiable behavior.”
The JAMA study noted the differences between public health program spending from personal health spending, including individual out-of-pocket costs and spending by private and government insurance programs.
“While it is well known that the U.S. spends more than any other nation on healthcare, very little is known about what diseases drive that spending,” said Dr. Joseph Dieleman, lead author of the paper and assistant professor at the Institute for Health Metrics and Evaluation at the University of Washington, in a press statement. “IHME is trying to fill the information gap so that decision-makers in the public and private sectors can understand the spending landscape, and plan and allocate health resources more effectively.”
Despite using figures from 2013, the information can help employers as they identify where their healthcare dollars are going.
“Given the biggest increases in healthcare spending on impact working age populations, it requires employers to improve their work environments and facilitate good health. And [this study can] help increase the transparency of health within their populations,” says Millard.
“Employers need to think what they do that impacts beyond the four walls of the employers and create a symbiotic relationship with health within their societies,” he adds.
The study can also boost transparency into the healthcare data. “This study is also an accountability and outcome of the money they are spending on health treatment,” Millard says. “Is it sufficient to still pay for services or can we push for more accountability for health outcomes? The other thing this facilities is that employers get the adequate level of data. They can ask the right questions and determine accountability for the huge amounts of healthcare.”
He adds, “With all the uncertainty around 2017, perhaps this transparency will give employers a voice to all of the money that they are spending.”
The top 10 most costly health expenses in 2013:
1. Diabetes – $101.4 billion
2. Ischemic heart disease – $88.1 billion
3. Low back and neck pain – $87.6 billion
4. Hypertension – $83.9 billion
5. Injuries from falls – $76.3 billion
6. Depressive disorders – $71.1 billion
7. Oral-related problems – $66.4 billion
8. Vision and hearing problems – $59 billion
9. Skin-related problems, such as cellulitis and acne – $55.7 billion
10. Pregnancy and postpartum care – $55.6 billion