Beneath all of the recent attention-grabbing issues such as escalating pharmaceutical prices, hospital pricing and surprise billing, there lurks what Ken Thorpe says is the real leading cause of ever-rising health care costs in America: Growing incidence rates of chronic illness.
In 1996, for instance, about 8 percent of adults had five or more chronic medical conditions that needed ongoing care. That rate is double today, at 16 percent, accounting for half of total health insurance spending in the U.S., said Thorpe, chairman of the nonprofit Partnership to Fight Chronic Disease.
A coalition of business and labor interests, plus care providers and patient advocates, the Partnership to Fight Chronic Disease points to a recent Kaiser Family Foundation study that shows 1.3 percent of U.S. insurance enrollees in 2017 accounted for 19.5 percent of overall health spending.
“Chronic disease and the growth of chronic disease is the leading driver of rising health care spending,” Thorpe said. “Unless we find ways to better manage and prevent that, the ability for the private sector to control the level and growth in spending (on health care) is going to be pretty limited.”
The cost here at home is enormous: In Michigan, the partnership estimates that chronic disease will cost nearly $1.3 trillion between 2016 and 2030.
That breaks down to $59.9 billion annually in medical costs, plus $25.8 billion in lost productivity, according to an analysis from the Partnership to Fight Chronic Disease, which notes that 6.1 million people in Michigan had at least one chronic condition in 2015. Two or more chronic conditions affected 2.4 million Michigan residents the same year.
Thorpe notes that nationally, one-third of Americans are obese – double the rate of 25 years ago – putting them at higher risk for chronic illnesses such as diabetes, hypertension and cardiovascular disease.
The partnership’s work to stem and, perhaps, reverse those trends focuses on health prevention and wellness – two areas where employers matter because 180 million Americans get their health coverage through their job or a spouse’s job. Thorpe urges employers to have their health plan or vendor perform an analysis to determine where their spending originates and what’s driving medical claims.
Oftentimes, an analysis will show that a good chunk of their medical claims come from a relatively small percentage of workers who have multiple chronic medical conditions, Thorpe said.
With better outreach, prevention and care coordination, employers can address their workforce’s incidence rates, which can drive up medical claims and insurance premiums, Thorpe said. Some 80 percent of chronic illnesses are potentially preventable, he said.
“Lifestyle is the key driver of rising spending,” said Thorpe, echoing wellness advocates who preach that a focus on health and prevention will “give any employer an opportunity to try and get spending growth down.
“Rather than just focus on paying the bills after somebody is sick, change the focus to preventing it in the first place,” he said. “It all starts with awareness.”
While many employers already embed wellness programs into their health benefits and work to cultivate a culture of health within the company, Thorpe argues that even more needs to occur and employers that don’t already should take a deep dive into wellness and health prevention.
There are plenty of proven best practices that employers can adopt to upgrade or establish a wellness problem to address rising rates of chronic illness.
“Think of it the same way you do your business. You identify trouble spots and bring solutions to them,” Thorpe said. “You’re trying to prevent the machinery from breaking down in the first place, so you have routine maintenance on it. It’s sort of the same techniques and management style that you really need to bring to managing health and productivity, because it’s not just the health care costs, it’s the lost productivity as well.”
Over the last decade or more, many employers have sought to control the rising cost of employee health coverage by switching to lower-cost, high-deductible health plans. They may initially pay less for those plans, but “that’s not going to solve the problem” of high chronic illness rates, Thorpe said.
Creating a culture of wellness will, he said. Despite the staggering costs of chronic illness, Thorpe sees a growing awareness of the issue that makes him hopeful.
“I think it’s changing,” he said. “Employers are increasingly seeing, just in their own data, that that’s the route to lower health care costs.”