Disability and health care costs in the medicare population

Objective: To determine the effect of activity limitations on health care expenditures. Design: Cross-sectional. Setting: National survey. Participants: Data from the 1997 Medicare Current Beneficiary Survey (n=9298), a nationally representative sample of community-dwelling Medicare beneficiaries who were older than 64 years of age. Interventions: Not applicable. Main Outcome Measures: The impact of patient disability on health care costs (inpatient, outpatient, skilled nursing facility, home health, medications). Activity limitations were determined by patient assessment of restrictions in activities of daily living (ADLs). Results: Over 20% (n=6, 500, 000) of the entire Medicare population had at least 1 health-related activity limitation. Total median health care costs per year (interquartile range [IQR]) increased as the number of these limitation increased (0 ADLs: $1934 [IQR, $801-$4761]; 1-2 ADLs: $4540 [IQR, $1744-$12, 937]; 3-4 ADLs: $7589 [IQR, $2580-$23, 149]; 5-6 ADLs: $14, 399 [IQR, $5425-$33, 014]). After adjusting for confounding characteristics including the impact of comorbid illnesses, Medicare enrollees incurred higher health care costs as their number of activity limitations increased (0 ADLs: cost ratio=1.0; 1-2 ADLs: cost ratio=1.4 [95% confidence interval (CI), 1.2-1.6]; 3-4 ADLs: cost ratio=1.6 [95% CI, 1.3-2.0]; 5-6 ADLs: cost ratio=2.3 [95% CI, 1.7-3.2]). The cost increases were because of an increase in the frequency of all events (eg, hospital admissions, outpatient visits) rather than an increase in the intensity or cost of those events. In addition, with increasing activity limitations, there was a significant increase in the proportional impact of home health costs such that, for those with 5 or 6 limitations, home health costs exceeded the cost of outpatient visits. Conclusions: Activity limitation is an independent risk factor for increased health care costs and appears to be more than just a proxy for chronic illness.