Chronic Disease Costs a Lot: How Care Management Can Help

For decades, health care professionals and population health experts have warned that the U.S. has a crisis of chronic disease. About 60% of Americans have at least one chronic condition and 40% have two or more.

The total cost of managing and treating chronic conditions is staggering. The Centers for Disease Control and Prevention (CDC) estimates that 90% of all health care costs in the U.S. go toward treating chronic disease and mental health — about $3.7 trillion a year. Any efforts to reduce total health care costs in the U.S. must address these chronic health conditions. 

Rates of chronic disease continue to climb

The number of people in the U.S. battling chronic diseases like diabetes, obesity, and heart disease has risen steadily since the mid-1990s.

Chronic diseases are more likely to affect older people. With an aging baby boomer population, the prevalence of these conditions will likely continue to rise in coming years. But chronic conditions affect all segments of the population — about 40% of school-age children have at least one chronic health condition. Conditions that used to almost exclusively affect older adults now impact younger adults at much higher rates. For example, stroke rates in patients ages 20-44 increased from 17 to 28 per 100,000 between 1993 and 2015. 

The most costly, common chronic diseases affecting an ever-younger population include:

• Cancer 
  
• Chronic kidney disease 
  
• Diabetes 
  
• Heart disease 
• Obesity 
• Tooth decay 

While some chronic conditions are genetic, many are exacerbated by or the result of lifestyle choices, including excess alcohol consumption, physical inactivity, tobacco use, and unhealthy diet.

Most providers and health plans have programs available to help people improve their lifestyles to reduce the risk of developing chronic disease. But for people who already have these conditions, active chronic care management is necessary to maintain health and avoid complications. 

The impact of COVID-19 on chronic disease management 

When the COVID-19 pandemic hit the U.S. in 2020, we saw the significant toll it took on people with underlying health conditions. Age was the strongest risk factor for more severe COVID-19 symptoms. But the CDC also released a report documenting higher risk of “severe COVID-19 outcomes” for people with 19 different chronic diseases.

Further complicating the situation was the fact that some people were afraid to go to a hospital or doctor’s office during the pandemic. Millions of patients skipped appointments, tests, and screenings that are essential for managing chronic disease. Missing routine care to manage chronic conditions can lead to worsening health. Eventually, someone who doesn’t get proper chronic care management could end up needing costly care in the ER or hospital. 

Why chronic conditions cost the health care system so much

There are two key reasons that health care costs are so high for someone with a chronic health condition:  

Higher care volume

People with chronic health conditions often need more care than people without a chronic disease. Patients with these conditions may require:

• Frequent visits to their primary care provider or specialist.
• Imaging or other tests to evaluate disease progression, such as MRIs or PET scans for someone with cancer.
• Medications to treat the condition, including medications that are very specialized or have a high per-dose cost.
• Ongoing testing to monitor disease levels or other health indicators, such as A1C measurements for a person with diabetes. 

Increased use of emergency rooms and hospital inpatient care

The second reason chronic care costs are often higher is the increased risk they carry for ending up in an emergency room or hospital. People with these conditions may experience emergencies or flare-ups that necessitate emergency care. Some of these visits result in hospital admission when the condition has progressed and requires more intensive treatment.

There are also situations where people with chronic diseases seek care in the ER unnecessarily. One study found that patients with one or more chronic conditions and “highly fragmented care” were 13% to 14% more likely to visit the ER. Fragmented care often means lack of continuity in care and treatment plans. These people may not have a primary care provider to coordinate care and monitor their health over time.

Another study found that patients with chronic diseases contributed to 60% of all ER visits, and 4.3 million visits were likely preventable. Avoiding these preventable visits would save $8.3 billion a year in health care costs. There is no single reason for unnecessary ER visits, but reasons include:

• Lack of insurance and inability to afford private-pay PCP visits.
• Not taking medications as prescribed, either because of lack of understanding, undesirable side effects, or inability to afford the drugs.
• Poor condition management that ends in an after-hours ER visit.
• Unaddressed behavioral health issues that make disease management more difficult. 

The impact of innovative chronic care management strategies 

The high costs of chronic diseases necessitate a more comprehensive approach by health care providers and health plans. Chronic care management programs are one of the most efficient and effective ways to address the ongoing care needs of this patient population and lower total care costs. 

Effective care management programs: 

• Offer earlier intervention for patients who have a diagnosed chronic condition or are at higher risk of developing one of these diseases.
• Engage with patients more often throughout their care to ensure that they are doing what they can to manage their condition.
• Provide a more comprehensive and cohesive care experience coordinated among PCPs, specialists, hospitals, and long-term care facilities.
  

Many of these programs are now available through health care plans such as Highmark. Health plans and providers regularly review data to identify patients who might need this care, then set up outreach to discuss the benefits. Once a patient is enrolled, they can take advantage of:

• Frequent phone calls with a nurse care manager (usually an RN).
• Regular visits with a PCP, either in person or via virtual health appointments. • Remote patient monitoring (RPM) devices that track health data and provide feedback to a PCP’s office to look for changes that could indicate a potential problem.
• Earlier intervention when there is a sign of potential decline, helping patients get less expensive and more effective care before an emergency arises.
• Programs to help with lifestyle changes that can improve overall health and lower the risk of chronic disease flare-ups. 

Both Medicare and private insurance now reimburse providers for non-face-to-face services monitoring patients with two or more chronic conditions. Results from some of the most successful chronic care management programs show that they are an effective way to lower costs. 

How to lower health care costs

While chronic disease does contribute to a significant amount of excess health care spending, it’s not the only reason for high costs in the U.S. We take a deep dive into several things that influence total cost of care in this series:

• Overview: Why does health care cost so much?
• Part 1: High utilization rates
• Part 2: Prescription drug costs
• Part 3: Fraud, waste, and abuse
• Part 4: Health care economics and market forces