Healthcare costs and utilization for Medicare beneficiaries with Alzheimer's

Alzheimer's disease (AD) is a progressive, irreversible neurodegenerative disorder with high social and economic costs. Currently, an estimated 5.1 million Americans have AD, 4.9 million of them over the age of 65 [1]. Alzheimer's disease affects 13% of people over age 65 and nearly half of those over age 85, accounting for 50 to 70% of all dementia cases [1]. By 2050, 11.6 to 16 million Americans may have AD [2]. With the expected increase in AD cases, medical costs for Medicare beneficiaries with AD are expected to increase from $91 billion in 2005 to $160 billion in 2010 [3]. Understanding what contributes to health care costs and utilization among AD patients should help health plans develop effective disease management protocols.

Prior studies [4‐16] on costs and utilization associated with AD in the US have several limitations: 1) most use data collected prior to 2000 which do not capture current treatment patterns [4‐12, 15, 16]; 2) several "contaminate" their definitions of AD cohorts by including diagnosis codes of non-AD dementias in their claims data analyses [4‐6, 8, 12]; 3) several present only aggregated total cost data or omit pharmacy costs [4, 9, 10, 12]; and 4) most rely on the presence of, at most, a small subset of co-morbidities to account for the effect of differences in disease burden between cases and controls [4‐16].

In addition, no previous research has explored which medical conditions lead to inpatient admissions and emergency room (ER) use for patients with AD or estimated how AD affects such utilization beyond what would be expected based on the presence of co-morbidities.

In this study we sought to identify differences in direct healthcare costs and utilization, and common reasons for ER visits and inpatient admissions between Medicare beneficiaries with an AD diagnosis and controls, after comprehensively adjusting for the presence of other co-morbidities. Using a large, US administrative claims database, we examined 2004 direct healthcare costs and utilization for individuals aged 65 and above in each cohort with comprehensive medical (including claims paid by Medicare) and pharmacy claims. Illness burden was measured by a comprehensive disease classification and scoring system and used to produce estimates of the marginal effect of AD on inpatient, ER, pharmacy and other utilization and costs. Reasons for ER visits and inpatient admissions were also examined for both AD and control cohorts, and logistic regression was used to assess the contribution of AD to the most common reasons for ER visits and hospitalizations controlling for differences in overall illness burden. Findings from this research may help healthcare providers and health plans in the US develop protocols to better manage patients with AD.

As constructed, the control group did not differ from the AD cohort with respect to age, sex, regional distribution, or mean length of eligibility in 2004 (Table 1). However, the AD cohort had more co-morbidities (mean of 8.1 CCs vs. 6.5, p < 0.001), and a greater burden of non-AD illness (mean RRS of 1.23 vs. 1.04, p < 0.001).

Annualized costs and utilization by place of service are summarized in Table 2. The vast majority of AD patients (97%) and controls (91%) used some healthcare services in 2004. Rates of ER visits (41% vs. 27%), inpatient hospital stays (30% vs. 20%), and home health care (7% vs. 4%) were about 50% higher for AD patients than for controls. Controlling for overall illness burden, the excess utilization attributed to AD for inpatient services, ER visits, and home health care were all significant (p < 0.05). However, the AD cohort used fewer physician office visits and outpatient hospital services (both p < 0.05). Differences in costs attributed to AD were statistically significant (p < 0.05) for all categories except home health care. Spending in the AD cohort was higher for all but two categories of services (outpatient services and office visits) compared to controls, but AD spending was always less variable (coefficient of variation (CV) was lower). Excess pharmacy costs associated with AD were $1,711, more than twice that of any other expense category (p < 0.05).

The 10 most common reasons for ER visits among individuals belonging to the AD or control cohorts, and their rates and comparative prevalence, are shown in Table 3. The AD and control cohorts shared 6 of their 10 most common reasons, and their top two reasons (contusion/superficial injury and chest pain) were the same. The AD cohort had higher raw ER use rates than controls for all 14 reasons listed, and significantly higher risk-adjusted use rates for 11 of them with odds ratios (ORs) ranging as high as 5.85 for stupors and other states of altered consciousness. Only one of the 14 reasons shown (heart failure) had risk-adjusted ER use rate lower for AD patients than for controls (OR = 0.87, p < 0.05). The odds of an individual in the AD cohort having an ER visit for any reason was 74% greater than for controls.

Analogous to the previous table, Table 4 compares utilization for the top 10 most common reasons for inpatient admission for each cohort. Only 3 of the top reasons (hip fracture, other and unspecified pneumonia, and cystitis/other urinary tract infections) were shared. Even after controlling for illness burden, patients in the AD cohort were more likely to be hospitalized for most of the reasons listed, including pneumonia, infections, syncope and hip fracture. However, AD patients were less likely to be admitted to the hospital due to heart failure or coronary atherosclerosis and other coronary ischemic heart disease (all p < 0.05) compared with those in the control cohort. The only other reason for hospital admission that was less likely in the AD cohort was for osteoarthritis of lower leg (knee), typically related to knee surgery. The odds for an inpatient admission were 55% greater for AD patients than for controls.

Our study is the first to examine the most common medical conditions among AD patients that lead to inpatient admissions and ER use, and to contrast AD patients' co-morbid diseases and utilization with those of a demographically-matched control group. Earlier studies accounted for just a few co-morbidities in seeking to isolate AD's influence on costs and utilization. Using a comprehensive co-morbidity assessment for AD patients and a demographically-matched control group, we have achieved credible estimates of the independent effect of AD on healthcare costs and utilization. Individuals in the AD cohort had more unique co-morbid medical conditions and higher overall illness burden than those in the control cohort. Use of services was greater for AD patients, with far more inpatient, ER, and home health encounters. Mean excess cost attributed to AD, even after controlling for the greater overall burden of illness, was $2,307.

The AD cohort had considerably higher pharmacy costs [7, 8, 13, 14] and total health care costs [4, 7, 8, 11‐13] than seen in previous studies. The findings establish the need to better understand pharmacy management practices for AD patients given pharmacy's large contribution to their elevated costs. Compared with demographically-matched controls, AD patients had significantly higher but less variable costs. So although patients with AD were costly, their costs were more predictable than those in the control cohort.

In our study, AD patients on average had longer hospital days and more visits than controls for all utilization categories except physician office visits. Overall prevalence rates for ER visits and inpatient admissions were significantly higher for AD patients. Closely managing hospitalization as well as ER visits may have significant impact on health care resource use in AD.

Alzheimer's disease complicates the management of an elderly population with significant co-morbid disease. Patient non-cooperation, inability to communicate, less frequent office visits, and caregiver burden may all contribute to "simple" medical problems escalating into hospital admissions or ER visits for reasons such as pneumonia, dehydration and septicemia. Dehydration, for example, may precipitate other medical problems, including cystitis, electrolyte imbalances, contusions, and hip fractures. However, it is unclear if dehydration requiring ER care or hospitalization is really more common in AD patients; an alternative explanation is that "dehydration" is used to code admissions requested by stressed caregivers in the absence of clear clinical symptoms.

Alzheimer's patients have many co-morbid medical problems and use multiple medications [14, 19, 20]; they may be prone to harm themselves [13]. The use of multiple medications raises the risk of adverse drug reactions and drug-drug interactions, and complicates medication compliance [21]. Polypharmacy, especially in the elderly population, is associated with adverse drug reactions [22‐24], which occur in 5–10% of hospital inpatient admissions and increase hospital stays and costs [25]. All these factors, especially when combined with impaired cognition, could contribute to the observed increase in hospitalizations for hip fracture and syncope for AD patients. These findings suggest opportunities for improvement through case management to address AD patients' co-morbidities, specifically through medication reviews.

Differences in disease prevalence also lead to higher rates of hospitalization (most prominently, hospitalizations for AD itself). However, differences in co-morbidities do not explain AD patients' lower use of hospitalizations for heart problems since heart problems were similarly common in the two cohorts. This may be due to reduced awareness of (non-obvious) heart problems or because heart problems are treated less aggressively in AD patients. For example, ER visits for "chest pain" were more common in patients with AD compared to controls, although hospital admissions were less common.

Our study has several limitations. First, we examined Medicare-eligible individuals with employer-sponsored supplemental insurance, mostly from large companies whose active or former employees do not necessarily represent the general population of Medicare beneficiaries. This may contribute to the relatively low (4%) AD prevalence in this elderly cohort. Second, AD patients in our study were identified via diagnoses in administrative claims. Thus, some non-AD patients may be in our AD cohort (due to a false AD diagnosis) while some people with AD will be excluded (due to either a lack of any AD diagnosis or to misclassification, for example, as vascular dementia). Thirdly, the costs provided in our data do not capture care provided in skilled nursing facilities or nursing homes, therefore our analysis may underestimate the total direct healthcare costs of AD. Fourthly, our claims data do not have information on the duration or severity of AD, which is significantly related to healthcare cost and utilization [7, 26]. Although we controlled for differences in overall co-morbidities in our analysis, we could not control for disease severity. Fifthly, our data do not include information on living situation (e.g., home versus institution), which may also affect healthcare costs and utilization. Finally, although research has indicated that the indirect costs of AD are substantial [1], this study focused only on direct healthcare costs.

Compared to a demographically-matched control cohort, AD patients had significantly more co-morbid medical conditions and higher overall illness burden. Even after adjusting for differences in overall illness burden, people with AD incurred markedly more health care costs than their age-matched peers. The greater predictability of AD spending and more frequent, more costly, and different use of hospitals, suggests opportunities for improvement. Significantly increased financial exposure to AD with the expansion of prescription drug coverage under Medicare increases the pressure on health plans to develop more effective management protocols for AD patients.