Fit Seniors Trim Medicare Costs

But overall savings aren't much because they live longer

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By
HealthDay Reporter

WEDNESDAY, Sept. 10, 2003 (HealthDayNews) -- Seniors who stay healthy have lower annual health-care costs than their sicklier peers.

No surprise there.

But what might be surprising is that the longer life spans of healthy seniors means their total health-care costs will be about the same as the less healthy, a new study from the U.S. Centers for Disease Control and Prevention finds.

So their improved health status won't relieve the budget crunch on Medicare, as some hope, say the researchers. But neither will it add to Medicare costs, as others fear.

The new analysis, published in the Sept. 11 issue of the New England Journal of Medicine, was led by James Lubitz, chief of the CDC's Aging Studies Branch of the Office of Analysis, Epidemiology and Health Promotion.

"Our major finding was that there wasn't a big difference in cumulative costs for age 70 to death for those who started out at age 70 in good health vs. those who started out in poor health, even though those who started out at age 70 in good health live longer," he says.

For the study, Lubitz and his team drew on Medicare enrollment files. They classified a person's health status on the basis of responses to questions about physical functioning, such as the ability to lift objects or walk two to three blocks. They estimated total and active life expectancy and linked annual health-care expenditures with the persons' health status.

A person with no physical limitations at age 70 had an additional life expectancy of 14.3 years, the researchers found, and expected total health-care costs of $136,000, expressed in 1998 dollars. A person with a limitation in at least one area of physical functioning had an additional life expectancy of 11.6 years and expected total health-care expenditures of $145,000.

On an annual basis, the health-care costs for healthy persons are less than the not-so-healthy, Lubitz says. The average spent each year was about $4,600 for those with no physical limitation, compared to $45,400 a year for those in the worst health and who had to be institutionalized.

But because the healthier live longer, they will not save the Medicare system in overall costs, as some had suggested.

The effects of trends in seniors' longevity and health is of great importance to public policy experts, since the depletion of the Medicare trust fund is estimated to occur by 2029. Some researchers have predicted that seniors' improved overall health status would ease the financial pressure on Medicare.

"I think it's a valuable study," says Randy Fuller, a hospital trends researcher and market intelligence expert at GE Healthcare Financial Services in Orchard Park, N.Y. "There has been some concern in the health-care industry that the additional longevity of the senior population could have the potential to drain the whole system of assets," he says.

"This article really shows on the positive side that that is not necessarily going to happen," Fuller adds.

In an editorial accompanying the study, David M. Cutler, a Harvard University economist, says the study supports the optimists' argument that people who live longer do not incur greater total costs for medical service. So longer life, he says, won't drain the Medicare budget.

"Health promotion efforts could pay off in better life and longer health," Lubitz adds. "And it won't increase Medicare costs."

More information

The National Institute on Aging has information on how to choose a doctor. You could also try the U.S. Administration on Aging.

SOURCES: James Lubitz, M.P.H., chief, Aging Studies Branch, Office of Analysis, Epidemiology, and Health Promotion, National Center for Health Statistics, Centers for Disease Control and Prevention, Hyattsville, Md.; Randy Fuller, market intelligence expert and hospital trends researcher, GE Healthcare Financial Services, Orchard Park, N.Y.; Sept. 11, 2003 New England Journal of Medicine

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