State‐Level Estimates of Annual Medical Expenditures Attributable to Obesity*

Objective: To provide state‐level estimates of total, Medicare, and Medicaid obesity‐attributable medical expenditures. Research Methods and Procedures: We developed an econometric model that predicts medical expenditures. We used this model and state‐representative data to quantify obesity‐attributable medical expenditures. Results: Annual U.S. obesity‐attributable medical expenditures are estimated at $75 billion in 2003 dollars, and approximately one‐half of these expenditures are financed by Medicare and Medicaid. State‐level estimates range from $87 million (Wyoming) to $7.7 billion (California). Obesity‐attributable Medicare estimates range from $15 million (Wyoming) to $1.7 billion (California), and Medicaid estimates range from $23 million (Wyoming) to $3.5 billion (New York). Discussion: These estimates of obesity‐attributable medical expenditures present the best available information concerning the economic impact of obesity at the state level. Policy makers should consider these estimates, along with other factors, in determining how best to allocate scarce public health resources. However, because they are associated with large SE, these estimates should not be used to make comparisons across states or among payers within states.     

BMI,Physical Activity,and Health Care Utilization/Costs among Medicare Retirees

Objective: To examine the influence of physical activity (PA) and BMI on health care utilization and costs among Medicare retirees. Research Methods and Procedures: This cross‐sectional study was based on 42, 520 Medicare retirees in a U.S.‐wide manufacturing corporation who participated in indemnity/perferred provider and one health risk appraisal during the years 2001 and 2002. Participants were assigned into one of the three weight groups: normal weight, overweight, and obese. PA behavior was classified into three levels: sedentary (0 time/wk), moderately active (1 to 3 times/wk), and very active (4+ times/wk). Results: Generalized linear models revealed that the moderately active retirees had $1456, $1731, and $1177 lower total health care charges than their sedentary counterparts in the normal‐weight, overweight, and obese groups, respectively (p < 0.01). The very active retirees had $1823, $581, and $1379 lower costs than the moderately active retirees. Health care utilization and specific costs showed similar trends with PA levels for all BMI groups. The total health care charges were lower with higher PA level for all age groups (p < 0.01). Discussion: Regular PA has strong dose‐response effects on both health care utilization and costs for overweight/obese as well as normal‐weight people. Promoting active lifestyle in this Medicare population, especially overweight and obese groups, could potentially improve their well‐being and save a substantial amount of health care expenditures. Because those Medicare retirees are hard to reach in general, more creative approaches should be launched to address their needs and interests as well as help reduce the usage of health care system.     

Obesity and Medicare Expenditure: Accounting for Age‐Related Height Loss

To determine the relationship between BMI and Medicare expenditure for adults 65‐years and older and determine whether this relationship changes after accounting for misclassification due to age‐related height loss. Using a cross sectional study design, the relationship between BMI and fee‐for‐service Medicare expenditure was examined among beneficiaries who completed the Medicare Current Beneficiary Survey (MCBS) in 2002, were not enrolled in Medicare Health Maintenance Organization, had a self‐reported height and weight, and were 65 and older (n = 7,706). Subjects were classified as underweight, normal weight, overweight, obese (obese I), and severely obese (obese II/III). To adjust BMI for the artifactual increase associated with age‐related height loss, the reported height was transformed by adding the sex‐specific age‐associated height loss to the reported height in MCBS. The main outcome variable was total Medicare expenditure. There was a significant U‐shaped pattern between unadjusted BMI and Medicare expenditure: underweight $4,581 (P < 0.0003), normal weight $3,744 (P < 0.0000), overweight $3,115 (reference), obese I $3,686 (P < 0.0039), and obese II/III $4,386 (P < 0.0000). This pattern persisted after accounting for height loss: underweight $4,640 (P < 0.0000), normal weight $3,451 (P < 0.0507), overweight $3,165 (reference), obese I $3,915 (P < 0.0010), and obese II/III $4,385 (P < 0.0004) compared to overweight. In older adults, minimal cost is not found at “normal” BMI, but rather in overweight subjects with higher spending in the obese and underweight categories. Adjusting for loss‐of‐height with aging had little affect on cost estimates.     

State- and payer-specific estimates of annual medical expenditures attributable to obesity

The goal of this study is to expand prior analyses by presenting current state-level estimates of the costs of obesity in total and separately for Medicare and Medicaid. Quantifying current Medicare and Medicaid expenditures attributable to obesity is important because high public sector costs of obesity have been a primary motivation for publicly funded obesity prevention efforts at the state level. We also present estimates of the obesity-attributable fraction (OAF) of total, Medicare, and Medicaid expenditures and the percentage of total obesity costs within each state that is funded by the public sector. We used the 2006 Medical Expenditure Panel Survey, nationally representative data that include information on obesity and medical expenditures, to generate an equation that predicts annual medical expenditures as a function of obesity status. We used the 2006 Behavioral Risk Factor Surveillance System, state representative data, and the equation generated from the national model to predict state (and payer within state) expenditures and the fraction of expenditures attributable to obesity for each state. Across states, annual medical expenditures would be between 6.7 and 10.7% lower in the absence of obesity. Between 22% (Virginia) and 55% (Rhode Island) of the state-level costs of obesity are financed by the public sector via Medicare and Medicaid. The high costs of obesity at the state level emphasize the need to prevent and control obesity as a way to manage state medical costs.     

Effects of Expanded Coverage for Chiropractic Services on Medicare Costs in a CMS Demonstration

Background

Moderately convincing evidence supports the benefits of chiropractic manipulations for low back pain. Its effectiveness in other applications is less well documented, and its cost-effectiveness is not known. These questions led the Centers for Medicaid and Medicare Services (CMS) to conduct a two-year demonstration of expanded Medicare coverage for chiropractic services in the treatment of beneficiaries with neuromusculoskeletal (NMS) conditions affecting the back, limbs, neck, or head.

Methods

The demonstration was conducted in 2005–2007 in selected counties of Illinois, Iowa, and Virginia and the entire states of Maine and New Mexico. Medicare claims were compiled for the preceding year and two demonstration years for the demonstration areas and matched comparison areas. The impact of the demonstration was analyzed through multivariate regression analysis with a difference-in-difference framework.

Results

Expanded coverage increased Medicare expenditures by $50 million or 28.5% in users of chiropractic services and by $114 million or 10.4% in all patients treated for NMS conditions in demonstration areas during the two-year period. Results varied widely among demonstration areas ranging from increased costs per user of $485 in Northern Illinois and Chicago counties to decreases in costs per user of $59 in New Mexico and $178 in Scott County, Iowa.

Conclusion

The demonstration did not assess possible decreases in costs to other insurers, out-of-pocket payments by patients, the need for and costs of pain medications, or longer term clinical benefits such as avoidance of orthopedic surgical procedures beyond the two-year period of the demonstration. It is possible that other payers or beneficiaries saved money during the demonstration while costs to Medicare were increased.     

An Analysis of Costs and Health Co-Benefits for a U.S. Power Plant Carbon Standard

Reducing carbon dioxide (CO₂) emissions from power plants can have important “co-benefits” for public health by reducing emissions of air pollutants. Here, we examine the costs and health co-benefits, in monetary terms, for a policy that resembles the U.S. Environmental Protection Agency’s Clean Power Plan. We then examine the spatial distribution of the co-benefits and costs, and the implications of a range of cost assumptions in the implementation year of 2020. Nationwide, the total health co-benefits were $29 billion 2010 USD (95% CI: $2.3 to $68 billion), and net co-benefits under our central cost case were $12 billion (95% CI: -$15 billion to $51 billion). Net co-benefits for this case in the implementation year were positive in 10 of the 14 regions studied. The results for our central case suggest that all but one region should experience positive net benefits within 5 years after implementation.     

mAbs: A business perspective

The twenty two monoclonal antibodies (mAbs) currently marketed in the U.S. have captured almost half of the top-20 U.S. therapeutic biotechnology sales for 2007. Eight of these products have annual sales each of more than $1 B, were developed in the relatively short average period of six years, qualified for FDA programs designed to accelerate drug approval, and their cost has been reimbursed liberally by payers. With growth of the product class driven primarily by advancements in protein engineering and the low probability of generic threats, mAbs are now the largest class of biological therapies under development. The high cost of these drugs and the lack of generic competition conflict with a financially stressed health system, setting reimbursement by payers as the major limiting factor to growth. Advances in mAb engineering are likely to result in more effective mAb drugs and an expansion of the therapeutic indications covered by the class. The parallel development of biomarkers for identifying the patient subpopulations most likely to respond to treatment may lead to a more cost-effective use of these drugs. To achieve the success of the current top-tier mAbs, companies developing new mAb products must adapt to a significantly more challenging commercial environment.Key words: autoimmune, biosimilars, buy and bill, comparative trials, drug approval, monoclonal, oncology, reimbursement     

The Effect of Obesity and Cardiometabolic Risk Factors on Expenditures and Productivity in the United States

Objective: To examine the effect of obesity and cardiometabolic risk factors on medical expenditures and missed work days. Methods and Procedures: The 2000 and 2002 Medical Expenditure Panel Survey (MEPS), a nationally representative survey of the US population, was used to estimate the marginal effect of obesity (BMI ≥ 30) on annual per‐person medical expenditures and missed work days for patients with diabetes, dyslipidemia, or hypertension using multivariate regression methods controlling for age, sex, race, ethnicity, education, income, insurance, and smoking status. Maximum Likelihood Heckman Selection with Smearing retransformation was used to assess medical expenditures, and Negative Binomial regression was used for missed work days. Results: Normal weight individuals with diabetes, dyslipidemia, or hypertension had significantly greater medical expenditures than those without the respective condition ($6,006 (5,124–6,887), $4,760 (4,102–5,417), $3,911 (3,345–4,476)) and obesity significantly exacerbated this effect ($7,986 (7,397–8,574), $7,636 (7,072–8,200), $6,197 (5,745–6,649); $2007; all P < 0.05). In addition, diabetes, dyslipidemia, and hypertension resulted in greater missed work days (3.1 (0.94–6.21), 3.2 (0.42–7.91), 1.4 (0.0–3.52)) (all P < 0.05 except hypertension), which resulted in greater lost productivity ($433, $451, $199) and obesity significantly exacerbated the deleterious effect on work days (8.7 (4.44–15.2), 5.5 (2.18–10.5), 4.5 (2.92–6.34)) and lost productivity ($1,217, $763, $622) (all P < 0.05). In addition, medical expenditures increased for increasing weight category and increasing number of risk factors. Discussion: Obesity significantly exacerbates the deleterious effect of diabetes, dyslipidemia, and hypertension on medical expenditures and productivity loss in the United States. Obesity is preventable and public health efforts need to be undertaken to prevent its alarming increase in order to reduce the incidence and effect of cardiometabolic risk factors.     

Current Estimates of the Economic Cost of Obesity in the United States

This study was undertaken to update and revise the estimate of the economic impact of obesity in the United States. A prevalence-based approach to the cost of illness was used to estimate the economic costs in 1995 dollars attributable toobesity for type 2 diabetes mellitus, coronary heart disease (CHD), hypertension, gallbladder disease, breast, endometrial and colon cancer, and osteoarthritis. Additionally and independently, excess physician visits, work-lost days, restricted activity, and bed-days attributable to obesity were analyzed cross-sectionally using the 1988 and 1994 National Health Interview Survey (NHIS). Direct (personal health care, hospital care, physician services, allied health services, and medications) and indirect costs (lost output as a result of a reduction or cessation of productivity due to morbidity or mortality) are from published reports and inflated to 1995 dollars using the medical component of the consumer price index (CPI) for direct cost and the all-items CPI for indirect cost. Population-attributable risk percents (PAR%) are estimated from large prospective studies. Excess work-lost days, restricted activity, bed-days, and physician visits are estimated from 88,262 U. S. citizens who participated in the 1988 NHIS and 80,261 who participated in the 1994 NHIS. Sample weights have been incorporated into the NHIS analyses, making these data generalizable to the U. S. population. The total cost attributable to obesity amounted to $99. 2 billion dollars in 1995. Approximately $51. 64 billion of those dollars were direct medical costs. Using the 1994 NHIS data, cost of lost productivity attributed to obesity (BMI≥30) was $3. 9 billion and reflected 39. 2 million days of lost work. In addition, 239 million restricted-activity days, 89. 5 million bed-days, and 62. 6 million physician visits were attributable to obesity in 1994. Compared with 1988 NHIS data, in 1994 the number of restricted-activity days (36%), bed-days (28%), and work-lost days (50%) increased substantially. The number of physician visits attributed to obesity increased 88% from 1988 to 1994. The economic and personal health costs of overweight and obesity are enormous and compromise the health of the United States. The direct costs associated with obesity represent 5. 7% of our National Health Expenditure in the United States .     

Long-term care for the elderly. The future of nursing homes.

Continuing growth in the number of impaired elderly persons necessitates a continued reliance on nursing homes to care for at least those who are most impaired or most lacking in other supports, despite dissatisfaction over the quality of nursing home services and anxiety about the costs. Nursing home care now costs more than $30 billion annually, half of which comes from governmental sources. The Medicaid program, in particular, is central to all aspects of the nursing home industry. Private long-term care insurance is unlikely to solve the problem of nursing home financing. Rationalizing public expenditures will hinge critically on greater clarity as to just what roles nursing homes are expected to fulfill in the system of care, especially how they are supposed to relate to other services provided to Medicare beneficiaries.     

mAbs

The twenty two monoclonal antibodies (mAbs) currently marketed in the U.S. have captured almost half of the top-20 U.S. therapeutic biotechnology sales for 2007. Eight of these products have annual sales each of more than $1 B, were developed in the relatively short average period of six years, qualified for FDA programs designed to accelerate drug approval, and their cost has been reimbursed liberally by payers. With growth of the product class driven primarily by advancements in protein engineering and the low probability of generic threats, mAbs are now the largest class of biological therapies under development. The high cost of these drugs and the lack of generic competition conflict with a financially stressed health system, setting reimbursement by payers as the major limiting factor to growth. Advances in mAb engineering are likely to result in more effective mAb drugs and an expansion of the therapeutic indications covered by the class. The parallel development of biomarkers for identifying the patient subpopulations most likely to respond to treatment may lead to a more cost-effective use of these drugs. To achieve the success of the current top-tier mAbs, companies developing new mAb products must adapt to a significantly more challenging commercial environment.     

Economic Analysis of a School‐Based Obesity Prevention Program

Objective: To assess the cost‐effectiveness and cost‐benefit of Planet Health, a school‐based intervention designed to reduce obesity in youth of middle‐school age children. Research Methods and Procedures: Standard cost‐effectiveness analysis methods and a societal perspective were used in this study. Three categories of costs were measured: intervention costs, medical care costs associated with adulthood overweight, and costs of productivity loss associated with adulthood overweight. Health outcome was measured as cases of adulthood overweight prevented and quality‐adjusted life years (QALYs) saved. Cost‐effectiveness ratio was measured as the ratio of net intervention costs to the total number of QALYs saved, and net‐benefit was measured as costs averted by the intervention minus program costs. Results: Under base‐case assumptions, at an intervention cost of $33, 677 or $14 per student per year, the program would prevent an estimated 1.9% of the female students (5.8 of 310) from becoming overweight adults. As a result, an estimated 4.1 QALYs would be saved by the program, and society could expect to save an estimated $15, 887 in medical care costs and $25, 104 in loss of productivity costs. These findings translated to a cost of $4305 per QALY saved and a net saving of $7313 to society. Results remained cost‐effective under all scenarios considered and remained cost‐saving under most scenarios. Discussion: The Planet Health program is cost‐effective and cost‐saving as implemented. School‐based prevention programs of this type are likely to be cost‐effective uses of public funds and warrant careful consideration by policy makers and program planners.     

Chronomodulated chemotherapy: clinical value and possibilities for dissemination in the United States

Modern medicine has been relatively slow to apply chronotherapeutic principles to standard oncologic practice. Despite the impressive body of evidence supporting the use of chronochemotherapy, with only a rare exception most oncology clinics in the United States lack the expertise and capability to implement it. At the same time, American medicine has increasingly come to recognize the importance of toxicity mitigation, cytoprotection, and quality of life for patients undergoing cancer treatment. However, toxicity mitigation strategies such as chronomodulated infusional chemotherapy and novel cytoprotective agents are not widely embraced by U.S. physicians. This article explores some reasons why this situation exists, including the influence of non-medical biases that may affect management decisions on the application of chemotherapy. The author conducted a survey of U.S. companies representing the three private insurance payers available (HMO, PPO, Indemnity) as well as representatives of Medicare and Medicaid. Responses to the survey confirmed that U.S. insurers do not at present officially reimburse for chronotherapy; however, changes will come about through educational efforts aimed at increasing awareness among insurers as to the clinical benefits and cost-effectiveness of this mode of treatment. At this juncture, the outlook for cancer chronotherapy as a first-line approach to the treatment of metastatic cancer in the United States remains uncertain. Under the current method of insurance reimbursement, the advancement of chronotherapy in the United States is threatened despite evidence that such treatment is both therapeutically sound and cost-effective.