An Unhealthy Am erica: The Econom ic Burden of Chronic Disease - PowerPoint PPT Presentation

An Unhealthy Am erica: The Econom ic Burden of Chronic Disease Charting a New Course to Save Lives and I ncrease Productivity and Econom ic Grow th February 2 0 0 8

Today’s Presentation • General trends in chronic disease in the U.S. • Findings from the Milken study 2

Exam ple of Rising Prevalence of Disease: Diabetes, 1 9 9 4 and 2 0 0 4 The prevalence of diabetes increased in nearly every state between 1994 and 2004 1 9 9 4 2 0 0 4 Source: US Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Division of Adult and Community Health, data from the Behavioral Risk Factor 3 Surveillance System. Data computed by the Division of Diabetes Translation. Available at http: / / www.cdc.gov/ diabetes/ statistics/ prev/ state/ fPrev1994and2004.htm

Disease Prevalence and Health Care Costs More than 75 percent of the rise in costs for three common conditions can be explained by increases in treated prevalence and population growth Percent Change in Spending Due t o Rise in Treat ed Prevalence and I ncreased Populat ion, 1987-2000 100% Discussion of the Percent Increase Due to Rise in Treated m agnitude of health Prevalence and Increased Population 90% care spending 80% grow th usually does 7 9 % 7 9 % not take into 7 6 % 70% account changes in 60% disease prevalence and dem ographic 50% factors behind 40% spending grow th. 30% -- Kenneth Thorpe, 20% Em ory University 10% 0% Mental Disorders Cerebrovascular Diabetes Disease Source: Thorpe et. al., “Which Medical Conditions Account for the Rise in Health Care Spending,” Health Affairs, 25 August 2004. 4

U.S. Health Care Spending for Patients w ith Chronic Conditions 65 percent of all health care spending goes to treat patients with 2 or more chronic conditions 100% 14% 80% 12% 47% 23% 60% 18% 40% 51% 20% 20% 15% 0% Population Health Care Expenditures 0 Conditions 1 Condition 2 Conditons 3 or More Conditions 5 Source: Gerard Anderson, analysis, prepared for PhRMA, of the Medical Expenditure Panel Survey, 2004.

Per Capita Health Spending for Patients w ith Chronic Conditions Annual spending for individuals with two chronic conditions is more than 5 times greater than for those without any condition Average Yearly Per Capita Health Care Spending Spending is for Persons with Chronic Disease s alm ost 1 7 $20,000 tim es higher $18,000 $16,819 for individuals $16,000 w ith five or $14,000 m ore chronic $12,000 diseases, $10,091 $10,000 com pared to $7,381 $8,000 spending for $5,026 those w ithout $6,000 any condition. $4,000 $2,753 $2,000 $994 $0 0 1 2 3 4 5+ Number of Chronic Conditions 6 Source: Gerard Anderson, analysis of the Medical Expenditure Panel Survey, 2004.

Projected Rates of Chronic Disease Through 2030, the number of Americans with a chronic disease is expected to increase by more than 1 percent every year Number of People with Chronic Diseases (millions) “Chronic illness is a 180 m ajor health 171 challenge… The aging 164 of the U.S. population 157 160 and increases in risk 149 factors such as 141 obesity suggest that 140 chronic illnesses w ill 133 be an even greater 125 problem in future 118 120 years.” - Hom er, Hirsch, and 100 Milstein 1995 2000 2005 2010 2015 2020 2025 2030 Year Sources: Wu, Shin-Yi and Green, Anthony. Projection of Chronic Illness Prevalence and Cost Inflation. Rand Corporation, October 2000; J. Homer, G. Hirsch, and B. Milstein. “Chronic Illness in a Complex Health Economy: The Perils and Promises of Downstream and Upstream 7 Reforms.” Systems Dynamics Review , Oct 30 2007. Vol. 23, No.2-3, pgs.313-343.

Highlights from Milken I nstitute Report: An Unhealthy Am erica: The Econom ic Burden of Chronic Disease 8

The Econom ic Burden of Chronic Disease: Tw o Paths, Tw o Choices • Chronic Disease Today: The Current Toll • The Hum an Cost • The Econom ic Cost • Chronic Disease Tomorrow: The Future Toll • The Future on Our Current Path • The Alternative Path: Cases and costs avoidable w ith reasonable action • Longer Term I m pact on GDP grow th • Conclusion and Recommendations 9

The Econom ic Burden of Chronic Disease: Tw o Paths, Tw o Choices • Chronic Disease Today: The Current Toll • The Hum an Cost • The Econom ic Cost • Chronic Disease Tomorrow: The Future Toll • The Future on Our Current Path • The Alternative Path: Cases and costs avoidable w ith reasonable action • Longer Term I m pact on GDP grow th • Conclusion and Recommendations 10

The Hum an Cost : Millions of Am ericans Have a Chronic Disease Number Reporting Seven Common Chronic Disease, 2003 United States 4 9 .2 Pulmonary conditions 3 6 .8 Hypertension 3 0 .3 Mental Disorders 1 9 .1 Heart Disease 1 3 .7 Diabetes 1 0 .6 Cancers 2 .4 Stroke 0 1 0 2 0 3 0 4 0 5 0 6 0 Population Reporting Condition (Millions) Total: 109 Million Americans; 162 Million Cases 11

The Hum an Cost : Millions of Am ericans Have a Chronic Disease Number Reporting Seven Common Chronic Disease, 2003 California 5 ,3 0 1 Pulmonary conditions 3 ,6 6 0 Hypertension 2 ,5 3 4 Mental Disorders 1 ,8 6 0 Heart Disease 1 ,5 7 3 Diabetes 1 ,1 5 5 Cancers 2 4 1 Stroke 0 1 0 0 0 2 0 0 0 3 0 0 0 4 0 0 0 5 0 0 0 6 0 0 0 Population Reporting Condition (Millions) Total: 109 Million Americans; 162 Million Cases 12

The Hum an Cost: The Burden of Chronic Disease Varies by State “The Milken State Chronic Disease Index” States in Top Quartile have the Lowest Rates of Seven Common Chronic Diseases States with Highest Rates of Chronic Disease: 1. West Virginia 2. Tennessee 3. Arkansas 4. Kentucky 5. Mississippi 6. Pennsylvania 7. Rhode Island 8. Maine 9. Oklahoma Top Quartile 10. Alabama Second Third Bottom Quartile 13

The Econom ic Cost: Chronic Diseases Account for Billions in Health Care Spending & Lost Output Economic Impact of Chronic Disease, 2003 United States Cancers $48 $271 Hypertension $33 $280 Mental Disorders $46 $171 Heart Disease $65 $105 Pulmonary Conditions $45 $94 Total Treatment Expenditures = $277B Diabetes $27 $105 Total Lost Economic Output = $1,047B Stroke $14 $22 $- $50 $100 $150 $200 $250 $300 $350 Billions 14

Sources of Lost Productivity Absenteeism “Presenteeism ” 15

The Econom ic Cost: Lost Productivity From Chronic Disease Costs Our Econom y Billions Each Year Lost Productivity by Source, 2 0 0 3 Lost ( in US$ Billions) W orkdays I ndividual $ 1 2 7 .5 Presenteeism Presenteeism Caregiver I ndividual $ 8 0 .2 $ 8 2 8 .2 Lost W orkdays Caregiver $ 1 0 .8 Total Lost Productivity in 20 0 3 = $ 1 .0 Trillion in U.S., and $ 1 0 6 Billion in California Alone 16

The Econom ic Burden of Chronic Disease: Tw o Paths, Tw o Choices • Chronic Disease Today: The Current Toll • The Hum an Cost • The Econom ic Cost • Chronic Disease Tomorrow: The Future Toll • The Future on Our Current Path • The Alternative Future: Cases and costs avoidable w ith reasonable action • Longer Term I m pact on GDP grow th • Conclusion and Recommendations 17

Chronic Disease Rates Are Expected to Grow Dram atically Expected Grow th in Prevalence of Major Chronic Conditions 2 0 0 3 to 2 0 2 3 70% 62% 60% 54% 53% 50% 41% 39% 40% 31% 29% 30% 20% Population Growth = 19% 10% 0% Cancers Pulmonary Diabetes Hypertension Heart Stroke Mental Conditions Disease Disorders 18

Our Current Path : Chronic Disease Will Cost U.S. Economy Over $4 Trillion Annually by 2023… Current Path: Com bined Value of Treatm ent Expenditures and Productivity Losses in U.S. For 4500 California , cost is over 4000 Lost Economic Output $ 4 3 0 billion Treatment Expenditures 3500 Total Economic Costs annually by 2 0 2 3 -- $ 3 6 0 3000 (US$ Billions) in lost 2500 productivity and over 2000 $ 7 0 billion in 1500 treatm ent expenditures 1000 annually 500 0 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 19

The Alternative Path : I m provem ents in Prevention, Behavior, and Treatm ent Cases and Treatm ent Costs Under “Alternative Path” – The Assum ptions: From 2003 to 2023, we assume “reasonable improvements ,” such as: • A reduction in number of obese persons (to 1998 levels of 19% ) • A continued reduction in smoking to 15% • A decline in “at risk drinking” (from 6% to 4% ) • An increase in physical activity (from 75% to 83% ) • A decrease in high cholesterol levels (to 2000 levels of 32% ) • An improvement in air quality • A gradual decline in illicit drug use • A modest improvement in early intervention and treatment • Lower health care cost growth 20

The Alternative Path : W e Could Reduce Chronic Disease Rates Dram atically Improvements in the prevention and management of chronic disease could avoid over 40 million cases of seven common chronic conditions in 2023 Ment al Disorders On Current Path - 5 .8 St roke - 0 .6 With Reasonable Increase Heart Disease - 9 .4 in Prevention Efforts Hypert ension - 9 .6 Diabet es - 2 .8 Pulmonary Condt ions - 9 .1 Cancers - 3 .1 0 20 40 60 80 Reported Cases ( Millions) Source: Devol, Ross and Armen Bedroussian, An Unhealthy America: Economic Burden of Chronic Disease. Milken Institute, October 2007. 21