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

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

Jul 30, 2023 229 likes •516 views

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 Todays Presentation General trends in chronic disease in the U.S.

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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

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Today’s Presentation

  • General trends in chronic disease in the U.S.
  • Findings from the Milken study
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Exam ple of Rising Prevalence of Disease: Diabetes, 1 9 9 4 and 2 0 0 4

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 Surveillance System. Data computed by the Division of Diabetes Translation. Available at http: / / www.cdc.gov/ diabetes/ statistics/ prev/ state/ fPrev1994and2004.htm

The prevalence of diabetes increased in nearly every state between 1994 and 2004

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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

7 9 % 7 9 % 7 6 %

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent Increase Due to Rise in Treated Prevalence and Increased Population

Mental Disorders Cerebrovascular Disease Diabetes Percent Change in Spending Due t o Rise in Treat ed Prevalence and I ncreased Populat ion, 1987-2000

Source: Thorpe et. al., “Which Medical Conditions Account for the Rise in Health Care Spending,” Health Affairs, 25 August 2004.

Discussion of the m agnitude of health care spending grow th usually does not take into account changes in disease prevalence and dem ographic factors behind spending grow th.

  • - Kenneth Thorpe,

Em ory University

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U.S. Health Care Spending for Patients w ith Chronic Conditions

51% 15% 23% 20% 18% 47% 12% 14%

0% 20% 40% 60% 80% 100% Population Health Care Expenditures

0 Conditions 1 Condition 2 Conditons 3 or More Conditions

Source: Gerard Anderson, analysis, prepared for PhRMA, of the Medical Expenditure Panel Survey, 2004.

65 percent of all health care spending goes to treat patients with 2 or more chronic conditions

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Per Capita Health Spending for Patients w ith Chronic Conditions

Average Yearly Per Capita Health Care Spending for Persons with Chronic Diseases

$2,753 $5,026 $7,381 $10,091 $16,819 $994

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000

1 2 3 4 5+ Number of Chronic Conditions

Annual spending for individuals with two chronic conditions is more than 5 times greater than for those without any condition

Source: Gerard Anderson, analysis of the Medical Expenditure Panel Survey, 2004.

Spending is alm ost 1 7 tim es higher for individuals w ith five or m ore chronic diseases, com pared to spending for those w ithout any condition.

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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

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 Reforms.” Systems Dynamics Review, Oct 30 2007. Vol. 23, No.2-3, pgs.313-343.

118 125 133 141 149 157 164 171

100 120 140 160 180 1995 2000 2005 2010 2015 2020 2025 2030

Year

Number of People with Chronic Diseases (millions) “Chronic illness is a m ajor health challenge… The aging

  • f the U.S. population

and increases in risk factors such as

  • besity suggest that

chronic illnesses w ill be an even greater problem in future years.”

  • Hom er, Hirsch, and

Milstein

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

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  • 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

The Econom ic Burden of Chronic Disease: Tw o Paths, Tw o Choices

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  • 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

The Econom ic Burden of Chronic Disease: Tw o Paths, Tw o Choices

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The Hum an Cost: Millions of Am ericans Have a Chronic Disease

Number Reporting Seven Common Chronic Disease, 2003 United States

Total: 109 Million Americans; 162 Million Cases

1 3 .7 1 9 .1 3 0 .3 3 6 .8 4 9 .2 2 .4 1 0 .6

1 0 2 0 3 0 4 0 5 0 6 0

Stroke Cancers Diabetes Heart Disease Mental Disorders Hypertension Pulmonary conditions

Population Reporting Condition (Millions)

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The Hum an Cost: Millions of Am ericans Have a Chronic Disease

Number Reporting Seven Common Chronic Disease, 2003 California

Total: 109 Million Americans; 162 Million Cases

1 ,5 7 3 1 ,8 6 0 2 ,5 3 4 3 ,6 6 0 5 ,3 0 1 2 4 1 1 ,1 5 5

1 0 0 0 2 0 0 0 3 0 0 0 4 0 0 0 5 0 0 0 6 0 0 0

Stroke Cancers Diabetes Heart Disease Mental Disorders Hypertension Pulmonary conditions

Population Reporting Condition (Millions)

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Top Quartile Second Third Bottom Quartile

“The Milken State Chronic Disease Index” States in Top Quartile have the Lowest Rates of Seven Common Chronic Diseases

The Hum an Cost: The Burden of Chronic Disease Varies by State

1. West Virginia 2. Tennessee 3. Arkansas 4. Kentucky 5. Mississippi 6. Pennsylvania 7. Rhode Island 8. Maine 9. Oklahoma

  • 10. Alabama

States with Highest Rates of Chronic Disease:

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The Econom ic Cost: Chronic Diseases Account for Billions in Health Care Spending & Lost Output

Economic Impact of Chronic Disease, 2003 United States

$27 $45 $65 $46 $33 $48 $22 $105 $94 $105 $171 $280 $271 $14

$- $50 $100 $150 $200 $250 $300 $350 Stroke Diabetes Pulmonary Conditions Heart Disease Mental Disorders Hypertension Cancers

Billions

Total Treatment Expenditures = $277B Total Lost Economic Output = $1,047B

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Sources of Lost Productivity

Absenteeism “Presenteeism ”

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Lost Productivity by Source, 2 0 0 3 ( in US$ Billions)

The Econom ic Cost: Lost Productivity From Chronic Disease Costs Our Econom y Billions Each Year

Total Lost Productivity in 20 0 3 = $ 1 .0 Trillion in U.S., and $ 1 0 6 Billion in California Alone

Presenteeism I ndividual $ 8 2 8 .2 Lost W orkdays I ndividual $ 1 2 7 .5 Presenteeism Caregiver $ 8 0 .2 Lost W orkdays Caregiver $ 1 0 .8

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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
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Chronic Disease Rates Are Expected to Grow Dram atically

62% 31% 53% 39% 41% 29% 54%

0% 10% 20% 30% 40% 50% 60% 70%

Cancers Pulmonary Conditions Diabetes Hypertension Heart Disease Stroke Mental Disorders

Population Growth = 19% Expected Grow th in Prevalence of Major Chronic Conditions 2 0 0 3 to 2 0 2 3

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500 1000 1500 2000 2500 3000 3500 4000 4500 Total Economic Costs (US$ Billions) 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Lost Economic Output Treatment Expenditures

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 California, cost is over $ 4 3 0 billion annually by 2 0 2 3 -- $ 3 6 0 in lost productivity and over $ 7 0 billion in treatm ent expenditures annually

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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
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20 40 60 80

Cancers Pulmonary Condt ions Diabet es Hypert ension Heart Disease St roke Ment al Disorders Reported Cases ( Millions)

On Current Path With Reasonable Increase in Prevention Efforts

Improvements in the prevention and management of chronic disease could avoid

  • ver 40 million cases of seven common chronic conditions in 2023

Source: Devol, Ross and Armen Bedroussian, An Unhealthy America: Economic Burden of Chronic Disease. Milken Institute, October 2007.

  • 5 .8
  • 0 .6
  • 3 .1
  • 9 .4
  • 9 .6
  • 2 .8
  • 9 .1

The Alternative Path: W e Could Reduce Chronic Disease Rates Dram atically

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The Alternative Path: …And Reduce Econom ic Costs in 2 0 2 3 by $ 1 .1 Trillion

I m provem ents in prevention and early detection could reduce econom ic costs of chronic disease by $ 1 .1 trillion in 2 0 2 3 :

  • $ 9 0 5 billion from

gains in productivity

  • $ 2 1 8 billion from

avoided treatm ent expenditures

$ 3 ,0 3 0 $ 2 ,1 9 2 $ 1 ,3 2 4 $ 1 ,1 2 3 $ 2 9 7

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500

2003 2013 2023

Projected Annual Econom ic Costs 2 0 0 3 – 2 0 2 3 ( Billions) United States

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The Alternative Path: …And Reduce Econom ic Costs in 2 0 2 3 by $ 1 .1 Trillion

Projected Annual Econom ic Costs 2 0 0 3 – 2 0 2 3 ( Billions) California

I m provem ents in prevention and early detection could reduce econom ic costs of chronic disease in California by $ 1 1 7 billion in 2 0 2 3 :

  • $ 9 8 billion from

gains in productivity

  • $ 1 9 billion from

avoided treatm ent expenditures

$ 3 1 4 $ 2 2 4 $ 1 3 3 $ 1 1 7 $ 3 0

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500

2003 2013 2023

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Avoidable Econom ic Costs Attributable to Decline in Obesity Projected Estim ates, 2 0 2 3

For Example, Lower Obesity Rates Would Avoid Over $800 Billion in Economic Costs in the Year 2023

$52 $100 $73 $73 $39 $87 $118 $312 $0 $100 $200 $300 $400 $500 Diabetes Hypertension Heart Disease Cancers

Avoidable Economic Impact (Billions)

Obesity Other Factors

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Long-Term Forgone Econom ic Output

Change in Real GDP Betw een Baseline and Optim istic Scenarios

1 2 3 4 5 6 US$ Trillions 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Year

On this alternative path, U.S. GDP could increase by as much $5.7 Trillion Annually by 2050

Longer term impact: Chronic Disease Prevention & Management Can Accelerate GDP Growth

W HY I S THI S?

  • Healthy Am ericans are

m ore productive Am ericans

  • Healthy Am ericans are

able to get higher levels

  • f education
  • The higher an incom e

earner’s hum an capital, the greater the probability of investm ent in their children’s and grandchildren's education

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California’s Gross Dom estic Product in 2 0 5 0 *

Current versus Alternative Path

If Californian’s take action today, California’s annual GDP can be increased by as much as 18 percent, or $908 Billion, by 2050

Longer term impact: Chronic Disease Prevention & Management Can Accelerate GDP Growth

$ 9 0 8 Billion Potential Real Gain in GDP $6,096 Billion GDP in 2050, Alternative Path $5,188 Billion GDP in 2050, Current Path

* Inflation adjusted (2003 dollars)

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Econom ic Burden of Chronic Disease: Conclusions and Recom m endations

Conclusions:

  • Lost Productivity Surpasses Treatment as the Cause of

Economic Burden

  • Early Interventions and Medical Innovations Improve Quality

and Longevity of Life

  • Good Health Is an Investment in Economic Growth

Recom m endations from Milken I nstitute:

  • Incentives for Prevention and Early Intervention
  • We need private-public partnerships to incentivize

patients and providers to prevent chronic disease effectively

  • “Healthy Body Weight Initiative”
  • We need a strong, long-term national com m itm ent to

promote health, wellness, and healthy body weight