News release: New MDH report finds health costs eight times higher for those with chronic disease

News Release
January 27, 2016

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New MDH report finds health costs eight times higher for those with chronic disease

A new report by the Minnesota Department of Health (MDH) finds that having a chronic disease can be costly for Minnesotans. Insured residents who have one or more chronic diseases spent an average $12,800 a year on health care services in 2012.

For the first time, Minnesota can place dollar figures on the state’s chronic disease spending thanks to data gathered from the Minnesota All Payer Claims Database (MN APCD). In 2012, Minnesota’s total bill for chronic disease was $22.7 billion. That works out to an annual average for payers, insurers and individuals of $12,800 for each insured resident with one or more chronic disease, such as diabetes, asthma or congestive heart failure. That is nearly eight times the $1,600 average spending associated with an insured resident without a chronic condition.

“This report shows the significant financial toll chronic disease is taking on individuals, our communities and our state,” said Minnesota Health Commissioner Dr. Ed Ehlinger. “We cannot afford to treat our way out of this crisis. We must more strongly focus on preventing chronic disease or delaying its progression by investing in healthier communities, public health and primary care.”

While Minnesotans’ overall rate of chronic disease is lower than the national average, about 35 percent of insured Minnesotans in 2012 had at least one chronic condition. More than half of those had multiple chronic conditions. Living with multiple chronic conditions adds, on average, an additional $4,000 to $6,000 in health care expenses per condition.

Chronic diseases are ongoing illnesses or conditions that often need to be managed through medical treatments and therapies. Examples include heart disease, asthma, cancers and diabetes. These diseases can often be delayed or prevented through early identification, clinical treatments and lifestyle changes.

The report also found patients’ costs vary significantly by location within Minnesota, even when treating the same conditions. The widest differences occurred among patients with kidney (renal) failure. For example, average annual medical spending by patients with chronic renal failure who lived in Houston County was about $24,690 compared to the average spending for a resident with the same condition in Stevens County of $50,760 per patient. Note the county costs reflect the residents’ cost of care, which they could have received in or outside of the county where they live.

“Seeing these costs made me reflect on the huge incentive we all have to live healthier lives,” said Isanti County Commissioner Susan Morris. “It also made me optimistic that our county can use this data to focus our attention on our greatest health needs, and hopefully in the future, we can drill down to figure out what’s driving cost differences and help our residents be better consumers of health care.”

Care for patients with at least one chronic condition accounted for 83 percent of all medical care spending in the state in 2012. High blood pressure affects more than 900,000 insured Minnesotans. Care for this group of patients, including for their chronic diseases, cost nearly $13.5 billion and accounted for almost half of all medical spending for the insured in 2012. The report analyzes health care spending, but does not include other economic costs related to chronic disease such as those of lost productivity or absences from work.

“The American Heart Association (AHA) is supportive of use of the All Payer Claims Database as a public health data tool that provides us better chronic disease information than we have access to currently,” said Justin Bell, government relations director for AHA Midwest Affiliate. “Learning more about the demographics, costs and prevalence of heart disease helps us advance our fight against the disease and better prioritize limited resources.”

MDH was able to conduct this research using the MN APCD, which was created by the Minnesota Legislature in 2008. Through research, MN APCD can support efforts to improve health care delivery in Minnesota and help prioritize public health investment decisions by filling critical information gaps related to health care costs, quality and use. The database collects medical care claims transactions from public and private insurance that has been stripped of identifiers, such as names, social security numbers or addresses. The database collects medical care claims transactions from public and private insurance. Sixteen other states collect this data or are developing similar claims databases.

For a copy of the report, see Publications Using the MN APCD.


Media inquiries:

Scott Smith
MDH Communications