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  • Lower Health Care Increases for Adults 65 and Up May Be Linked to Shift to Home-Based Care

    In an overall spending picture researchers describe as "relatively stable" between 2002 and 2010, health care spending among adults 65 and older grew at a rate lower than all other age groups studied—a slowdown partly attributed to a Medicaid shift away from institutional care settings and toward home-based care.

    The findings, e-published in the May 6 edition of Health Affairs (abstract only available for free), analyzed health care spending over a 9-year period in aggregate as well as by age and sex. Overall, authors wrote, personal health care spending in the US was approximately $2.2 trillion, or $7,097 per person in 2010—an amount that represents an average 5.1% annual growth rate from 2002.

    Although all age ranges and both sexes experienced growth in spending during the study period, spending for adults 65 and older was reported to have the lowest rate of increase of all the age groups, with a 4.1% annual average increase. For adults in the 65 – 84 age range, that rate was even lower, at a 3.9% average.

    Researchers attribute the slower growth rates to related slowdowns in the use of institutional and hospital care. "This relatively slow growth was mainly the result of states' efforts through the Medicaid program to keep the elderly out of costly institutional care settings by using lower-cost home and personal care services," authors write, citing a "sluggish" 3.3% average annual increase for institutional care. Authors linked the similarly slower increase in hospital use (3.7%) to slower growth in Medicare Advantage payments. Over the same period of time, spending on home health care increased by 7.6% annually.

    Offsetting the slower trend among adults 65 and older were more rapid increases in spending on children, which showed an average annual increase of 5.5% Authors cited increased coverage provided by insurers as well as enrollment increases in Medicaid and the Children's Health Insurance Program as the primary drivers for the increase.

    Other findings in the report:

    • Per capita annual spending remained the highest among adults 65 and older ($18,424 in 2010).
    • Females tended to spend more than males, but the gap is closing mostly due to an increase in prescription drug use by males. In 2002, females spent about 38% more per capita than males in this area; by 2010, that difference was 25%. Authors attribute at least part of the increased male prescription drug use to increases in prescriptions for treatment of HIV, disorders of lipoid metabolism, hypertension, and hyperactivity, all of which "have higher rates of use in males than in females."
    • The recession had a "powerful" effect on health care spending overall. Between 2002 and 2008, per capita health care spending rose at an average annual rate of 5.7%; after the recession took effect in 2008, that rate slowed to 3.4%.
    • Approximately 35% of 2010 health care spending for adults 65 and older was for hospital services, 19% for physician and clinical services, and 16% for nursing and continuing care/retirement facilities and communities. Continuing care facility spending amounted to about 21% of the total in 2002.

    Research-related stories featured in News Now are intended to highlight a topic of interest only and do not constitute an endorsement by APTA. For synthesized research and evidence-based practice information, visit the association's PTNow website.

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