COST OF HEALTH-CARE FOR A COMMUNITY OF OLDER ADULTS IN AN URBAN ACADEMIC HEALTH-CARE SYSTEM

BACKGROUND: Urban academic medical centers provide care for large popu lations of vulnerable older adults. These patients often suffer a disp roportionate share of chronic illnesses, disabilities, and social stre ssors that may increase health care costs. OBJECTIVE: To describe the distribution and content of total healthcare costs accrued over a 4-ye ar period by a community of older adults cared for in an urban academi c healthcare system and to describe high-cost patients and utilization patterns. DESIGN: A cohort study. SETTING: A tax-supported public hea lthcare system consisting of a 450-bed hospital and seven community-ba sed ambulatory care centers. PATIENTS: 12,581 patients aged 60 years a nd older who had at least two ambulatory visits and/or one hospitaliza tion within the healthcare system from 1993 through 1995. MEASUREMENTS : Patient demographic and clinical characteristics, hospital and ambul atory utilization rates, and all healthcare costs accrued from 1993 th rough 1996 were determined. Costs were estimated from the perspective of the healthcare system using cost to charge ratios. MAIN RESULTS: Th e mean patient age was 70 years, 60% were women, 44% were Black, and 8 3% were covered by Medicare and/or Medicaid. Nearly 25% of patients we re obese, 15.8% had a history of smoking, and 15.5% had evidence of ma lnutrition. The mean number of ambulatory visits per year was 4.3 (+/- 7.2), and 38.1% of patients had been hospitalized one or more times. Within the 4-year window, 24.1% of patients had missed five or more ap pointments with their primary care physicians, 32.7% of patients had f ive or more unscheduled clinic visits, and 12.5% had five or more emer gency room visits. Total health care costs for 4 years for this cohort of older adults was $125.2 million dollars, with per capita annual me an costs of $3893. Expenditures associated with hospitalizations accou nted for 63.6% of healthcare costs. Total inpatient and outpatient cos ts for the 38% of patients hospitalized at least once accounted for 85 .3% of all health care expenditures. Patients who died in the hospital did not accrue significantly greater costs than patients who died out of the hospital. Simulations of a random 5% adverse selection of high -cost patients among two capitated systems resulted in cost shifts of $11.1 million. Recorded smoking history, obesity, and low serum albumi n were significantly associated with excess costs.CONCLUSIONS: Healthc are costs are concentrated in a significant minority of older adults. Costs accrued in conjunction with hospital stays dominate healthcare e xpenditures for this cohort of older adults. However, most older adult s (83%) have one or fewer hospital episodes in a 4-year period. Althou gh patients who died accrued greater healthcare costs, these costs wer e not higher when the death occurred in the hospital. Self-care behavi ors are an important target for interventions to reduce costs.