Posting date: June 27, 2005

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Health Affairs, 10.1377/hlthaff.w5.317
Copyright © 2005 by Project HOPE

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The Rising Prevalence Of Treated Disease: Effects On Private Health Insurance Spending

¹ Ken Thorpe is the Robert W. Woodruff Professor and Chair of the Department of Health Policy and Management, Emory University, in Atlanta, Georgia.
² Curtis Florence is an assistant professor at Emory University, in Atlanta, Georgia.
³ David Howard is an assistant professor at Emory University, in Atlanta, Georgia.
⁴ Peter Joski is a research assistant.

^*Corresponding author.

Abstract

In this paper we present a new framework for understanding the factors driving the growth in private health insurance spending. Our analysis estimates how much of the rise in spending is attributable to a rise in treated disease prevalence and spending per treated case. Our results reveal that the rise in treated disease prevalence, rather than the rise in spending per treated case, was the most important determinant of the growth in private insurance spending between 1987 and 2002. A rise in population risk factors and the introduction of new technologies underlie these trends.

Key Words: Business Of Health, Chronic Care, Consumer Issues, Health Promotion/Disease Prevention, Insurance Coverage, Managed Care - Consumers, Health Spending, Insurance Market

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