Posting date: September 26, 2005

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Health Affairs, 10.1377/hlthaff.w5.r18
Copyright © 2005 by Project HOPE

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The Lifetime Burden Of Chronic Disease Among The Elderly

¹ Geoffrey Joyce is a senior economist at RAND in Santa Monica, California.
² Emmett Keeler is a senior mathematician at RAND.
³ Baoping Shang is a fellow at the Pardee RAND Graduate School.
⁴ Dana Goldman is corporate chair and director of health economics at RAND.

^*Corresponding author.

Abstract

The high costs of treating chronic diseases suggest that reducing their prevalence would improve Medicare's financial stability. In this paper we examine the impact of selected chronic diseases on the distribution of health spending and its variation over the course of disease. We also use a microsimulation model to estimate these conditions' impact on life expectancy and health spending from age sixty-five to death. A sixty-five-year-old with a serious chronic illness spends $1,000-$2,000 more per year on health care than a similar adult without the condition. However, cumulative Medicare payments are only modestly higher for the chronically ill because of their shorter life expectancy.

Key Words: Chronic Care, Demography, Elderly, Health Promotion/Disease Prevention, Medicare, Research And Technology, Health Spending

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