Health Affairs

Posting date: September 26, 2005

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Health Affairs, 10.1377/hlthaff.w5.r42
Copyright © 2005 by Project HOPE

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Disability And Health Care Spending Among Medicare Beneficiaries

Michael E. Chernew ^1*, Dana P. Goldman ², Feng Pan ³, Baoping Shang ⁴

¹ Michael Chernew is a professor in the Department of Health Management and Policy, University of Michigan School of Public Health, in Ann Arbor.
² Dana Goldman is corporate chair and director of health economics at RAND in Santa Monica, California.
³ Feng Pan is a doctoral candidate in the Department of Health Management and Policy.
⁴ Baoping Shang is a fellow at the Pardee RAND Graduate School.

^*Corresponding author.

Abstract

This paper forecasts the impact of changing disability rates on spending by Medicare beneficiaries. We adjust for differential changes in spending by the disabled because the composition of the disabled population and the intensity of their treatment are changing. Among community-dwelling elderly, spending growth among the least disabled grew more quickly than among the most disabled, which offsets some of the cost savings associated with declining disability rates. Using estimates of spending trends by disability category, we project that the cost savings associated with improved disability rates will not dramatically slow Medicare spending in the long run.

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

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