High-Cost Patients Split in 3 Camps, Based on Insurance Status

The profile of high-cost patients in a Massachusetts ACO differed greatly, depending on their enrollment in Medicare, Medicaid, or a commercial plan.

The phenomenon of a small number of patients accounting for most of a payer’s costs is consistent across Medicaid and commercial coverage, according to a new paper in the New England Journal of Medicine. But how those costs pile up is quite different in the 3 patient populations, write Brian W. Powers and Sreekanth K. Chaguturu, MD, both of Harvard Medical School.

Powers and Chaguturu offer insights into how accountable care organizations (ACOs) can direct interventions at the different patient groups, tailored to their distinct needs. (Powers has taken part in presentations to the ACO and Emerging Healthcare Delivery Coalition, an initiative of The American Journal of Managed Care.)

The pair examined 2014 claims data involving the costliest 1% of patients in each payer category for Partners HealthCare of Massachusetts, and uncovered some interesting facts:

· Among Medicare patients, the costliest 1% had an average of 8 chronic conditions, and most had cardiovascular risk factors. Common conditions were congestive heart failure and chronic kidney disease, suggesting the need for better care coordination. The average annual spending for these patients was $146,584.

· Medicaid patients with high costs also had multiple problems, but the striking feature here was the high incidence of mental illness; almost a fifth had bipolar disorder. The situation seems to cry out for better care management strategies, especially among dual eligibles (Medicaid and Medicare). Average annual spending for these high cost patients was $85,347.

· For those with commercial insurance, the most reason for high spending was a catastrophic injury or neurological event—something harder to predict. Fewer chronic conditions were seen here, and the chief challenge among this group is management of high-cost specialty pharmaceuticals. Average spending for the high-cost patients here was $101,359.

As the authors note, the challenge for ACOs will be figuring out management strategies as they take control—and responsibility—for patients who have not previously had insurance. Moving away from the old fee-for-service model, by itself, may not be sufficient to bring down spending. There will have to be incentives in place to reward good care and cost-reduction of high-risk populations, they write, and contracts that spell out what these incentives are.

Most of all, there must be buy-in from the doctors—without them, the best ACO plans will not come to fruition. “Physicians in ACOs, therefore, have a critical role in engaging patients and matching them with specific programs according to clinical need.”


Powers BW, Chaguturu SK. ACOs and high-cost patients. N Engl J Med. 374;3:203-205.

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