People with chronic conditions such as heart disease, Alzheimer’s disease, lung disease, and depression are
healthcare’s largest, highest-cost, and fastest-growing service group. Over 125 million Americans have one
or more chronic conditions.1 The number of Americans with one or more chronic conditions is projected to
increase by more than one percent each year through 2030.
The personal and societal costs of this problem are staggering. Seventy-eight percent of all medical costs
are for people with chronic conditions. Spending on people with chronic conditions is projected to double
between 2000 and 2010. The 20 percent Medicare beneficiaries with five or more chronic conditions
account for two-thirds of Medicare spending. Nearly 30 percent of all Medicare expenditures are for
people dually eligible for Medicare and Medicaid, and almost 50 percent of all Medicare beneficiaries with
Alzheimer’s disease are dually eligible for Medicare and Medicaid. In 1999 at least 7.4 million workingage
Americans with chronic conditions lacked health insurance.7 Over 45 percent of health care
expenditures for non-elderly employees are for people with three or more chronic conditions.
Source: National Chronic Care Consortium, "Check List For Chronic Care Reform" by Richard J. Bringewatt (August 2003)
1 Anderson, Gerard. Presentation at the 13th Annual Conference of the National Academy of Social Insurance, Section
IV, Washington, D.C., January 25, 2001.
2 Shin-Yi and Green, Projection of Chronic Illness Prevalence and Cost Inflation, RAND, October 2000.
3 The Household Component of the 1996 Medical Expenditure Panel Survey (MEPS), sponsored by the Agency for
Healthcare Research and Quality.
4 Zhang N., Wu, A., Weller, W, and Anderson, G. Unpublished data on the prevalence of chronic conditions. CMS.
National Health Care Expenditures Projections: 2000-2010. CMS Web site, 2001.
5 Partnership for Solutions, Medicare Standard Analytic File, 1999.
6 Health Care Financing Administration, data from the Medicare Current Beneficiary Survey, 1996.
7 Reed, Marie C., and Tu, Ha T., Triple Jeopardy: Low Income, Chronically Ill and Uninsured in America. Issue Brief
No. 49, February 2002. Washington, D.C.: Center for Studying Health System Change.
8 Johns Hopkins, Unpublished Report on Analysis of Claims Data for Large National Employer-Sponsored health
Plan, 2003.
9 K J. Arrow, “Uncertainty and the Welfare Economics of Medical Care”, American Economic Review 50, no 5(1963)
941-973.
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