The Cost of Health Care - Patients With Terminal Diseases

Terminal patients often receive high-technology intensive care that simply prolongs the dying process. Studies by the Health Care Financing Administration (HCFA; now the CMS) found that "medical services generally become much more intense as death approaches." In the United States the fear of malpractice suits, physicians trained to fight death to the end, and government reimbursement encourage continued medical care at all costs.

Acquired Immunodeficiency Syndrome

Acquired immunodeficiency syndrome (AIDS) is a set of signs, symptoms, and certain diseases occurring together when the immune system of a person infected with the human immunodeficiency virus (HIV) becomes extremely weakened. According to the Centers for Disease Control and Prevention (CDC), advances in treatment during the mid- to late 1990s slowed the progression of HIV infection to AIDS and led to dramatic decreases in AIDS deaths. The decrease in AIDS deaths continued from 1999 to 2003 with a 3% decrease in deaths. Nonetheless, the number of AIDS diagnoses increased an estimated 4% from 1999 to 2003. In 2003 an estimated 43,171 people became infected with HIV. The CDC estimated that in 2003 18,017 people died of AIDS. Cumulatively through 2003, 929,985 people had been diagnosed with AIDS, 524,060 people had died from the syndrome, and 405,926 were living with it.

In 2003 the federal government spent $16.7 billion on research, education and prevention, medical care, and cash assistance for HIV/AIDS patients—a nearly ninety-nine-fold increase over the $209 million spent in 1985. More than half (61.3%, or $10.2 billion) was spent on medical care. (See Table 9.14.)

In 2006 the per-person cost of AIDS medication in the U.S. was approximately $10,000 annually. In other parts of the world costs have been brought down to as low as $140 per person per year. Former President Bill Clinton suggested that those lower prices could drive down prices in the U.S. as well ("Clinton: Worlds AIDS Fight May Lower Drug Costs," ABC News, February 19, 2006, http://abcnews.go.com/GMA/Health/story?id=1637770&page=1&CMP=OTCRSSFeeds0312).

MEDICAID ASSISTANCE

The financing of health care for AIDS patients has increasingly become the responsibility of Medicaid, the entitlement program that provides medical assistance to low-income Americans. This is due, in large part, to the rising incidence of AIDS among poor people and intravenous drug users—the groups least likely to have private health insurance. Further, many patients who might once have had private insurance through their employers lose their coverage when they become too ill to work. These individuals eventually turn to Medicaid and other public programs for medical assistance.

Some people, whose employment and economic condition previously afforded the insurance coverage

TABLE 9.11 Medicare payments and annual percent change, by benefit type, fiscal years 1998–2005 "Table 4. Medicare Payments and Annual Percent Change, by Benefit type, Fiscal Years 1998–2005," in Basic Statistics about Home Care, National Association for Home Care & Hospice, January 2006, unpublished data

TABLE 9.11
Medicare payments and annual percent change, by benefit type, fiscal years 1998–2005
	1998	1999	2000	2001	2002	2003	2004	2005*
Notes: *Fiscal year 2005 numbers are estimated.
SOURCE: "Table 4. Medicare Payments and Annual Percent Change, by Benefit Type, Fiscal Years 1998–2005," in Basic Statistics about Home Care, National Association for Home Care & Hospice, January 2006, unpublished data
Benefit type	Amount ($ billions)
Managed care	31.9	37.4	39.8	42.1	33.9	36.5	39.8	52.3
Inpatient hospitals	87.0	85.7	86.5	93.2	102.1	108.6	113.6	119.4
Skilled nursing facilities	13.6	11.5	10.6	12.4	14.7	14.5	16.5	17.0
Home health	14.0	9.4	9.2	9.3	10.0	10.1	11.2	12.5
Hospice	2.1	2.5	2.8	3.4	4.5	5.9	7.2	8.6
Physicians	32.3	33.4	36.0	40.4	44.2	47.3	52.0	56.1
Outpatient hospitals	10.5	8.5	8.4	10.1	12.8	14.7	16.9	18.6
Other	14.6	15.7	17.2	20.3	23.7	27.4	30.0	35.2
Durable medical equipment	4.1	4.3	4.6	5.3	6.2	7.6	7.9	8.1
Prescription drugs	n/a	n/a	n/a	n/a	n/a	n/a	0.2	1.2
Total, part A	134.3	129.3	126.2	136.0	144.1	153.1	163.8	178.9
Total, part B	75.8	79.1	88.9	100.5	108.1	119.5	131.4	146.0
Total, part D	n/a	n/a	n/a	n/a	n/a	n/a	0.2	1.2
Total Medicare	210.1	208.4	215.1	236.5	252.1	272.6	295.3	329.0
	Percent change from previous year by benefit type
Managed care		17.2	6.4	5.8	−19.5	7.7	9.0	31.4
Inpatient hospitals		−1.5	0.9	7.7	9.5	6.4	4.6	5.1
Skilled nursing facilities		−15.4	−7.8	17.0	18.5	−1.4	13.8	3.0
Home health		−32.9	−2.1	1.1	7.5	1.0	10.9	11.6
Hospice		19.1	12.0	21.4	32.4	31.1	22.0	19.4
Physicians		3.4	7.8	12.2	9.4	7.0	9.9	7.9
Outpatient hospitals		−19.1	−1.2	20.2	26.7	14.8	15.0	10.1
Other		7.5	9.6	18.0	16.7	15.6	9.5	17.3
Durable medical equipment		4.9	7.0	15.2	17.0	22.6	3.9	2.5

they needed, find their situation changed once they test positive for HIV. Some may become virtually ineligible for private health insurance coverage. Others require government assistance because insurance companies can declare HIV infection a "pre-existing condition," making it ineligible for payment of insurance claims. In addition, some insurance companies limit AIDS coverage to relatively small amounts.

THE RYAN WHITE COMPREHENSIVE AIDS RESOURCES EMERGENCY (CARE) ACT

Currently, the CARE Act (PL 101-381) is the only federal program providing funds specifically for medical and support services for HIV/ AIDS patients. It was initially passed in 1990 and was reauthorized in 1996 and 2000. Appropriations of CARE funds follow one of four formulas:

Under the Title I formula, the federal government provides emergency assistance to metropolitan areas disproportionately affected by the HIV epidemic. To qualify for Title I financing, eligible metropolitan areas (EMAs) must have more than two thousand cumulative AIDS cases reported during the preceding five years and a population of at least five hundred thousand. In fiscal year (FY) 2005, fifty-one EMAs in twenty-one states, the District of Columbia, and Puerto Rico received $587.4 million. (See Table 9.15.)
Under the Title II formula, funds are provided to state governments. Ninety percent of Title II funds are allocated based on AIDS patient counts, while 10% are distributed through competitive grants to public and nonprofit agencies. In addition, states receive funding to support AIDS Drug Assistance Programs (ADAPs), which provide medication to low-income HIV patients who are uninsured or underinsured. In 2005 alone the federal government provided nearly $1.1 billion for ADAPs funds and for improved health care and support services for HIV/AIDS patients. (See Table 9.16.)
Title III funds are designated for Early Intervention Services (EIS) and Planning. EIS grants support outpatient HIV services for low-income people in existing primary care systems, and Planning grants aid those working to develop HIV primary care.
Title IV programs focus on the development of assistance for women, infants, and children.

Cancer

Cancer, in all its forms, is very expensive to treat. Compared with other diseases, there are more options for cancer treatment, more adverse side effects that require treatment, and a greater potential for unrelieved pain. According to the American Cancer Society's 2006 Cancer Facts & Figures, the overall estimated cost of

TABLE 9.12 Number of Medicare-certified home care agencies, by type, selected years 1967–2003 "Table 1. Number of Medicare-Certified Home Care Agencies, by Auspice, for Selected Years, 1967–2003," in Basic Statistics about Home Care, National Association for Home Care & Hospice, updated 2004, http://www.nahc.org/04HC_Stats.pdf (accessed March 1, 2006)FIGURE 9.2 Number of current home health care patients, 1992, 1994, 1996, 1998, 2000 •Current Patient Trends. Number of Current Home Health Care Patients: United States, 1992, 1994, 1996, 1998, 2000,• in National Home and Hospice Care Data, Centers for Disease Control and Prevention, National Center for Health Statistics, http://www.cdc.gov/nchs/about/major/nhhcsd/nhhcschart.htm (accessed November 7, 2005)

TABLE 9.12
Number of Medicare-certified home care agencies, by type, selected years 1967–2003
Year	Freestanding agencies						Facility-based agencies
Year	Visiting nurse associations^a	Combination agencies^b	Public agencies^c	Proprietary agencies^d	Private not-for-profit agencies^a	Other freestanding agencies^f	Hospital-based agencies^g	Rehabilitation facilities^h	Skilled nursing facilitiesⁱ	Total
Note: 2003 data obtained in January, 2004.
^aVisiting nurse associations are freestanding, voluntary, nonprofit organizations governed by a board of directors and usually financed by tax-deductible contributions as well as by earnings.
^bCombination agencies are combined government and voluntary agencies. These agencies are sometimes included with counts for visiting nurse associations.
^cPublic agencies are government agencies operated by a state, county, city, or other unit of local government having a major responsibility for preventing disease and for community health education.
^dProprietary agencies are freestanding, for-profit home care agencies.
^ePrivate not-for-profit agencies are freestanding and privately developed, governed, and owned nonprofit home care agencies. These agencies were not counted separately prior to 1980.
^fOther freestanding agencies that do not fit one of the categories for freestanding agencies listed above.
^gHospital-based agencies are operating units or departments of a hospital. Agencies that have working arrangements with a hospital, or perhaps are even owned by a hospital but operated as separate entities, are classified as freestanding agencies under one of the categories listed above.
^hRefers to agencies based in rehabilitation facilities.
ⁱRefers to agencies based in skilled nursing facilities.
SOURCE: "Table 1. Number of Medicare-Certified Home Care Agencies, by Auspice, for Selected Years, 1967–2003," in Basic Statistics about Home Care, National Association for Home Care & Hospice, updated 2004, http://www.nahc.org/04HC_Stats.pdf (accessed March 1, 2006)
1967	549	93	939	0	0	39	133	0	0	1,753
1975	525	46	1,228	47	0	109	273	9	5	2,242
1980	515	63	1,260	186	484	40	359	8	9	2,924
1985	514	59	1,205	1,943	832	4	1,277	20	129	5,983
1990	474	47	985	1,884	710	0	1,486	8	101	5,695
1991	476	41	941	1,970	701	0	1,537	9	105	5,780
1992	530	52	1,083	1,962	637	28	1,623	3	86	6,004
1993	594	46	1,196	2,146	558	41	1,809	1	106	6,497
1994	586	45	1,146	2,892	597	48	2,081	3	123	7,521
1995	575	40	1,182	3,951	667	65	2,470	4	166	9,120
1996	576	34	1,177	4,658	695	58	2,634	4	191	10,027
1997	553	33	1,149	5,024	715	65	2,698	3	204	10,444
1998	460	35	968	3,414	610	69	2,356	2	166	8,080
1999	452	35	918	3,192	621	65	2,300	1	163	7,747
2000	436	31	909	2,863	560	56	2,151	1	150	7,152
2001	425	23	867	2,835	543	68	1,976	1	123	6,861
2002	430	27	850	3,027	563	79	1,907	1	119	7,007
2003	439	27	888	3,402	546	74	1,776	0	113	7,265

cancer to the nation in 2005 was amount, $74 billion was due to direct medical costs—the total of all health expenditures. Of the remainder, $17.5 billion was the cost of lost productivity due to illness, and $118.4 billion was the cost of lost productivity due to premature death.

MEDICARE, CLINICAL TRIALS, AND CANCER

Some health insurance plans cover all or a portion of the costs associated with clinical trials (research studies that offer promising new anticancer drugs and treatment to patients enrolled). Policies vary, and some plans decide whether they will pay for clinical trials on a case-by-case basis. Some health plans limit coverage to patients for whom no standard therapy is available. Others cover clinical trials only if they are not much more expensive than standard treatment, and many choose not to cover any costs involved with clinical trials.

On June 7, 2000, President Clinton revised Medicare payment policies to enable beneficiaries to participate in clinical trials. Prior to this policy change, many older adults were prevented from participating in clinical trials because they could not afford the costs associated with the trials.

TABLE 9.13 Nursing home residents 65 years of age and over, by age, sex, and race, 1973–74, 1985, 1995, and 1999 "Table 102. Nursing Home Residents 65 Years of Age and Over, according to Age, Sex, and Race: United States, 1973–74, 1985, 1995, and 1999," in Health, United States, 2006, Centers for Disease Control and Prevention, National Center for Health Statistics, November 2005, http://www.cdc.gov/nchs/data/hus/hus05.pdf (accessed February 27, 2006)

TABLE 9.13
Nursing home residents 65 years of age and over, by age, sex, and race, 1973–74, 1985, 1995, and 1999
[Data are based on a sample of nursing home residents]
Age, sex, and race	Residents				Residents per 1,000 population
Age, sex, and race	1973–74	1985	1995	1999	1973–74	1985	1995	1999
^aAge adjusted by the direct method to the year 2000 population standard using the following three age groups: 65-74 years, 75-84 years, and 85 years and over.
^bBeginning in 1999 the instruction for the race item on the questionnaire was changed so that more than one race could be recorded. In previous years only one racial category could be checked. Estimates for racial groups presented in this table are for residents for whom only one race was recorded. Estimates for residents where multiple races were checked are unreliable due to small sample sizes and are not shown.
Notes: "…"=Category not applicable. Excludes residents in personal care or domiciliary care homes. Age refers to age at time of interview. Civilian population estimates used to compute rates for the 1990s are 1990-based postcensal estimates, as of July 1.
SOURCE: "Table 102. Nursing Home Residents 65 Years of Age and Over, according to Age, Sex, and Race: United States, 1973–74, 1985, 1995, and 1999," in Health, United States, 2006, Centers for Disease Control and Prevention, National Center for Health Statistics, November 2005, http://www.cdc.gov/nchs/data/hus/hus05.pdf (accessed February 27, 2006)
Age
65 years and over, age adjusted^a	…	…	…	…	58.5	54.0	45.9	43.3
65 years and over, crude	961,500	1,318,300	1,422,600	1,469,500	44.7	46.2	42.4	42.9
65-74 years	163,100	212,100	190,200	194,800	12.3	12.5	10.1	10.8
75-84 years	384,900	509,000	511,900	517,600	57.7	57.7	45.9	43.0
85 years and over	413,600	597,300	720,400	757,100	257.3	220.3	198.6	182.5
Male
65 years and over, age adjusted^a	…	…	…	…	42.5	38.8	32.8	30.6
65 years and over, crude	265,700	334,400	356,800	377,800>	30.0	29.0	26.1	26.5
65-74 years	65,100	80,600	79,300	84,100	11.3	10.8	9.5	10.3
75-84 years	102,300	141,300	144,300	149,500	39.9	43.0	33.3	30.8
85 years and over	98,300	112,600	133,100	144,200	182.7	145.7	130.8	116.5
Female
65 years and over, age adjusted^a	…	…	…	…	67.5	61.5	52.3	49.8
65 years and over, crude	695,800	983,900	1,065,800	1,091,700	54.9	57.9	53.7	54.6
65-74 years	98,000	131,500	110,900	110,700	13.1	13.8	10.6	11.2
75-84 years	282,600	367,700	367,600	368,100	68.9	66.4	53.9	51.2
85 years and over	315,300	484,700	587,300	612,900	294.9	250.1	224.9	210.5
White^b
65 years and over, age adjusted^a	…	…	…	…	61.2	55.5	45.4	41.9
65 years and over, crude	920,600	1,227,400	1,271,400	1,279,600	46.9	47.7	42.3	42.1
65-74 years	150,100	187,800	154,400	157,200	12.5	12.3	9.3	10.0
75-84 years	369,700	473,600	453,800	440,600	60.3	59.1	44.9	40.5
85 years and over	400,800	566,000	663,000	681,700	270.8	228.7	200.7	181.8
Black or African American^b
65 years and over, age adjusted^a	…	…	…	…	28.2	41.5	50.4	55.6
65 years and over, crude	37,700	82,000	122,900	145,900	22.0	35.0	45.2	51.1
65-74 years	12,200	22,500	29,700	30,300	11.1	15.4	18.4	18.2
75-84 years	13,400	30,600	47,300	58,700	26.7	45.3	57.2	66.5
85 years and over	12,100	29,000	45,800	56,900	105.7	141.5	167.1	183.1

Alzheimer's Disease

Liesi E. Hebert et al, in "Alzheimer Disease in the U.S. Population: Prevalence Estimates Using the 2000 Census" (Archives of Neurology, vol. 60, no. 8, August 2003), estimate that in 2000 there were 4.5 million people with Alzheimer's disease (AD) in the U.S. population. AD is a form of dementia characterized by memory loss, behavior and personality changes, and decreasing thinking abilities. Care and treatment of those suffering from dementia cost the United States as much as $100 billion each year.