Examining costs of chronic conditions in a Medicaid population.

PURPOSE To compare health care costs and their components in patients with chronic illnesses. DESIGN Quasi-experimental retrospective database analysis of an integrated state-Medicaid dataset. METHODS Nine chronic illnesses and 28 two-disease combinations were evaluated in 284,060 patients. Dependent variables were total cost and the component costs (hospital, physician, home health and medical supplies, and pharmacy). Statistical analysis included analysis of variance (ANOVA) and multiple analysis of variance (MANOVA). RESULTS The nine chronic illnesses studied were: psychosis, depression, cardiovascular illness, congestive heart failure, diabetes, acid peptic illness, respiratory illness/asthma, hypertension, and anxiety. Psychosis and depression patients had the highest mean yearly costs at $6,964 and $5,505, respectively. Highest component costs were mental health practitioners for psychosis and hospital costs for depression. All other conditions had significantly lower yearly costs. Component costs consisted primarily of pharmacy and hospital costs. Psychosis was a component in 5 of the 7 most costly chronic-disease concurrences. The highest disease-concurrence mean cost was for psychosis and depression ($18,318). CONCLUSIONS The unique resource needs of different chronic illnesses should be considered in benchmarking and evaluating chronic-disease management programs.