The High-Cost Case Phenomenon: A Way to Leverage Medical Expenditure Savings through Prevention

The term high-cost cases is applied to that fraction of a population that consistently incurs high medical expenses over a long time period (Alexandre, 1988). Numerous researchers have found that high-cost cases, who compose only a small percentage of the population of a nation, incur the majority of its medical expenditures. For example, in the United States, Garfinkel, Riley and Iannacchione (1988) reported, "Based on data from the National Medical Care Utilization and Expenditure Survey, the 10 percent of the non-institutionalized U.S. population that incurred the highest medical care charges was responsible for 75 percent of all incurred charges" (p. 41). The consistency of the high-cost case phenomenon has been documented in several studies by Schroeder, Showstack, and Roberts (1979) and by Anderson and Knickman (1984). In their analysis of 204,917 randomly selected subjects, Anderson and Knickman (1984) reported:

Individuals hospitalized in 1974 were found to have twice the rate of hospitalization in 1975, 1976, or 1977 compared with individuals who were not hospitalized in 1974. The increased rate of hospitalization remained constant throughout the 3 years. Individuals with large medical expenditures in 1974 were 20 times more likely to have large medical expenditures the following year, and this rate declined slowly in the following 2 years. (p. 143)

High-cost people are generally not hypochondriacs. Typically, these people suffer from chronic health problems. Schroeder et al. (1979) found that 47% of adult high-cost patients had chronic medical problems, whereas only 17% had an acute medical problem. In another study, which analyzed the hospital utilization of 2238 patients whose medical records were randomly selected, Zook and Moore (1980) found, "On average, the high-cost 13 percent of patients consumed as many resources as the low-cost 87 percent" (p. 996). The persistent poor health of the high-cost individual is a potential target for health promotion interventions.

Unlike the general population's chief determinant of health care utilization, which is perceived health status (Buczko, 1986), actual health status is the chief determinant of medical utilization for high-cost people. Garfinkel et al. (1988, p. 41) reported, "Health status was the strongest predictor of high-cost medical utilization, followed by economic factors." Several researchers have found that high-cost patients frequently have lifestyles that put them at greater disease risk. For example, Zook and Moore (1980, p. 996) found that "Potentially harmful personal habits (e.g., drinking and smoking) were indicated in the records of high-cost patients substantially more often than in those of low-cost patients." In an article illustrating a new method for analyzing high-cost cases, Lynch, Teitelbaum, and Main (1992) stated, "The relative risk of high cost from smoking remained consistent across all age groups" (p. 213). If the level of medical utilization of these high-cost patients could be reduced, the financial impact on the entire nation would be significant.

Research has shown that certain types of preventive interventions can significantly reduce the medical utilization and expenses of high-cost people. For example, in a study in Québec, Herron (1993) found that a stress-reduction program utilizing the Transcendental Meditation program decreased the medical payments of high-cost cases an average of 18% per year over three years (cumulative: 54%). The mechanism explaining this effect has only recently been understood. During the last ten years, a substantial body of research has found that stress has a powerful negative effect on health (Chrousos & Gold, 1992). Prolonged mental or physical stress weakens the immune system and thereby increases disease susceptibility. Almost everyone is exposed to undue stress, and hence the potential benefits of stress reduction are widespread.

Certain types of stress reduction appear to be more effective in reducing medical utilization and expenses than other preventive interventions; the outcomes of prevention programs can vary widely. For example, lifestyle interventions are probably the most widely used methods of health promotion and disease prevention. Lifestyle changes, however, can take many years to affect health status and expenses. Bly, Jones, and Richardson (1986) reported on Johnson and Johnson's Live for Life Program, which is a comprehensive attempt to develop and maintain healthier lifestyles in the corporate setting. Over a five-year period, the Live for Life group showed a slower rate of increase in medical expenses than control groups. Note that this program, which utilized several lifestyle interventions, including smoking cessation, weight control, nutrition education, and fitness and blood pressure programs, failed to reduce medical expenses (Bly et al., 1986). When lifestyle interventions are compared with certain types of stress reduction for their effectiveness in reducing medical expenditures, stress reduction produces larger expense decreases. Consequently, the most powerful stress-reduction interventions are recommended to reduce health care expenditures in high-cost groups that incur the majority of expenses in most populations.

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[The International Health Care Cost Crisis]

[The Need For Prevention: Identifying New, Cost-Effective Strategies]

[The High-Cost Case Phenomenon: A Way to Leverage Medical Expenditure Savings through Prevention]

[The Proposed Strategy]

[Conclusions and Future Research Directions]