The Role of Nutrition in Maintaining Health in the Nation's Elderly Evaluating Coverage of Nutrition Services for the Medicare Population (2000) / Chapter Skim
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14 Economic Policy Analysis
14 Economic Policy Analysis
Pages 274-309
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With regard to new nutrition services, this category of service is not included in current Medicare coverage and thus is evaluated in this analysis as mainly Part B outpatient services for nutrition therapy. In some 274
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EVALUATION METHODOLOGIES Several criteria have been proposed to evaluate the economic merits of expanded coverage for nutrition services. From a federal budgetary perspective, the simplest criterion is to compute the estimated impact of expanded coverage to overall Medicare expenditures.
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Optimal resource allocation requires comparable evaluation of proposed nutrition therapy expenditures with competing uses of the same funds. Even if nutrition services result in positive net costs to the Medicare program, these may still be justified public expenditures if they produce sufficiently improved health.
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COST ESTIMATES To assist policymakers and other stakeholders, and to gauge the approximate budgetary impact of its recommendations, likely Medicare reimbursement costs associated with proposed coverage for nutrition services were evaluated for the period of lanuary 1, 2000 to December 31, 2004. While fully explained in this chapter, a summary of underlying assumptions is included in Appendix H
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Accurate estimates of the fiscal impact of these adverse events for the Medicare program require detailed actuarial analysis beyond the scope of this study. Therefore "net Medicare costs" that incorporate the health benefits of nutrition services were not explicitly computed.
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For purposes of cost estimation, the committee assumed that of the remaining Medicare beneficiaries who either do not have one of the nutrition-related diagnoses indicated or are under the age of 65, 25 percent would be eligible for one annual nutrition therapy session. Patient demand for covered services are assumed similar to the scenarios for hypertension and hyperlipidemia for purposes of cost calculations.
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At a minimum, Table 14.1 implies that at least 75 percent of all Medicare beneficiaries have at least one identified ailment potentially requiring nutrition intervention. Estimated Medicare Population Changes The estimated population of current and new Medicare beneficiaries
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Estimation of Nutrition Services Utilization Patients with specific conditions are likely to receive nutrition therapy given the proposed expansion in Medicare coverage. The number and type of covered visits and the accompanying costs are influenced by Medicare policies, by the pattern of services offered by qualified providers, and by patient demand for covered services.
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For the 65 years and older population, estimates were further adjusted to reflect 25 percent associated changes in Part B Medicare premiums following standard Congressional Budget Office practice. Several important benefits associated with expanded nutrition coverage such as reduced incidence of coronary heart disease were also explored.
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of expanded coverage. Existing studies suggest that most Medicare beneficiaries with pertinent conditions will not utilize nutrition services, even when these services are fully reimbursed.
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Alternatively, the overall Medicare population may be less motivated to seek nutrition services than the military or Group Health beneficiaries previously studied. Finally, epidemiological developments such as the increased prevalence of obesity (Mokdad et al., 1999)
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Non-Medicare-covered costs such as lost work time to obtain nutrition services and the cost (or savings) of food or nutrition supplements are not included in these figures.
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(%) Single Diagnosis COLDLY only 3 1 5 124 8 HTNd only 3 1 5 138 8 Heart failure 3 1 10 28 15 DMe only 3 1 12 18 21 Renal diseasef 3 1 7 10 12 Combination Diagnoses HTN & 1~ LDL 4 1 5 269 8 DM & HTN 5 1 12 63 21 DM & 1~ LDL 5 1 12 40 21 HTN & 1~ LDL & DM 6 1 12 78 21 Eligible patients with none of the above conditions" 1 1 5 106 8 Medicare portion of estimated chargesh $873 million Adjusted Medicare portion after corresponding .
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~ Assuming that Medicare Part B premiums will increase to recover 25% of associated increase in Medicare costs.
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and 197 sessions per 1,000 in the military population studied (ADA, 1999~. As with diabetes, a range of plausible values for the high-utilization and lowutilization scenarios were chosen that, in the committee's clinical judgment, captured the reasonable range of patient use of nutrition services.
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ECONOMICALLY SIGNIFICANT AVERTED COSTS Direct reimbursements provide the simplest estimate of Medicare costs. However, these estimates do not capture the full budgetary implications of coverage for nutrition services because they neglect important cost savings and also expenditures likely to result from improved nutritional status.
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Finally, it is inappropriate to assume additive averted costs or social benefits within a population of individuals who typically have multiple diagnoses and comorbidities. Cost Savings Documented in the Group Health Study In part because of the significant methodological concerns mentioned above, little evidence was available to evaluate the cost savings associated with a population-wide provision of nutrition services.
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Because of the large savings associated with these diagnoses, Sheils and colleagues estimated that coverage of either dietitian services for diabetes alone, or coverage for diabetes and cardiovascular disease, would be cost saving from the perspective of the Medicare program as a whole (see Table 14.3~. Although dietitian coverage for diabetes and cardiovascular disease for all Medicare recipients was estimated (Shells et al., 1999)
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Given the resulting difficulty in estimating net impact on the overall Medicare budget associated with coverage of nutrition therapy, specific diagnoses for which nutrition therapy is likely to be especially cost-effective or even cost saving were examined. Clinicians and policy analysts involved identified several diagnostic categories for which well-implemented nutrition therapy would bring important and beneficial economic effects.
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Diabetes provides perhaps the best-documented example of potential benefits associated with nutrition therapy. Per capita Medicare expenditures are 50 percent higher among patients with diabetes than among the overall Medicare patient group (Krop et al., 1998~.
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It should also be noted that Gilmer and coworkers do not include patients who died over the study period. These exclusions may understate the value of nutrition services given UKPDS data which suggest that the incidence of heart attacks and sudden death may be reduced through more intensive intervention.
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Although nutrition therapy is not cost saving, direct medical charges are substantially offset by savings associated with the prevention of adverse health events. Within the baseline scenario, the cost of averted adverse events is estimated to be $231 million.
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($ million) Diabetes only 31 20 Diabetes and hyperlipidemia 70 32 Diabetes and hypertension 111 89 Diabetes and hyperlipidemia 136 90 and hypertension a This column shows estimated charges from the baseline scenario of Table 14.2.
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Nutrition supplements for osteoporosis management appear to be more cost-effective than widely cited Stalin drugs for control of CHD (Bendich et al., 1999; Chapuy et al., 1992; Cummings et al., 1995; Jonsson et al., 1995; Tengs et al., 1995~. Cardiovascular Diseases Chapter 5 reviewed existing clinical evidence regarding dyslipidemia, hypertension, and heart failure.
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While nutrition therapy does not appear to be cost saving for hypertension, as it had appeared in the case of diabetes, such treatment does yield important clinical and policy effects. Although the precise magnitude of these effects is unclear given current data, Table 14.6 presents approximate estimates of potential averted strokes and CHD events among patients with simple hypertension in the baseline scenario.
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To gauge the potential impact of nutrition therapy coverage on the incidence of coronary heart disease, epidemiological findings from the Framingham study were used to estimate baseline risks and the approximate relative risk reduction associated with nutrition intervention (Kronmal et al., 1993; Wilson et al., 1998~. The efficacy of nutrition therapy in reducing LDL levels was modeled as the principal mechanism of reduced CHD risk for patients with hypertension, diabetes mellitus, and dyslipidemia (Wilson et al., 1998~.
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301 to Do An' ~ i*
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among Medicare Beneficiaries Low Baseline Utilization Estimated Reduction in Utilizatic Scenarioa CHD Events Given 3% Scenariot (percent) Reduction in LDLb (percent)
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Within the baseline scenario, excluding patient coinsurance payments, Medicare's estimated reimbursement cost for expanded coverage of nutrition therapy is $1.43 billion over the same period. The accompanying estimated Medicare cost per averted CHD event is therefore approximately $80,000.2 2In several respects, this calculation also understates the benefits associated with coverage of nutrition therapy.
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Further evidence of the potential economic benefits associated with nutrition therapy is also provided in Table 14.7. Given reasonable assumptions regarding treatment efficacy and service use, initial estimates indicate that within the baseline scenario, the cost of averted CHD events is estimated to be $89 million.
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Given the strong link between improved nutrition and critical health outcomes and the low average costs of nutrition interventions, expanded Medicare coverage for outpatient nutrition therapy is likely to be cost-effective when compared with other Medicare expenditures for patient care. · Estimates were not made for the 5.62 million beneficiaries likely to receive nutrition therapy for other diagnosis such as chronic renal insufficiency and heart failure.
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· Existing oversight and reimbursement systems must be scrutinized to assure adequate provision of nutrition services in acute care, dialysis centers, home care, and skilled nursing and long-term care facilities where nutrition is believed to be included in prospective payment systems. Where existing Medicare policies already provide coverage for nutrition services within overall reimbursement systems, administrative oversight is essential to ensure that high-quality nutrition services are actually delivered.
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1997. The cost to health plans of poor glycemic control.
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1999. The estimated costs and savings of medical nutrition therapy: The Medicare population.
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1998. Prediction of coronary heart disease using risk factor categories.
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