The high costs of treating chronic diseases suggest that reducing their prevalence would improve Medicare's financial stability. In this paper the authors examine the impact of selected chronic diseases on the distribution of health spending and its variation over the course of disease. They also use a microsimulation model to estimate these conditions' impact on life expectancy and health spending from age sixty-five to death. A sixty-five-year-old with a serious chronic illness spends $1,000-$2,000 more per year on health care than a similar adult without the condition. However, cumulative Medicare payments are only modestly higher for the chronically ill because of their shorter life expectancy.
This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.