Prospective identification of patients at risk for unwarranted variation in treatment.

BACKGROUND: Understanding factors associated with treatment intensity may help ensure higher value healthcare.

OBJECTIVE: To investigate factors associated with Medicare costs among prospectively identified, seriously ill older adults and examine if baseline prognosis influences the impact of these factors.

DESIGN/SUBJECTS: Prospective observation of Health and Retirement Study cohort with linked Medicare claims.

MEASUREMENTS: We identified people with incident serious illness (a serious medical condition, for example, metastatic cancer or functional impairment); calculated subjects' one-year mortality risk; and then followed them for one year. We examined relationships between individual and regional characteristics and total Medicare costs, and then stratified analyses by one-year mortality risk: low, moderate, and high.

RESULTS: From 2002 to 2012, 5208 subjects had incident serious illness: mean age 78 years, 60% women, 76% non-Hispanic white, and 39% hospitalized in the past year. During one-year follow-up, 12% died. Total Medicare costs averaged $20,607. In multivariable analyses, indicators of poor health (e.g., cancer, advanced heart and lung disease, multimorbidity, functional impairment, and others) were significantly associated with higher costs (p < 0.05). However, among those with high mortality risk, health-related variables were not significant. Instead, African American race (rate ratio [RR] 1.56) and moderate-to-high spending regions (RR 1.31 and 1.54, respectively) were significantly associated with higher costs. For this high-risk population, residence in high-spending regions was associated with $31,476 greater costs among African Americans, and $11,162 among other racial groups, holding health constant.

CONCLUSIONS: Among seriously ill older adults, indicators of poor health are associated with higher costs. Yet, among those with poorest prognoses, nonmedical characteristics-race and regional practice patterns-have greater influence on treatment. This suggests there may be novel opportunities to improve care quality and value by assuring patient-centered, goal-directed care.