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Attribution of Health Care Costs to Diseases

Attribution of Health Care Costs to Diseases

Does the Method Matter?

Chapter:
(p.173) 6 Attribution of Health Care Costs to Diseases
Source:
Measuring and Modeling Health Care Costs
Author(s):
Allison B. RosenAna AizcorbeTina HighfillMichael E. ChernewEli LiebmanKaushik GhoshDavid M. Cutler
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226530994.003.0007

Cost of illness (COI) studies focus on allocating health expenditures to a comprehensive set of diseases. Various techniques have been used to allocate spending to diseases. We compare spending attributed to diseases using three approaches: one based on the principal diagnosis listed on each encounter’s claim, a second based on all diagnoses listed on the encounter, and a third based on decomposing a person’s total annual spending to their conditions. The study sample is large: 2.3 million commercially insured individuals under age 65. Results indicate significant differences in the allocations from the different approaches. The two claims-based encounter approaches allocate 78% of overall spending to diseases, while the person approach allocates 95% of spending to diseases. The large unallocated spending in the claims-based approach is due largely to lack of diagnosis codes for prescription medications. Spending was concentrated in a small number of conditions; the 10 most expensive diseases account for 40% of total spending with the person approach and about 18% of spending with the primary-diagnosis and all-diagnoses encounter approaches. Future research needs to pay careful attention to the choice of method in allocating spending to diseases, especially when research uses prescription medication claims data.

Keywords:   cost attribution, MarketScan data, primary-encounter approach, all-encounter approach, person-based approach

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