Segmenting high-cost Medicare patients into potentially actionable cohorts.

Background: Providers are assuming growing responsibility for healthcare spending, and prior studies have shown that spending is concentrated in a small proportion of patients. Using simple methods to segment these patients into clinically meaningful subgroups may be a useful and accessible strategy for targeting interventions to control costs.

Methods: Using Medicare fee-for-service claims from 2011 (baseline year, used to determine comorbidities and subgroups) and 2012 (spending year), we used basic demographics and comorbidities to group beneficiaries into 6 cohorts, defined by expert opinion and consultation: under-65 disabled/ESRD, frail elderly, major complex chronic, minor complex chronic, simple chronic, and relatively healthy. We considered patients in the highest 10% of spending to be "high-cost."

Results: 611,245 beneficiaries were high-cost; these patients were less often white (76.2% versus 80.9%) and more often dually-eligible (37.0% versus 18.3%). By segment, frail patients were the most likely (46.2%) to be high-cost followed by the under-65 (14.3%) and major complex chronic groups (11.1%); fewer than 5% of the beneficiaries in the other cohorts were high-cost in the spending year. The frail elderly ($70,196) and under-65 disabled/ESRD ($71,210) high-cost groups had the highest spending; spending in the frail high-cost group was driven by inpatient ($23,704) and post-acute care ($24,080), while the under 65-disabled/ESRD spent more through part D costs ($23,003).

Conclusions: Simple criteria can segment Medicare beneficiaries into clinically meaningful subgroups with different spending profiles.

Implications: Under delivery system reform, interventions that focus on frail or disabled patients may have particularly high value as providers seek to reduce spending.

Level Of Evidence: IV.