The Cost of Health Conditions in a Health Maintenance Organization

Abstract

In this retrospective cohort analysis of all adults who were members of Kaiser Permanente, Northern California, between July 1995 and June 1996 (N = 2,076,303), the authors estimated the prevalence, average annual costs per person, and percentage of total direct medical expenditures attributable to each of 25 chronic and acute conditions. Ordinary least squares regression was used to adjust for age, gender, and comorbidities. The costs attributable to the 25 conditions accounted for 78 percent of the health maintenance organization’s total direct medical expense for this age-group. Injury accounted for a higher proportion (11.5 percent) of expenditures than any other single condition. Three cardiovascular conditions—ischemic heart disease, hypertension, and congestive heart failure—together accounted for 17 percent of direct medical expense and separately accounted for 6.8 percent, 5.7 percent, and 4.0 percent, respectively. Renal failure ($22,636), colorectal cancer ($10,506), pneumonia ($9,499), and lung cancer ($8,612) were the most expensive conditions per person per year.