Chronic Conditions Cost US Economy More Than $4.5 Trillion

The overall economic burden associated with diabetes, heart disease, dementia and other chronic medical conditions in the United States now adds up to more than $4.5 trillion, a new report has found.

While already staggering, that economic burden is projected to double within the next three decades as well, propelled by the wave of aging baby boomers soon to making landfall.

Released Monday by U.K.-based Fitch Solutions, the report reinforces the idea that home health and home care providers able to showcase their success in treating individuals with chronic conditions at a lower cost will have a leg up on their competition for the foreseeable future.


Fitch Solutions — a part of Hearst-owned Fitch Group — is a provider of credit market data, analytical tools and risk services. Fitch Group provides financial information services with operations in more than 30 countries.

“I think the key takeaway and main implication is that … if companies can develop products — and it could be pharmaceuticals, medical devices or services — that seek to lower this economic burden, then they’ll be able to command higher prices from reimbursement [streams] and payers,” Jamie Davies — head of pharmaceuticals, medical devices and health care at Fitch Solutions — told Home Health Care News. “There’s a huge opportunity here.”

The aggregate annual direct costs of the leading chronic medical conditions — diabetes, cardiovascular disease, arthritis, Alzheimer’s disease, obesity and cancer — in the U.S. currently exceed $1 trillion, according to the Fitch Solutions report. Expenses primarily stem from hospital care, physician visits, pharmaceuticals, medical devices and home-based care.


Indirect costs — which include measures such as loss of income and reduced economic productive — hover around $3.7 trillion.

The total cost of solely diagnosed diabetes in the U.S. has risen from $245 billion in 2012 to $327 billion in 2017, according to the American Diabetes Association. In general, a patient with diabetes is expected to incur health care costs more than double those faced by a healthy person.

“If a company can say, ‘This [service] will bring value. This will lower downstream health care costs,’ then that’s a real positive for them,” Davies said. “If you can prove it with data and empirical evidence, that’s even better as well to make a convincing argument for the price or cost of the intervention.”

The report from Fitch Solutions and its updated numbers on chronic condition costs may be new, but at-home care providers, policymakers, insurers and technology companies have long turned their attention to the issue.

In March, for example, online home care platform ClearCare launched a new tool to help home care agencies better handle chronic condition changes and track hospitalizations.

Meanwhile, the Centers for Medicare & Medicaid Services (CMS) announced earlier in April that — starting in 2020 — Medicare Advantage (MA) plans would be able to cover any supplemental benefits that “have a reasonable expectation of improving or maintaining the health or overall function” of beneficiaries with chronic conditions.

Additionally, wearable-technology company FitBit (NYSE: FIT) has teamed up with insurance giant Humana Inc. (NYSE: HUM) to tackle chronic conditions through a health coaching and virtual care platform.

“That’s a big interest in [chronic conditions] in the current climate,” Davies said.

Up to 60% of American adults currently live with at least one chronic condition, according to a 2017 Rand Corporation study.

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