An Unhealthy America: The Economic Burden of ... - Milken Institute

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An Unhealthy AmericaMilken InstituteMENTAL DISORDERSIn a given year, approximately 26.2 percent of Americans over age 18 suffer from one or more mental conditions,including major depression, mild depression, bipolar disorder, or various anxiety disorders, such as panic, obsessivecompulsivedisorder, and phobias. Even though mental disorders are widespread, only 6 percent, or one person in 17,suffer from serious mental illness. All these diseases are a significant source of disability annually. 62Treatment costs consist primarily of prescription medications and, to a lesser extent, professional services. In 2003,professional services (principally, physicians and therapists) accounted for only 27 percent of spending on mentaldisorders. Prescription drugs accounted for approximately 40 percent. Clearly, therapeutic drugs play a crucial role ittreating these diseases, and new medications are expected to have a profound impact on treatment costs.Age Demographics OnlyMental disorders do not appear to be diseases of the aging process. For example, the median age at onset formajor depression is thirty-two, while the median age at onset of bipolar disorder is twenty-five. However, fromonset, these diseases tend to affect patients for long periods, in many instances for the rest of their lives. Thus,aging trends will affect prevalence rates and PRC. We hold age-specific prevalence rates at their 2003 levelsand find that prevalence increases from 10.4 percent of the adult population in 2003 to 13.9 percent in 2023. Theaging of the population alone will increase PRC by 17.5 million, an increase of 57.7 percent over PRC of 30.3million in 2003.Baseline ScenarioExcessive alcohol consumption, as measured by adults “at risk” of consuming more than two drinks per day, isexpected to remain unchanged at the 2003 level of 5.8 percent of the adult population. Other behavioralfactors, such as illicit drug use and stress, are expected to contribute to rising prevalence. By 2023, prevalencewill be found in approximately 14.3 percent of the adult population. By then, PRC will total roughly 46.7 million,or 53.8 percent more than in 2003.Based upon the projections on medical care cost growth, expenditures per PRC increase from $1,509 in 2003to $2,862 in 2023, or by approximately 89.7 percent. Surprisingly, treatment costs exhibit the third-highestgrowth rate among the chronic diseases in this study, after prostate cancer treatment spending (90.8 percent)and “other cancers” (92.5 percent). Total treatment expenditures grow from $45.8 billion to $135.2 billion, anincrease of 195.3 percent. The nation will spend roughly $1.5 trillion cumulatively over the next twenty years intreatment costs.Optimistic ScenarioWhile the origins of most mental disorders are complex and may have a hereditary or environmentalcomponent, behavioral factors can also affect the prevalence and severity of these conditions. The proportionof the population “at risk” of excessive alcohol consumption no longer remains constant but declines by 1.6percentage points by 2023. This behavioral change lowers PRC prevalence by approximately 5.8 million.Even so, the prevalence rate will rise throughout the projection period, reaching 11.9 percent of the population62. http://www.nimh.nih.gov/healthinformation/statisticsmenu.cfm.[ 113 ]
An Unhealthy AmericaMilken Instituteby 2023. This prevalence rate is a full percentage point lower than that of the baseline scenario.Expenditures per PRC run 9.2 percent lower ($265 less) than in the baseline by 2023. Total treatment expendituresgrow 134.1 percent between 2003 and 2023, reaching $107.2 billion.Direct Avoidable CostsBehavioral changes lower future treatment expenditures by an appreciable amount. The difference betweenthe baseline and optimistic expenditure projections gives us an estimate of the avoidable costs. By 2023,expenditures are 20.9 percent lower ($28.0 billion less) than in the baseline. The cumulative difference over theprojection interval is $196.6 billion. Only heart disease (at a staggering $561.7 billion) and hypertension ($179.6million) show higher direct avoidable costs.Mental DisordersMental DisordersPRC (Thousands)Expenditures per PRC ($) Total (US$ Billions)Expenditures PRC* Expenditures/PRCDemographicsYear Disease Only Baseline Optimistic (Billions) Baseline (Millions) Optimistic (Thousands)Baseline Optimistic2003 Cancer 30,338 30,338 30,338 48.1 1,509 10.61,509 45.8 4.545.82023 Breast 47,850 Cancer 46,673 40,910 5.5 2,862 1.12,597 135.2 4.8107.2Percent ChangeColon Cancer 3.9 0.3 11.52003-2023 57.7 53.8 34.8 89.7 72.1 195.3 134.1Source: Milken Institute Lung Cancer 6.3 0.4 17.1Prostate Cancer 4.3 1.0 4.1Other Cancers 28.0 7.7 3.6Pulmonary Conditions 45.2 49.2 0.9DiabetesMental Disorders27.1- Avoidable13.7CostsMental Disorders2.0Hypertension Avoidable 32.5 Costs 36.8 0.9US$ BillionsHeart Disease 64.7 19.2 3.430Expenditures PRC* Expenditures/PRCStrokeExpenditures13.6PRC*2.4Expenditures/PRCDisease(Billions) (Millions) (Thousands) 5.6Disease Mental Disorders (Billions) 45.8 (Millions) 30.3 (Thousands)Cancer 1.52548.1 10.6 4.5Cancer Total 277.0 48.1 162.2 10.6 4.5Breast Cancer 5.5 1.1 4.8 1.7PRC: BreastColon Population CancerCancer Reporting Condition 5.53.91.10.3 11.54.8Colon Cancer 203.9 0.3 11.5Lung Cancer 6.3 0.4 17.1Lung Cancer 6.3 0.4 17.1Prostate Cancer 4.3 1.0 4.1Prostate 15Other CancersCancer28.04.3 1.07.74.13.6Other Cancers 28.0 7.7 3.6Pulmonary Conditions 45.2 49.2 0.9Pulmonary 10DiabetesConditions 45.227.149.213.70.92.0Diabetes 27.1 13.7 2.0Hypertension 32.5 36.8 0.9Hypertension 532.5 36.8 0.9Heart Disease 64.7 19.2 3.4HeartStrokeDisease 64.713.619.22.43.45.6Stroke 013.6 2.4 5.6Mental DisordersMental Disorders2005 2008 2011 45.845.82014 30.330.32017 2020 2023 1.5Total1.5Source: Milken Institute 277.0 162.2 1.7Total 277.0 162.2 1.7PRC: Population Reporting ConditionPRC: Population Reporting ConditionC. State-Level FindingsThe methodology for calculating disease-specific expenditure projections at the state level mirrors that established forobtaining state-level PRC figures and treatment expenditures in the “Historical Direct Costs” section. Projecting theMEPS-based data over the twenty-year period, from 2003 to 2023, allows us to examine the consequences of thosetrends and the future impacts across states.[ 114 ]
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