Trends in medicare spending across strata of resource utilization among older individuals in the United States

BACKGROUND: Health care spending is an increasing proportion of government expenditures in most Western countries. How this growth is distributed between individuals with minimal compared to high health care utilization is unknown. METHODS: We examined total and per-capita government expenditure in an observational cohort of fee-for-service U.S. Medicare enrollees aged ≥65 years from 2007 to 2018. We categorized patients into annual resource utilization strata. We examined annualized changes in adjusted spending across resource utilization strata and the distribution of spending within and across strata for a variety of health care settings. FINDINGS: Examining 314,593,489 beneficiary-years of coverage, the top 1% of beneficiaries accounted for 14.9% of all expenditures, the top 5% for 41.5%, the top 10% for 60.0%, the top 20% for 79.1%, and the top 50% for 95.7%. Annual expenditures remained relatively stable from 2007 to 2018, with annual mean change of 0.7% (standard deviation 1.1%; median 1.1%) and mean per capita change of 0.4% (standard deviation 1·6%; median 0·3%). Changes were similar across strata with mean increases <1% in all, save for the <50th percentile strata (mean annual growth=1·9%), a significant difference (p = 0.0002). The overall distribution of expenditures across health care settings remained consistent over time, with different distributions between expenditure strata. INTERPRETATION: In the U.S. from 2007 to 2018, Medicare spending has a Pareto distribution in which 80% of the costs are attributable to 20% of beneficiaries. Despite low overall Medicare spending growth from 2007 to 2018, growth has been greatest among those in the lowest spending group. FUNDING: The Commonwealth Fund (20,202,411).