High-cost users: drivers of inpatient healthcare expenditure concentration in urban China

BACKGROUND: Total healthcare expenditures are concentrated among a small number of patients. To date, studies on the concentration of health care expenditures in developing countries are limited, mainly focusing on concentration measures and the demographic, clinical and socioeconomic characteristics of high-cost users (HCU). The drivers of the skewed overall distribution of health care expenditures are opaque. Using inpatient administrative claims data, this study provides new evidence on the concentration of healthcare expenditures in China; the demographic and clinical characteristics of high-cost users; and the drivers of the overall distribution of healthcare expenditures. METHODS: Utilizing administrative claims data for hospitalization in a prefecture-level city in China, we investigated the concentration of healthcare expenditure. We used recentered influence function (RIF) regression to examine the drivers of healthcare expenditure concentration, decomposing and estimating the effects of demographic and disease characteristics on the overall distribution of health care expenditures. RESULTS: Using a sample of 87,841 adults, we found extreme skewness in the distribution of inpatient medical expenditures in China, with approximately 49% of annual medical expenditures generated by the top 10% of inpatient groups. HCUs tend to be elderly and male, with high-frequency hospitalizations and long lengths of stay. In addition, healthcare expenditure concentration was related to diseases of the circulatory system, malignant neoplasms, diseases of the musculoskeletal system and connective tissue, diseases of the digestive system, injury and poisoning, and diseases of the respiratory system. Malignant and major diseases reinforced the concentration of healthcare spending, and a 10% increase in the prevalence of malignancy would result in a predicted Gini coefficient increase of 7.2%, heart disease of 0.92% and cerebrovascular disease of 1.5%. The above significant positive effects were not observed for hypertension and diabetes mellitus. CONCLUSIONS: Our study provides new insights into the concentration of inpatient medical expenditures in China, including the precise picture of HCU expenditure concentration, the drivers of HCU expenditure concentration and the magnitude of their impact. With the aging of China's population and the profound shift in the disease spectrum, policymakers need to strengthen the early detection and intervention management of specific chronic diseases and high-risk populations, especially the early diagnosis and treatment of key cancers.