Medicare Spending on Older Adults Who Need Long-Term Services and Supports

Establishing the Value in Addressing Needs of LTSS Population


Experts may have overlooked a critical factor in understanding high Medicare spending and defining the high-cost, high need population: the need for long-term services and supports (LTSS). That is, being unable to eat, bathe, get dressed or perform other daily activities independently appears to be strongly related to high healthcare spending, regardless of other characteristics more commonly associated with high costs. And yet, people who need LTSS have not been a focus of program innovation, and the services they need are considered beyond the scope of the Medicare program.

We partnered with the Long-Term Care Quality Alliance to describe the relationship between older adults’ need for LTSS Medicare spending to understand if the demand for innovation to address the needs of LTSS population is supported in data.


Using the National Health and Aging Trends Survey (NHATS) with linked information regarding Medicare fee-for-service spending data and individual level information including LTSS need, we sought to answer the question: What is the relationship between LTSS need and Medicare spending when holding constant (separately) age, chronic conditions, Medicaid eligibility, and income?

Our research found that the need for LTSS is associated with high Medicare spending for older adults, even when controlling for other characteristics of high-cost, high-need populations like multiple chronic conditions and dual eligibility.


This research demonstrates that the need for LTSS may be at least as important a characteristic to guide program design as chronic illness and dual eligibility. Individuals with multiple chronic conditions and who are dually eligible for both Medicare and Medicaid incur more healthcare costs when they also need LTSS than when they do not.

The relationship between LTSS need and Medicare utilization has been reported infrequently though, perhaps due to the lack of widespread availability of information on both functional and cognitive impairment in population-based datasets.

More research is needed to better understand the experience and outcomes of beneficiaries who need LTSS in the Medicare program. Updated analysis with more recent data will also be critical to understanding whether the widely reported declines in Medicare hospitalization utilization since 2011 have been experienced by those who need LTSS.

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