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Medical Care Research and Review
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Hospital Inpatient Costs for Adults with Multiple Chronic Conditions

Bernard Friedman

Agency for Healthcare Research and Quality

H. Joanna Jiang

Agency for Healthcare Research and Quality

Anne Elixhauser

Agency for Healthcare Research and Quality

Andrew Segal

Columbia University

This article offers national estimates of the proportions of hospital inpatient cases and cost for adult, nonmaternal patients who have multiple chronic conditions. The authors employ a refined classification of chronic versus acute conditions, collapsed to no more than one condition per distinct category of condition. The number of different chronic conditions provides a simple measure of complexity, differing from measures of severity of illness that pertain to a particular episode of treatment. A multivariate regression finds that the number of chronic conditions is an independent influence on hospital cost per case, controlling for other key determinants. Patients with complex illness (e.g., 3+ or 5+ chronic conditions) have a disproportionately large effect on hospital cost per year. The identification of patients in the hospital with complex illness can help in targeting new covered services in a health plan or in risk adjusting health plan premiums. Current policies and demonstrations for the Medicare program may not be sufficient to address complex illness.

Key Words: chronic conditions • hospital cost

Medical Care Research and Review, Vol. 63, No. 3, 327-346 (2006)
DOI: 10.1177/1077558706287042
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