Forum Session

Targeting High-Cost Medicare Beneficiaries to Improve Care and Reduce Spending: Finding the Bull’s-Eye
March 9, 2012


Sally Coberly, PhD


In 2011, Medicare spent approximately $551 billion to provide health insurance coverage to 49 million elderly and disabled beneficiaries; the Congressional Budget Office (CBO) projects that by 2020, Medicare spending will grow to $903 billion. Given concerns about the federal deficit, it is not surprising that policymakers continue to search for ways to reduce costs and make the Medicare program more efficient.  The Patient Protection and Affordable Care Act (PPACA) of 2010 created a new Center for Medicare and Medicaid Innovation to conduct demonstrations/pilots aimed at reducing costs and improving care. Several of these approaches are the latest in a long line of care coordination and disease management demonstrations and pilots that have targeted selected groups of beneficiaries. According to several analyses, including a recent CBO report, however, previous efforts have had relatively little success in producing savings. One possible explanation is that these demonstrations were not sufficiently targeted to individuals for whom cost savings were most likely to be achieved. New research suggests that the most expensive Medicare beneficiaries are those who have multiple chronic conditions and functional impairments. These findings suggest that current targeting criteria may be inadequate for identifying beneficiaries for whom coordination may both improve quality of care and achieve cost savings.

This Forum session described the characteristics and spending patterns of high-cost Medicare beneficiaries and their implications for targeting care coordination and other interventions, examined the track record of targeting within Medicare demonstrations and pilots and lessons learned regarding how to make those criteria more effective, and profiled the experience of one health system’s efforts to target and manage high-cost Medicare beneficiaries enrolled in Medicare Advantage plans.


  • Judith Feder, PhD
    Institute Fellow
    Health Policy Center
    The Urban Institute
    Professor of Public Policy
    Public Policy Institute
    Georgetown University

Related Materials

See an earlier Forum session, "Improving Care for Dual Eligible Medicare-Medicaid Beneficiaries: One Size Does Not Fit All" (January 27, 2012).

Also see "The Diversity of Dual Eligible Beneficiaries: An Examination of Services and Spending for People Eligible for Both Medicaid and Medicare," an issue brief by the Kaiser Commission on Medicaid and the Uninsured, published April 18, 2012.

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