Prospects for Medical AdvancesAffecting the Elderly

Dana P. Goldman

Acknowledgements

RAND

Michael Hurd

Geoffrey Joyce

Emmett Keeler

Darius Lakdawalla

Stanford

Jay Bhattacharya

Alan Garber

Constantijn Panis

Baoping Shang

Paul Shekelle

Harvard

David Cutler

Funding was provided by NIA through the RAND RoybalCenter for Health Policy Simulation and the RAND AgingCenter. Original model developed with funding by CMS.

Health Care Spending is Rising as a Share ofEconomic Output

0

2

4

6

8

10

12

14

16

1960 1965 1970 1975 1980 1985 1990 1995 2000

5.1

14.9

Health carespending asa percentage

of GDP

Source: Centers for Medicare & Medicaid Services, 2004.

On Average, Spending Is Worth It

Source: Centers for Disease Control and Prevention, National Center for Health Statistics, National VitalStatistics System: Arias E, Anderson RN, Kung HC, Murphy SL, Kochanek KD. Deaths: Final data for 2001.National vital statistics reports. vol 52 no 3. Hyattsville, Maryland: National Center for Health Statistics.2003.Table 22, 29: ftp://ftp.cdc.gov/pub/Health_Statistics/NCHS/Publications/Health_US/hus03/

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

1950 1960 1970 1980 1990 2000

Infa

nt

Death

sPer

1000

Live

Bir

ths

Note: Infants are under 1 year; Cardiovascular disease includes diseases of the heart and cerebrovascular diseases.

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1950 1960 1970 1980 1990 2000Ag

eA

dju

ste

dC

ard

iov

asc

ula

rD

ise

ase

De

ath

sP

er

10

00

Infant mortality Cardiovascular disease

5

But Will Emerging Technologies BeWorth the Cost?

The Left Ventricular Assist Device

Source: Rose et al, New Engl. J. of Med., 345(20);2001, Figure 1.

Research Objectives

• Identify the key biomedical innovations andhealth trends likely to affect the elderly overthe next 30 years

• Model the effects on:

– Spending

– Disease

– Functional status

7

Convened Panels of Experts fromAround the Country

• Identified key breakthroughs in 3 clinicalareas:

– Cardiovascular disease

– Neurological disorders

– Cancer / biology of aging*

• Fourth panel of geriatricians and socialscientists

*Combined since cancer is now closely linked with the aging process at thecellular level.

8

Example:Intraventricular Defibrillators

Target: 50% of patients with heart failure50% of patients post AMI20% of patients with cardiomyopathy

Likelihood: 30% in 10 yrs30-40% in 20 yrs

Impact: Life expectancy of people with heart failureincreases 6-10 months

No impact on hospitalizations

Cost: $35,000 - $40,000 per case

~3.5 millionin 2004

Etc.

New 65year-oldsin 2007

Deceased

Survivors

Deceased

Survivors

2007 costs

Health &functional

status 2007

Health &functional

status, 2006

Our Model Tracks Individuals Over Time

Survivors

New 65year-oldsin 2006

100,000Medicare

beneficiaries(age 65+)in 2005

2006 costs2005 costs

Deceased

10

Example 1:Compound to Extend Lifespan

• Overwhelming biomedical evidence thatreducing caloric intake of animals by 30%increases life expectancy by 25%– Chemical compounds can mimic this behavior

in rodents

• Such a pill could emerge for humans– Taken by everyone at a cost similar to

nutritional supplements ($1/day)

– Hazard of death decreases by 63%(equivalent to extending life by 15 years)

11

Aged Population Would Grow by13 Million by 2030

Total Number of Elderly (65+)

71

30

40

50

60

70

80

90

2000 2005 2010 2015 2020 2025 2030

Year

Population(millions)

Status Quo

84

Compound

12

Much More Heart Disease

44

30

35

40

45

50

55

2000 2005 2010 2015 2020 2025 2030

Year

% with heartdisease Status Quo

52Compound

13

Health Care SpendingWould Be 70% Higher in 2030

Elderly Health Care Spending

621

300

400

500

600

700

800

900

1000

2000 2005 2010 2015 2020 2025 2030

Year

Billionsof 1998dollars

Status Quo

934

Compound

Society Faces Substantial Technological RiskIn Elderly Medical Spending

Source: Goldman et al, Health Affairs, forthcoming

29,78570.4Anti-aging compound (unhealthy)

8,79013.8Anti-aging compound (healthy)

Technology

Cost peradditionallife-year

Increase inmedical spending*

(%)

*Increase in 2030 health care spending relative to status quo without the technology.

15

Example 2:Intraventricular Cardioverter Defibrillators

• Currently used to treat patients with life-threatening arrhythmias– Shocks heart to restore natural rhythm– 26,000 procedures in 1988– $35,000 per procedure

• Scenario would expand their use– Implant in 50% of patients with heart failure or

myocardial infarction– Reduces risk of death by 10%

• Panel told us 35% chance of such an expansion

16

Will Reach 350,000 Procedures Annuallyby 2030

348,729

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2000 2005 2010 2015 2020 2025 2030

Year

Num

ber

ofP

roce

dure

s

17

Will Add About $20 -$25 Billion Annually toHealth Spending in Steady-State

Elderly Health Care Spending

635621

300

375

450

525

600

675

2000 2005 2010 2015 2020 2025 2030

Year

Bill

ion

so

fDo

llars

(199

8)

ICDStatus Quo

18

Little Change in Functional Statusfor the Elderly Population

Elderly With Any Functional Impairment

24

25

26

27

28

29

30

2000 2005 2010 2015 2020 2025 2030

Year

Pre

vala

nce

(%)

ICDStatus Quo

Society Faces Substantial Technological RiskIn Elderly Medical Spending

Source: Goldman et al, Health Affairs, forthcoming

29,78570.4Anti-aging compound (unhealthy)

103,0953.7Implantable cardio-defibrillators

8,79013.8Anti-aging compound (healthy)

Technology

Cost peradditionallife-year

Increase inmedical spending*

(%)

*Increase in 2030 health care spending relative to status quo without the technology.

Society Faces Substantial Technological RiskIn Elderly Medical Spending

Source: Goldman et al, Health Affairs, forthcoming

29,78570.4Anti-aging compound (unhealthy)

1,403,7402.3Pacemaker for atrial fibrillation

511,9622.3Left ventricular assist devices

498,8098.0Antiangiogenesis (cancer)

103,0953.7Implantable cardio-defibrillators

61,8840.5Telomerase inhibitors (cancer)

21,9050.4Treatment of acute stroke

18,2360.4Cancer vaccines

8,79013.8Anti-aging compound (healthy)

Technology

Cost peradditionallife-year

Increase inmedical spending*

(%)

*Increase in 2030 health care spending relative to status quo without the technology.

21

Key Findings• Substantial technological risk in Medicare

– Not just demographic risk caused by theaging of baby boomers

• Living longer is valuable, but not because itsaves money– Curing any one disease will not fix the

problem– Obesity may be an important exception

• Challenge is to figure out how we gettreatment to the patients who most need it