The most expensive diseases

By Matthew Herper

updated 5:46 p.m. ET April 15, 2005

Health costs have run amok in the U.S.

General Motors pays more on health care than steel. A Harvard study indicated that half of personal bankruptcies in the U.S. are health related. Even as the ranks of uninsured Americans are swelling, Americans' $1.7 trillion annual doctor bill continues to grow by at least 7 percent each year. What, exactly, are Americans paying for?

To find out, we decided to look at which diseases are costing the system the most money and which ailments had the most skyrocketing health costs.

This itemized version of the U.S.' health bill is based on data provided by the Agency for Health Care Research and Quality, a U.S. government outfit charged with figuring out where Americans' health care dollars are going. AHRQ conducts an annual survey of medical expenditures, including both government spending, such as Medicare, and private spending by insurance companies.

Joel Cohen, a researcher at the agency, helped us drill into the agency's database, providing a clearer picture of the makeup of broad categories such as "heart conditions." We also looked at what diseases and their related treatments, such as high cholesterol and anxiety, were causing the biggest cost runups.

Real reasons behind price hikes
The data tell a story that backs up some of the most important conclusions in health research. First, as much as groups like AARP like to complain about how the price of brand name drugs outpaces inflation, price increases aren't the main thing eating our money. Of the ten fastest-growing diseases identified from the AHRQ data and ranked by percentage increase in cost, only one — hemorrhoids — was caused by an apparent increase in the cost of care per patient. Instead, the overall tab rose because more and more people were diagnosed with a disease such as acid reflux, not because the treatment got pricier.

Second, preventative medicine gives people better lives and prevents illnesses, but it doesn't save money — because patients who would never have been treated before will still opt to pop pills or get screenings. "The number of people you're treating will far outweigh any savings," says Mark Fendrick, a noted health economist and doctor at the University of Michigan.

Take, for example, the use of drugs to lower blood pressure and cholesterol. There is no doubt that these medicines save lives — cholesterol pills such as Pfizer's Lipitor and Merck's Zocor have been shown to cut heart attacks by one-third. It's not surprising that more diagnoses of high cholesterol made it the second fastest-growing disease, with costs tripling to $13.6 billion. But while AHRQ data show the number of heart attacks dropping 3 percent, the cost of treating them rose 8 percent to $15 billion. Saving lives doesn't always save money — sometimes it costs.

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