Medicare Consumption Study

In 2010 the National Minority Quality Forum published Low Consumption and Higher Medicare Cost: Consumption Clusters in a Medicare Fee-for-Service Population (http://www.nmqf.org/IB02MedicareConsumptnWebFinal2.pdf), which introduced a consumption model to assess utilization of Medicare benefits. For each year analyzed, each beneficiary was assigned to one of five consumption clusters (crisis, heavy, moderate, light, and low consumers), based on total Medicare reimbursements for that individual’s care during the year.

Beneficiaries consumed their benefits in predictable patterns. A third of beneficiaries, including those with chronic diseases, consumed little of Medicare’s budget comparatively speaking. High consumption was confined to a small cluster of beneficiaries, whose composition changed from one year to the next as beneficiaries migrated among consumption clusters.

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