Just five conditions make up 50% of health care spending, according to a new report from the Health Action Council (HAC) and UnitedHealthcare (UHC).

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The top 5 conditions driving health care costs

For the report, researchers analyzed national data from more than 320,000 covered lives under HAC's membership of midsize to large employers across the country. The report used UnitedHealth Group internal data based on a comparison of medical and pharmacy plan data of HAC plan sponsors from July 2018 through June 2021.

Overall, researchers found that five conditions made up half of all health care spending through claims paid for by employer health plans.

1. Cancer

There are more than 200 types of cancer, and diagnosis and treatment can cost between $100,000 and $200,000 depending on the clinical circumstances and number of services needed. Overall, employers paid $553 million towards approximately 103,000 cancer claims, making it the costliest of the five health conditions.

The primary cost driver was chemotherapy, which made up 18% of all cancer costs, with an average cost of $74,000 per patient.

"Continued innovation in cancer drug therapies along with the mark-up on these drugs by large academic cancer centers are major cost drivers behind cancer care costs," said Jennifer Malin, SVP and CMO of Optum Health Solutions.

2. Musculoskeletal (MSK)

Musculoskeletal conditions cover a variety of diagnoses, including joint wear and tear, knee injuries, hip pain, and more. Employers paid $477 million towards approximately 317,000 MSK claims.

The primary cost driver for MSK conditions was knee osteoarthritis, which made up 8% of total MSK costs. The growing prevalence of obesity has been associated with a greater incidence and progression of osteoarthritis to weight-bearing joints. According to the report, patients with a BMI greater than 30 are 9 to 33 times more likely to need to have a joint replaced.

In addition, technological advancements in knee replacement implants have also led to younger patients undergoing knee arthroplasty. As the population continues to age, people with a prior knee arthroplasty will likely need a second operation.

3. Cardiovascular

Typical cardiovascular diagnoses include heart rhythm issues, stroke, heart attack, and heart failure. Some risk factors for cardiovascular disease are hypertension, smoking, obesity, high cholesterol, and more. Employers paid $357 million towards approximately 169,000 claims.

The primary cost driver for these conditions was treatment for abnormal heart rhythms, which made up 10% of the total cost of cardiovascular claims.

According to Michael Menen, senior medical director at Optum Population Health Solutions, the growing prevalence of atrial fibrillation is largely due to aging and population growth. He added that new developments in heart medications and procedures "has led to a notable increase in the cost of managing arrhythmias."

4. Gastrointestinal (GI)

Gastrointestinal conditions include colitis, Chron's disease, irritable bowel syndrome (IBS), celiac disease, and more. Overall, employers paid $284 million towards approximately 136,000 GI claims.

According to the report, GI issues can have a significant impact on workplace productivity and engagement. Research has shown that 87% of employees with IBS report missing work due to their symptoms. In addition, employees with celiac disease may be unintentionally excluded during workplace social functions, such as potlucks or special snacks.

The primary cost driver for GI conditions is immunosuppressive drugs, which make up 12% of total GI costs. However, lower cost biosimilars for several of these drugs are now available and may help reduce costs in the future.

5. Neurological

Some common neurological diagnoses include carpal tunnel's syndrome, Parkinson's disease, migraines and headaches, multiple sclerosis (MS), and epilepsy. Employers paid $225 million towards approximately 240,000 neurological claims.

The primary cost driver for neurological claims was MS medications, making up 13% of all costs for these claims. According to the pharmaceutical industry, the extensive research and development process needed to develop MS treatments contribute to high drug costs.

How to control health care costs

To help employers mitigate health care costs, the report recommended several actions, including carefully considering the aging population and improving wellness programs to address new conditions.

"As employers, we have a population that is aging," said Patty Starr, president and CEO of HAC. "There's new awareness points from when diseases onset. There may be more cognitive or psychological changes, or social or environmental changes that are occurring on a regular basis than what we had seen in the workplace up to this point."

In addition, Craig Kurtweil, VP of the Center for Advanced Analytics at UHC, said that while many employers have included cancer, MSK, and cardiovascular concerns in their wellness programs, they often overlook GI and neurological health.

"A lot of employers have spent a lot of time strategizing around the right cancer program, or a way to prevent heart disease, the right way to think about alternative forms of treatment for back pain, things like that — it's just been around so long that everyone's kind of thought about it and strategized around it," Kurtzweil said, adding that these initiatives are still important. "But I can tell you very rarely has an employer thought about a gastrointestinal health program to really focus on."

Overall, "[n]avigating through healthcare options and decisions can be daunting," Starr said. "Employers who empower employees with more information about their care options, while also providing advocacy and encouragement to engage, can help employees and dependents make more informed and effective decisions and save time and money." (Coutré, Crain's Cleveland Business/Modern Healthcare, 4/3; Health Action Council/UnitedHealthcare "Costly conditions: Identifying and addressing top clinical cost drivers" report, 3/10; Health Action Council news release, 3/10)

(The Daily Briefing is published by Advisory Board Research, a division of Optum, which is a wholly owned subsidiary of UnitedHealth Group. UnitedHealth Group separately owns UnitedHealthcare)