Hospital costs drive Medicaid spending for depression

As America’s population ages, the treatment of chronic conditions will be a major health cost driver. Depression is one of the most costly chronic conditions for state Medicaid programs. A study of claims data from over 41,000 Oklahoma Medicaid patients revealed that depression patients had mean yearly costs of $5,505, second only to psychoses as the mostly costly condition among the study population. Hospital services accounted for more than two-thirds of the costs of treating depression followed by “other health professionals” which includes psychologists and social workers.

According to data from the Agency for healthcare Research and Quality, nationally, Medicaid paid for approximately 28 percent of all hospitalizations for depression in 2000.

Effective disease management for patients with depression can be an effective tool for containing Medicaid spending growth. During the past decade the evolution of pharmaceutical innovation has resulted in a number of treatments for depression. Ensuring access to those medicines can improve health outcomes and may reduce other health costs associated with depression.