the health status among subgroups of older adults. Many older adults are actually in very good health, for example—44 percent of adults in the 65-74 age range and 35 percent of adults 75 and older report their health status to be “very good” or “excellent” (Pleis and Lethbridge-Çejku, 2007). And a sizable minority, approximately 20 percent, have no chronic illnesses (AOA, 2006; CDC and Merck Company Foundation, 2007). These healthier older adults tend to be community-dwelling individuals who require only preventive and episodic health services.

On the other hand, a large majority of older adults (approximately 82 percent) have at least one chronic disease that requires ongoing care and management, with hypertension, arthritis, and heart disease being the most common (Table 2-2). These chronic conditions damage older adults’ quality of life, they contribute to a decline in functioning, and they have become the primary reason why older adults seek medical care (Hing et al., 2006). In fact, Medicare beneficiaries with more than one chronic condition visit an average of eight physicians in a year (Anderson, 2003). An analysis of Medicare expenditures shows that the 20 percent of Medicare beneficiaries with five or more chronic conditions account for two-thirds of Medicare spending (Partnership for Solutions National Program Office, 2004). Data from the 2001 Medical Expenditure Panel Survey show that almost all