BACKGROUND: Low neighborhood socioeconomic status is associated with adverse health outcomes, but its association with health care costs in older adults is uncertain. OBJECTIVES: To estimate the association of neighborhood Area Deprivation Index (ADI) with total, inpatient, outpatient, skilled nursing facility (SNF), and home health care (HHC) costs among older community-dwelling Medicare beneficiaries, and determine whether these associations are explained by multimorbidity, phenotypic frailty, or functional impairments. DESIGN: Four prospective cohort studies linked with each other and with Medicare claims. PARTICIPANTS: In total, 8165 community-dwelling fee-for-service beneficiaries (mean age 79.2 years, 52.9% female). MAIN MEASURES: ADI of participant residence census tract, Hierarchical Conditions Category multimorbidity score, self-reported functional impairments (difficulty performing four activities of daily living), and frailty phenotype. Total, inpatient, outpatient, post-acute SNF, and HHC costs (US 2020 dollars) for 36 months after the index examination. KEY RESULTS: Mean incremental annualized total health care costs adjusted for age, race/ethnicity, and sex increased with ADI ($3317 [95% CI 1274 to 5360] for the most deprived vs least deprived ADI quintile, and overall p-value for ADI variable 0.009). The incremental cost for the most deprived vs least deprived ADI quintile was increasingly attenuated after separate adjustment for multimorbidity ($2407 [95% CI 416 to 4398], overall ADI p-value 0.066), frailty phenotype ($1962 [95% CI 11 to 3913], overall ADI p-value 0.22), or functional impairments ($1246 [95% CI -706 to 3198], overall ADI p-value 0.29). CONCLUSIONS: Total health care costs are higher for older community-dwelling Medicare beneficiaries residing in the most socioeconomically deprived areas compared to the least deprived areas. This association was not significant after accounting for the higher prevalence of phenotypic frailty and functional impairments among residents of socioeconomically deprived neighborhoods.
