Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical spending in the US: facts from the
Medical Expenditure Panel Survey Dataset
Svetlana Pashchenko
University of Surrey
Ponpoje Porapakkarm
GRIPS
March 27, 2015
Medical spending across the developed world conference
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Institutional facts
Source of health insurance in the US changes over the
life-cycle
After 65 years old: (universal) public insurance (Medicare)
Before 65 years old: mostly private insurance (except disabled,
poor, military)
Health insurance status is correlated with income
Type of insurance
Uninsured
Public insurance
Private insurance
<25
21.6
62.5
26.7
By household income ($000)
25-50 50-75 75-100 100-150
18.7
13.1
9.7
6.3
45.9
30.8
21.5
17.3
50.3
69.7
79.6
86.1
150>
5.3
14.1
89.8
Distribution of people by insurance and income in 2013. Source: CPS
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
MEPS Dataset
National representative survey of civilian non-institutionalized
population
Each person is interviewed 5 times over 2-year period
Annual sample size is around 15,000
Data on health care use is collected on event level and then
summed up
MEPS defines medical expenditure based on actual payments
not charges
Charges are significantly higher because of negotiated
discounts or bad debt (means: $5,329 vs $2,511, medians:
$647 vs $438).
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
MEPS Dataset
Pluses of MEPS:
Households response are cross-checked with medical providers
Important because households may be unaware of actual
payments negotiated by insurance companies
Includes data on health, health insurance coverage,
demographic and socio-economic characteristics
Detailed event-level data (visits to specialists, conditions
diagnosed)
Minuses of MEPS:
Nursing home residents and hospital stays over 45 days are
excluded
Age is top-coded at 85 years
Only 2-year panel
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Aggregate medical expenditure in MEPS
MEPS underestimates the aggregate spending:
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
MEPS
592.2
694.5
776.0
872.5
933.0
985.7
990.9
1089.9
1110.8
1220.7
1219.6
1303.1
1312.1
NHEA
1165.7
1265.8
1371.9
1482.1
1592.3
1700.9
1809.3
1921.0
2017.3
2117.9
2196.2
2281.8
2379.3
NHEA/MEPS
1.97
1.82
1.77
1.70
1.71
1.73
1.83
1.76
1.82
1.73
1.80
1.75
1.81
Aggregate medical expenses in the MEPS and National Health Expenditure Account (NHEA) (billions, current dollars) and their ratio
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Reasons for the discrepancy (based on Sing et al, 2006)
Certain expenditures are not captured in MEPS:
- Long-term care facilities expenditures
- Acute care expenditures of institutionalized
- Expenditures for active duty military personnel and foreign
visitors
- Certain patient care services (e.g. non-durable medical
products, housekeeping)
- Certain non-patient care revenues (e.g. gift shop revenue)
MEPS may miss some expenditures incurred before death or
before a person moves to a nursing home
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Income and insurance statistics in MEPS
MEPS closely tracks household income ...
Average
Median
MEPS
71,026
55,120
CPS
71,274
51,017
CPS/MEPS
1.00
0.93
Average and median household income in 2012 in MEPS and CPS
...and insurance statistics
Type of insurance
Uninsured
Public insurance
Employer-based insurance
MEPS
18.4
16.4
68.7
CPS
21.0
16.6
67.2
Distribution by insurance in 2012 in MEPS and CPS
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Our sample
We use 14 waves of MEPS: 1999-2012
Dropped individuals younger than 20 years old and those with
missing medical spending or income information
Have 174,775 individuals or 330,055 person-year observations
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical spending by age
15000
20000
Women
0
5000
10000
2005 dollars
15000
10000
0
5000
2005 dollars
20000
Men
20
40
60
80
Age
Without Adjustments for Cohort Effects
Adjusted for Cohort Effects (1959−1963 Cohort)
20
40
60
80
Age
Without Adjustments for Cohort Effects
Adjusted for Cohort Effects (1959−1963 Cohort)
Average total medical expenditure by age, with and without adjustments for
cohort effects.
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Fraction of people with no medical spending by age
.4
.3
Fraction
0
0
.1
.2
.3
.2
.1
Fraction
.4
.5
Women
.5
Men
20
40
60
80
Age
Without Adjustments for Cohort Effects
Adjusted for Cohort Effects (1959−1963 Cohort)
20
40
60
80
Age
Without Adjustments for Cohort Effects
Adjusted for Cohort Effects (1959−1963 Cohort)
Fraction of people with zero medical spending by age, with and without adjustments for cohort effects.
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Distribution of medical spending by type of payors and
type of expenditure
Payors
Out of Pocket
Private Insurance
Government
Medicaid
Medicare
Other government
Expenditures
Hospitals
Office-based visits
Prescription drugs
Other
All
Men
Women
35.1
43.4
18.4
5.5
10.0
2.9
35.6
43.8
17.1
3.5
9.3
4.3
34.6
43.1
19.4
7.1
10.5
1.7
16.4
33.4
28.1
17.4
15.3
32.6
27.1
19.9
17.3
34.1
28.8
15.4
Notes: This table calculates the means of the ratios. Other type of
medical expenditures is the sum of dental care, home health care and
medical supplies and equipment categories.
Svetlana Pashchenko and Ponpoje Porapakkarm
lc
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical spending by insurance status
0
2000
$2005
4000 6000
8000 10000
Medical expenses by insurance status
20 to 24
30 to 34
40 to 44
age
Uninsured
Privately insured
50 to 54
60 to 64
Publicly insured
Total medical spending by insurance status
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical expenses by income
All
Mean Income, by Income
Everyone
32,482
Bottom
1,964
Fourth
10,877
Third
20,162
Second
33,791
Top
73,410
Men
Quintile
37,599
4,033
14,184
24,579
39,187
83,268
Women
27,745
846
8,559
16,559
28,967
63,541
Mean Medical Expenditure, by Expenditure Quintile
Everyone
3,895
3,426
3,895
Bottom
0
0
0
Fourth
189
69
189
Third
821
468
821
Second
2,495
1,732
2,495
Top
14,339
13,148
14,339
Mean Medical Expenditure, by Income Quintile
Everyone
3,895
3,426
3,895
Bottom
4,040
4,236
3,959
Fourth
5,166
4,190
5,519
Third
3,761
3,209
4,402
Second
3,420
2,938
3,929
Top
3,460
2,985
4,069
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical expenses by income
All
Mean Income, by Income
Everyone
32,482
Bottom
1,964
Fourth
10,877
Third
20,162
Second
33,791
Top
73,410
Men
Quintile
37,599
4,033
14,184
24,579
39,187
83,268
Women
27,745
846
8,559
16,559
28,967
63,541
Mean Medical Expenditure, by Expenditure Quintile
Everyone
3,895
3,426
3,895
Bottom
0
0
0
Fourth
189
69
189
Third
821
468
821
Second
2,495
1,732
2,495
Top
14,339
13,148
14,339
Mean Medical Expenditure, by Income Quintile
Everyone
3,895
3,426
3,895
Bottom
4,040
4,236
3,959
Fourth
5,166
4,190
5,519
Third
3,761
3,209
4,402
Second
3,420
2,938
3,929
Top
3,460
2,985
4,069
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical expenses by income (individual level)
2500
$2005
1500
8000
1000
$2005
6000
4000
500
2000
20 to 24
Out−of−pocket medical expenses by income
2000
10000
Medical expenses by income
30 to 34
40 to 44
50 to 54
age
60 to 64
Less than 33th percentile
Higher than 66th percentile
70 to 74
80−84
20 to 24
33−66th percentile
30 to 34
40 to 44
50 to 54
age
Less than 33th percentile
Higher than 66th percentile
60 to 64
70 to 74
80−84
33−66th percentile
.7
.8
Fraction
.9
1
Fraction of people with positive medical expenses by income
20 to 24
30 to 34
40 to 44
50 to 54
age
Less than 33th percentile
Higher than 66th percentile
Svetlana Pashchenko and Ponpoje Porapakkarm
60 to 64
70 to 74
80−84
33−66th percentile
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical expenses by income (family level)
3000
Out−of−pocket medical expenses by income
0
500
1000
5000
$2005
$2005
1500 2000
10000
2500
15000
Medical expenses by income
20 to 24
30 to 34
40 to 44
50 to 54
age
60 to 64
Less than 33th percentile
Higher than 66th percentile
70 to 74
80−84
20 to 24
33−66th percentile
30 to 34
40 to 44
50 to 54
age
Less than 33th percentile
Higher than 66th percentile
60 to 64
70 to 74
80−84
33−66th percentile
.8
.85
Fraction
.9
.95
1
Fraction of people with positive medical expenses by income
20 to 24
30 to 34
40 to 44
50 to 54
age
Less than 33th percentile
Higher than 66th percentile
Svetlana Pashchenko and Ponpoje Porapakkarm
60 to 64
70 to 74
80−84
33−66th percentile
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Medical expenses by income by category (family level)
1500
$2005
500
$2005
3000
2000
0
1000
20 to 24
30 to 34
40 to 44
50 to 54
age
60 to 64
Less than 33th percentile
Higher than 66th percentile
70 to 74
80−84
20 to 24
33−66th percentile
30 to 34
50 to 54
age
60 to 64
70 to 74
80−84
33−66th percentile
Prescription medicine
500
1000
$2005
2000
3000
$2005
1000 1500 2000 2500 3000
4000
40 to 44
Less than 33th percentile
Higher than 66th percentile
Office−based visits
0
20 to 24
Outpatient care
1000
4000
5000
Inpatient care
30 to 34
40 to 44
50 to 54
age
Less than 33th percentile
Higher than 66th percentile
60 to 64
70 to 74
80−84
33−66th percentile
Svetlana Pashchenko and Ponpoje Porapakkarm
20 to 24
30 to 34
40 to 44
50 to 54
age
Less than 33th percentile
Higher than 66th percentile
60 to 64
70 to 74
80−84
33−66th percentile
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Regression-based estimates of income elasticity
Consider regression log(medical spending) on log(income)
Both medical spending and income are bottom coded at 10%
of the mean
Controls: age, health, age interacted with health, gender,
health insurance status, year
Resulting coefficients on income:
Individual level: 0.017
Family level: 0.253
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Correlation of medical spending over time
Correlation of medical spending in year t with spending in year
t+1
A: Spending in Levels
t t+1
All 1.00 0.36
Men 1.00 0.34
Women 1.00 0.38
B: Spending in
t
All 1.00
Men 1.00
Women 1.00
Logs
t+1
0.60
0.63
0.56
Concentration of medical expenditures
Total medical spending averaged over:
1 year
2 years
Gini coefficient on medical spending
0.76
0.71
Percentage spent by top 1% of spenders
20.0%
16.3%
Percentage spent by top 10% of spenders 61.6%
55.5%
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
.6
.4
0
.2
Probability
.8
1
CDF of Total Medical expenditure
10
30
100
500
1500
10000
50000
200000
Average Medical Spending (2005 dollars)
1 year
Svetlana Pashchenko and Ponpoje Porapakkarm
2 year
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Effects of health
OOP Medical expenses by health
2000
500
4000
$2005
1000
1500
$2005
6000 8000 10000 12000
2000
Medical expenses by health
20 to 24
30 to 34
40 to 44
50 to 54
age
60 to 64
Bad health
70 to 74
80−84
20 to 24
30 to 34
Good health
40 to 44
50 to 54
age
Bad health
60 to 64
70 to 74
80−84
Good health
.7
.8
Fraction
.9
1
Fraction with positive medical expenses by health
20 to 24
30 to 34
40 to 44
50 to 54
age
Bad health
Svetlana Pashchenko and Ponpoje Porapakkarm
60 to 64
70 to 74
80−84
Good health
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Conclusion
MEPS provides detailed event-level data on medical expenses
cross-checked with providers
Closely tracks CPS measures of the average income and
insurance statistics but significantly underestimates the
aggregate medical spending in NHEA
Important facts from MEPS:
Medical spending significantly varies by health, age, and
insurance status
The effect of income differs at the individual and family level
Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Distribution of medical spending by type of payers and
type of expenditure
Payors
Out of Pocket
Private Insurance
Government
Medicaid
Medicare
Other government
Expenditures
Hospitals
Office-based visits
Prescription drugs
Other
All
Men
Women
17.5
42.8
36.2
8.1
24.2
3.9
16.1
42.1
37.8
6.1
25.2
6.4
18.6
43.3
35.1
9.7
23.4
2.0
43.4
22.9
21.6
10.9
45.7
21.4
21.3
10.5
41.7
24.1
21.8
11.3
Notes: This table calculates the ratio of the means. Other type of
medical expenditures is the sum of dental care, home health care and
medical supplies and equipment categories.
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Svetlana Pashchenko and Ponpoje Porapakkarm
Medical spending in the US: facts from the Medical Expenditur
Introduction
MEPS
MEPS vs aggregate statistics
Key facts
Share of medical spending by payors by age
Share of medical expenses paid by public insurance in total by age
20 to 24
0
.3
.1
.35
.2
Share
Share
.3
.4
.4
.5
.45
Share of out−of−pocket medical expenses in total by age
30 to 34
40 to 44
50 to 54
age
60 to 64
70 to 74
80−84
20 to 24
30 to 34
40 to 44
50 to 54
age
60 to 64
70 to 74
80−84
.1
.2
Share
.3
.4
.5
Share of medical expenses paid by private insurance in total by age
20 to 24
30 to 34
40 to 44
Svetlana Pashchenko and Ponpoje Porapakkarm
50 to 54
age
60 to 64
70 to 74
80−84
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Medical spending in the US: facts from the Medical Expenditur