A Satellite Account of U.S. Health Care
Spending: Plans and progress
Brian C. Moyer
Associate Director for Industry Accounts
12th OECD-NBS Workshop on National Accounts
Paris, France
October 27-31, 2008
Health care spending as a percent of GDP
17%
16%
15%
14%
13%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Source: U.S. Bureau of Economic Analysis
www.bea.gov
2
Health care spending in BEA’s accounts
 National income and product accounts
 Consumer spending on health care
 Investment in health care equipment
 Contribution of health care to real GDP growth
 Industry accounts
 Input-output accounts—detailed transactions
for the health care industries
 GDP-by-industry accounts—real value added
for the health care industries
www.bea.gov
3
Conceptual model of a national health account
Inputs
Outputs
 Medical Care
 Health status
Market labor/capital
Longevity
Volunteer labor
Quality of life
 Time invested in own health  Financial externalities
 Other consumption items
 Research and development
 Quality of the environment
Source: Beyond the Market: Designing Nonmarket Accounts for the United States (National Research Council, 2005)
www.bea.gov
4
BEA’s Health Care Spending Satellite Account
Focuses on three primary areas:
 Reconcile National Health Expenditure Accounts
and National Income and Product Account
measures
 Develop disease-based statistics for health care
spending
 Develop disease-based price indexes for health
care spending
www.bea.gov
5
Treatment substitution: An example
Assumptions:
•No price change for either
type of treatment
Cost of Cataract Surgery
price
•No change in number of
patients
Problem: As patients use
outpatient services,
In patient
•Nominal expenditures fall
•Treatment prices show no
change
•“Real” spending falls, even
though quantities did not
Out patient
time
Previous studies suggest this issue is numerically important.
www.bea.gov
6
Disease-based price indexes: Early research
Comparison of disease- and provider-based indexes
1.3
Features of index:
•Constructed using large
claims database for HMO
patients
1.2
Provider-based
•Price = revenue from all
sources
1.1
Disease-based
1.0
•Price is defined as price
per patient treated for a
homogeneous condition
•Dollars are allocated to
conditions using “episode
groupers”
0.9
2003q1
2004q1
Source: Aizcorbe and Nestoriak (2008)
www.bea.gov
2005q1
•“Providers” are
identified using “place of
service” variable
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Accounting framework: Initial thoughts
 Consumer spending organized by type of
disease
 Primary caregiving industry provides
health care services using inputs from
other health care industries, such as
hospitals, laboratories, and pharmacies
 Productivity gains allocated across
industries
www.bea.gov
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Routing of industry transactions
Employer
Employee
Primary
Caregiver
Industry that provides health care 
Other industries
provide Intermediate
inputs
www.bea.gov
Hospital
Health Insurance
Clinic
Laboratory
Pharmacy
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