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STATISTICAL BRIEF #450:
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September 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven B. Cohen, PhD
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Highlights
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IntroductionEstimates of health care expenses for the U.S. civilian noninstitutionalized (community) population are critical to policymakers and others concerned with access to medical care and the cost and sources of payment for that care. In 2012, health care expenses among the U.S. community population totaled $1.35 trillion. Medical care expenses, however, are highly concentrated among a relatively small proportion of individuals in the community population. As previously reported in 1996, the top 1 percent of the U.S. population accounted for 28 percent of the total health care expenditures and the top 5 percent for more than half. More recent data have revealed that over time there has been some decrease in the extent of this concentration at the upper end of the expenditure distribution. In 2012, nearly 14 percent of health care expenditures in the community population for medical care were paid out of pocket ($191 billion). Similarly, the distribution of health care expenditures paid out of pocket is also concentrated among a relatively small proportion of individuals.Using information from the Household Component of the Medical Expenditure Panel Survey (MEPS-HC) for 2012, this Brief provides detailed estimates of the concentration in the level of out-of-pocket health care expenditures for the nation, and further distinguished by specific population subgroups. Studies that examine the concentration of health care expenditures, their magnitude, and their respective differentials among specific population subgroups are essential to help discern the factors most likely to drive health care spending and the characteristics of the individuals who incur them. The MEPS-HC data are particularly well suited for measuring the population's distribution of health care expenditures. All differences between estimates discussed in the text are statistically significant at the 0.05 level unless otherwise noted. |
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FindingsIn 2012, the top 1 percent ranked by their health care expenses paid out of pocket accounted for 20.5 percent of total health care expenditures paid out of pocket with an annual mean out-of-pocket expenditure of $12,500 (figure 1). The top 5 percent of the population accounted for 45.1 percent of total out-of-pocket expenditures with an annual mean out-of-pocket expenditure of $5,501. In addition, the top 10 percent of the population accounted for 61.3 percent of total out-of-pocket expenditures with an annual mean out-of-pocket expenditure of $3,741. Overall, the top 50 percent of the population ranked by their out-of-pocket expenditures accounted for 97.8 percent of overall out-of-pocket health care expenditures while the lower 50 percent accounted for only 2.2 percent of the total. Those individuals ranked in the top half of the out-of-pocket health care expenditure distribution had an annual mean out-of-pocket expenditure of $1,192.In 2012, 67.2 percent of the population (22.5 million individuals) had out-of-pocket expenditures for medical care that were equal to or greater than $2,000. Nearly 4.8 million individuals (1.5 percent) paid $5,000 or more out of pocket for their medical care. When considering higher spending thresholds, approximately 1.3 million individuals (0.4 percent) incurred out-of-pocket expenditures of at least $10,000. In addition, the elderly were 2.3 times as likely as their younger counterparts to have experienced out-of-pocket expenditures at or above $2,000 (14.0 percent relative to 6.1 percent, figure 2). |
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Of the $483.7 billion spent on ambulatory care in 2012, $59.4 billion or 12.3 percent was spent out of pocket (figure 3). Relative to the $409.1 billion spent on hospital inpatient care, only 3.9 percent ($16.0 billion) was paid out of pocket. Spending on prescription medications totaled
$293.0 billion, with $56.1 billion or 19.2 percent paid out of pocket. Alternatively, 48.5 percent (41.1 billion) of the $84.8 billion in medical expenditures for dental care was paid out of pocket. Relative to the total out-of-pocket medical expenditures incurred in 2012 ($191 billion), nearly one-third of these expenses were attributable to ambulatory care ($59.4 billion), similar to the proportion associated with out-of-pocket costs for prescribed medicines ($56.1 billion, figure 4). Another one-fifth of out-of-pocket expenditures were for dental care ($41.1 billion), with the remainder attributable to hospital inpatient care ($16.0 billion) and other medical services ($18.5 billion of which $4.9 billion was for home health). Age In 2012, the top 5 percent of children under the age of 18 ranked by their out-of-pocket health care expenses accounted for 60.5 percent of the out-of-pocket health care expenditures incurred by this subpopulation with an annual mean out-of-pocket expenditure of $3,287 (figure 5). Among persons 18–44 years old, the top 5 percent accounted for 47.8 percent of the out-of-pocket health care expenditures incurred by this population subgroup with an annual out-of-pocket mean of $3,977. The top 5 percent of individuals 45–64 were associated with 38.2 percent of the out-of-pocket health care expenditures incurred by this age group with an annual out-of-pocket mean of $6,519. The top 5 percent of the elderly aged 65 years and older accounted for 38.8 percent of the out-of-pocket medical expenditures experienced by this domain, with an annual mean of $9,274. In summary, the youngest age cohort (under 18 years old) was characterized by the most concentrated levels of out-of-pocket health care spending. In contrast, the elderly had the highest mean levels of out-of-pocket health care expenditures relative to younger population subgroups at the highest quantiles of the out-of-pocket health care expenditure distribution. Race/ethnicity The top 5 percent of non-Hispanic whites and other races accounted for 41.2 percent of the out-of-pocket health care expenditures incurred by this subpopulation with an annual mean out-of-pocket expenditure of $6,245 in 2012 (figure 6). Among non-Hispanic black individuals, the top 5 percent accounted for 56.1 percent of the out-of-pocket health care expenditures for this subgroup, with an annual mean of $4,039. For non-Hispanic Asians, the top 5 percent were associated with 46.9 percent of the out-of-pocket health care expenditures incurred for this subpopulation, exhibiting a mean of $3,792. The top 5 percent of Hispanics accounted for 57.0 percent of out-of-pocket health care expenditures by this subpopulation with an annual mean of $3,179. Non-Hispanic whites and other races had the highest mean levels of out-of-pocket health care expenditures at the top quantiles when controlling for race/ethnicity. Sex In 2012, the top 5 percent of males accounted for 47.0 percent of out-of-pocket health care expenditures incurred by this subpopulation with an annual mean of $4,901 (figure 7). Among females, the top 5 percent were associated with 43.5 percent of out-of-pocket health care expenditures for this subgroup, with mean out-of-pocket expenditures of $6,061. Females had higher mean levels of out-of-pocket health care expenditures at the top quantiles compared to males. Insurance status The top 5 percent of the uninsured population under age 65 ranked by their health care expenses accounted for 55.5 percent of the out-of-pocket health care expenditures incurred by this subpopulation with annual mean out-of-pocket expenditures of $5,087 in 2012 (figure 8). Among non-elderly persons with public coverage only, the top 5 percent accounted for 68.1 percent of out-of-pocket health care expenditures for this subgroup, with mean expenditures of $2,682. For those non-elderly with any private coverage, the top 5 percent were associated with 41.4 percent of this group's out-of-pocket health care expenses, exhibiting a mean of $5,068. Individuals with public insurance had the most concentrated levels of out-of-pocket health care expenditures and the lowest annual mean out-of-pocket expenses. Income In 2012, the top 5 percent of the poor accounted for 61.2 percent of out-of-pocket health care expenditures incurred by this subgroup with an annual mean of $3,979 (figure 9). For near poor individuals, the top 5 percent were associated with 52.3 percent of out-of-pocket health care expenses for this subpopulation, exhibiting a mean of $4,359. Among low income persons, the top 5 percent accounted for 48.3 percent of this group's out-of-pocket health care expenditures, with an annual mean of $4,590. The top 5 percent of the middle income subgroup accounted for 45.6 percent of out-of-pocket health care expenditures and an annual mean of $5,467. For those persons in the high income subgroup, the top 5 percent were associated with 38.9 percent of out-of-pocket health care expenditures, exhibiting a mean of $6,383. The poor had a significantly more concentrated level of out-of-pocket health care expenditures than their high income counterparts. |
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Data SourceThe estimates shown in this Statistical Brief are drawn from analyses conducted by the MEPS staff from the following public use file: MEPS HC-155, 2012 Full Year Consolidated Data File. |
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DefinitionsExpendituresMEPS-HC defines total expense as the sum of payments from all sources to hospitals, physicians, other health care providers (including dental care), and pharmacies for services reported by respondents in the MEPS-HC. Sources include direct payments from individuals and families, private insurance, Medicare, Medicaid, and miscellaneous other sources. Type of service
Age was defined as age at the end of the year 2012. Race/ethnicity Classification by race and ethnicity was based on information reported for each family member. Respondents were asked if each family member's race was best described as American Indian, Alaska Native, Asian or Pacific Islander, black, white, or other. They also were asked if each family member's main national origin or ancestry was Puerto Rican; Cuban; Mexican, Mexicano, Mexican American, or Chicano; other Latin American; or other Spanish. All persons whose main national origin or ancestry was reported in one of these Hispanic groups, regardless of racial background, were classified as Hispanic. Since the Hispanic grouping can include black Hispanic, white Hispanic, Asian and Pacific Islanders Hispanic, and other Hispanic, the race categories of black, white, Asian and Pacific Islanders, and other only include non-Hispanics for the race/ethnicity classifications. MEPS respondents who reported other single or multiple races and were non-Hispanic were included in the other category. For this analysis, the following classification by race and ethnicity was used: Hispanic (of any race), non-Hispanic black single race, non-Hispanic white single race, and others, and non-Hispanic Asian and Pacific Islanders single race. Health insurance status Individuals under age 65 were classified into the following three insurance categories based on household responses to the health insurance status questions:
Sample persons were classified according to the total yearly income of their family. Within a household, all people related by blood, marriage, or adoption were considered to be a family. Poverty status categories are defined by the ratio of family income to the Federal income thresholds, which control for family size and age of the head of family. Poverty status was based on annual income in 2012. Poverty status categories are defined as follows:
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About MEPS-HCMEPS-HC is a nationally representative longitudinal survey that collects detailed information on health care utilization and expenditures, health insurance, and health status, as well as a wide variety of social, demographic, and economic characteristics for the U.S. civilian noninstitutionalized population. It is cosponsored by the Agency for Healthcare Research and Quality and the National Center for Health Statistics.For more information about MEPS, call the MEPS information coordinator at AHRQ (301-427-1406) or visit the MEPS Web site at http://www.meps.ahrq.gov/. |
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ReferencesCohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS Methodology Report No. 1. AHCPR Pub. No. 97-0026. Rockville, MD: Agency for Healthcare Policy and Research, 1997. http://meps.ahrq.gov/mepsweb/data_files/publications/mr1/mr1.shtmlCohen, S. Design Strategies and Innovations in the Medical Expenditure Panel Survey. Medical Care, July 2003: 41(7) Supplement: III-5–III-12. Cohen, S. and Uberoi, N. Differentials in the Concentration in the Level of Out-of-Pocket Health Expenditures across Population Subgroups in the U.S., 2011. Statistical Brief #423. September 2013. Agency for Healthcare Research and Quality, Rockville, MD. http://meps.ahrq.gov/mepsweb/data_files/publications/st423/stat423.shtml Cohen, S. and Yu, W. The Concentration and Persistence in the Level of Health Expenditures over Time: Estimates for the U.S. Population, 2008–2009. Statistical Brief #354. December 2010. Agency for Healthcare Research and Quality, Rockville, MD. http://www.meps.ahrq.gov/mepsweb/data_files/publications/st354/stat354.shtml Cohen, S. and Yu, W. The Concentration and Persistence in the Level of Health Expenditures over Time: Estimates for the U.S. Population, 2006–2007. Statistical Brief #278. March 2010. Agency for Healthcare Research and Quality, Rockville, MD. http://www.meps.ahrq.gov/mepsweb/data_files/publications/st278/stat278.shtml Ezzati-Rice, T.M., Rohde, F., Greenblatt, J. Sample Design of the Medical Expenditure Panel Survey Household Component, 1998–2007. Methodology Report No. 22. March 2008. Agency for Healthcare Research and Quality, Rockville, MD. http://www.meps.ahrq.gov/mepsweb/data_files/publications/mr22/mr22.shtml |
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Suggested CitationCohen, S. Differentials in the Concentration in Out-of-Pocket Health Expenditures across Population Subgroups in the U.S., 2012. Statistical Brief #450. September 2014. Agency for Healthcare Research and Quality, Rockville, MD. http://meps.ahrq.gov/mepsweb/data_files/publications/st450/stat450.shtmlAHRQ welcomes questions and comments from readers of this publication who are interested in obtaining more information about access, cost, use, financing, and quality of health care in the United States. We also invite you to tell us how you are using this Statistical Brief and other MEPS data and tools and to share suggestions on how MEPS products might be enhanced to further meet your needs. Please email us at MEPSProjectDirector@ahrq.hhs.gov or send a letter to the address below: Steven B. Cohen, PhD, Director Center for Financing, Access, and Cost Trends Agency for Healthcare Research and Quality 540 Gaither Road Rockville, MD 20850 |
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