Using Adjusted MEPS Data to Study Using Adjusted MEPS Data to Study

Incidence of Health Care FinanceIncidence of Health Care Finance Thomas M. SeldenThomas M. Selden

Division of Modeling & SimulationDivision of Modeling & SimulationCenter for Financing, Access and Cost TrendsCenter for Financing, Access and Cost Trends

Advantages of HH Survey DataAdvantages of HH Survey Data

Only HH survey data possess the Only HH survey data possess the correlations across variables necessary correlations across variables necessary for:for:– Behavioral researchBehavioral research– Subgroup or distributional estimatesSubgroup or distributional estimates– Policy simulationsPolicy simulations

Using MEPS to Study Finance Using MEPS to Study Finance IncidenceIncidence

Prevalence and distribution of high out-of-pocket Prevalence and distribution of high out-of-pocket burdensburdens– Overall population (Banthin and Bernard, Overall population (Banthin and Bernard, JAMAJAMA))– Within-year burdens (Selden, Within-year burdens (Selden, HSRHSR))– Policy impacts (Banthin and Selden, Policy impacts (Banthin and Selden, InquiryInquiry; Selden, ; Selden,

Kenney, et al., Kenney, et al., Health AffairsHealth Affairs))

Distribution of benefits from public spendingDistribution of benefits from public spending– Selden and Gray (Selden and Gray (Health AffairsHealth Affairs) ) – Selden and Sing (Selden and Sing (Health AffairsHealth Affairs))

Progressivity of the financing of health careProgressivity of the financing of health care– Selden (preliminary)Selden (preliminary)

Potential Issues with Using Potential Issues with Using UnadjustedUnadjusted MEPS MEPS

Out-of-scope populationsOut-of-scope populations– Institutionalized persons not in MEPSInstitutionalized persons not in MEPS

Out-of-scope expendituresOut-of-scope expenditures– Personal carePersonal care

Differential attrition (high-cost cases)Differential attrition (high-cost cases) Under-reporting of useUnder-reporting of use Lump-sum payments to providersLump-sum payments to providers

– MCR/MCD grants to hospitals for teaching/needyMCR/MCD grants to hospitals for teaching/needy Tax subsidies for coverage and careTax subsidies for coverage and care

Presentation OverviewPresentation Overview

Present step-by-step results from efforts at Present step-by-step results from efforts at AHRQ to adjust MEPS toAHRQ to adjust MEPS to– Include tax subsidiesInclude tax subsidies– Align with National Health Expenditure AccountsAlign with National Health Expenditure Accounts

Show some applications:Show some applications:– burdensburdens– benefit incidence analysis benefit incidence analysis – equity in financing of health care finance and useequity in financing of health care finance and use

MEPS DataMEPS Data

Over 30,000 persons in over 10,000 householdsOver 30,000 persons in over 10,000 households Every year since 1996Every year since 1996 Civilian noninstitutionalized populationCivilian noninstitutionalized population Households report use and expenditures during 5 in Households report use and expenditures during 5 in

person interviews over 2 yearsperson interviews over 2 years Supplemented by journal entries and follow back Supplemented by journal entries and follow back

survey of providerssurvey of providers Compared to CMS NHEA every 5 years when Compared to CMS NHEA every 5 years when

availability of Census data on providers facilitates availability of Census data on providers facilitates alignment (last done in 2002)alignment (last done in 2002)

Apples to Apples Comparison of Apples to Apples Comparison of MEPS & NHEA, 2002MEPS & NHEA, 2002

NHEANHEA $1.603T$1.603T SUBTRACTIONSSUBTRACTIONS

NHEA Pers Hlth CareNHEA Pers Hlth Care $1.341T$1.341T $262 admin, pub hlth, res, const$262 admin, pub hlth, res, const

Pop-adjusted PHCPop-adjusted PHC $1.072T$1.072T $269B out-of-scope population $269B out-of-scope population (long-term care, military)(long-term care, military)

MEPS-consistent NHEAMEPS-consistent NHEA $964B$964B $108 out-of-scope expenditures $108 out-of-scope expenditures (payments that by-pass HHs, (payments that by-pass HHs, non-RX nondurables, misc PHC)non-RX nondurables, misc PHC)

MEPSMEPS $833B$833B

Percentage GapPercentage Gap 13%13%

MEPS-Consistent NHEA MEPS-Consistent NHEA Personal Health Care, 2002Personal Health Care, 2002

xx

Source: Selden and Sing (2008a)

MEPS-Consistent NHEA Personal MEPS-Consistent NHEA Personal Health Care, 2002 (cont)Health Care, 2002 (cont)

Producing this chart is a Producing this chart is a lotlot of work! of work! Aligning service definitionsAligning service definitions

– Hospital-owned home health servicesHospital-owned home health services– ““Physician and clinical services” (allocated to Physician and clinical services” (allocated to

Physician vs. Other professional as in MEPS)Physician vs. Other professional as in MEPS) LTC estimatesLTC estimates

– Acute care of LTC residentsAcute care of LTC residents– Hospital-owned nursing homesHospital-owned nursing homes

All adjustments by sources of payment and All adjustments by sources of payment and type of service...type of service...

Closing the 13% Gap with Closing the 13% Gap with MEPS-Consistent NHEA PHCMEPS-Consistent NHEA PHC

Step 1: Account for wider public coverage gap Step 1: Account for wider public coverage gap by upweighting persons with Medicaid/CHIP by upweighting persons with Medicaid/CHIP coverage coverage – 10 percent increase10 percent increase– Brings enrolled population into alignment with Brings enrolled population into alignment with

administrative enrollment countsadministrative enrollment counts– Raking post-stratification used so that adjustment Raking post-stratification used so that adjustment

does not change full MEPS distribution of age, does not change full MEPS distribution of age, race, sex, Medicare enrollment, and uninsurance race, sex, Medicare enrollment, and uninsurance (so adjustment in essence entails modest (so adjustment in essence entails modest reduction in private coverage)reduction in private coverage)

Closing the 13% Gap with Closing the 13% Gap with MEPS-Consistent NHEA PHCMEPS-Consistent NHEA PHC

Step 2: Account for differential attrition of high-Step 2: Account for differential attrition of high-cost casescost cases– upweighted top 3 percent of distribution by major upweighted top 3 percent of distribution by major

insurance group (by average of 18%)insurance group (by average of 18%)– adjustment justified by analyses of claims data adjustment justified by analyses of claims data

(public and private)(public and private)– upweighting used raking post-stratification to upweighting used raking post-stratification to

preserve distribution by age, race, sex, poverty, preserve distribution by age, race, sex, poverty, coverage, regioncoverage, region

– closed 37% of the gapclosed 37% of the gap

Closing the 13% Gap with Closing the 13% Gap with MEPS-Consistent NHEA PHCMEPS-Consistent NHEA PHC

Step 3: Close remaining gap Step 3: Close remaining gap – Allocate lab test gap according to physician Allocate lab test gap according to physician

visitsvisits– Scale remaining expendituresScale remaining expenditures– Brings MEPS up from $881B to $964BBrings MEPS up from $881B to $964B

Out-of-Scope PHC SpendingOut-of-Scope PHC Spending

CategoryCategory Allocated byAllocated by AmountAmount

Other PHCOther PHC Home Health UseHome Health Use $46B$46B

Non-RXNon-RX RXRX $31B$31B

Public payments Public payments that by-pass HHsthat by-pass HHs

Various: Uncompensated Various: Uncompensated Care, Medicare Hospital, Care, Medicare Hospital, Spending by Low-IncomeSpending by Low-Income

$25B$25B

OtherOther VariousVarious $6.6B$6.6B

New MEPS TotalNew MEPS Total $1.072T$1.072T

Note: Useful for reform simulations that would, say, cover uninsured or increase/decrease Medicaid population

Non-PHC SpendingNon-PHC Spending

CategoryCategory Allocated byAllocated by AmountAmount

Admin Private InsAdmin Private Ins PremiumsPremiums $97B$97B

Admin Public InsAdmin Public Ins Public expendituresPublic expenditures $26B$26B

Public HealthPublic Health Total expendituresTotal expenditures $52B$52B

Public ResearchPublic Research RX useRX use $28B$28B

Public Const.Public Const. Hospital expendituresHospital expenditures $14B$14B

New MEPS TotalNew MEPS Total $1.291T$1.291T

Note: Useful for benefit incidence and equity analyses

Application: Reform SimulationsApplication: Reform Simulations

NHEA-aligned MEPS data is at the heart NHEA-aligned MEPS data is at the heart of health reform simulationsof health reform simulations

Improves on situation in early 1990s, Improves on situation in early 1990s, when simulations of previous health when simulations of previous health reforms differed largely due to different reforms differed largely due to different starting pointsstarting points

Projected NHEA-aligned MEPSProjected NHEA-aligned MEPS

Application: 20% Burden Frequency among Application: 20% Burden Frequency among Nonelderly with Private Insurance: With and Nonelderly with Private Insurance: With and without Adjusting for Tax Expenditures, 2002without Adjusting for Tax Expenditures, 2002

Frequency of 20% Burdens from OOP Spending on Premiums and Care

44.7

%

16.6

%

8.4%

2.4%

44.2

%

12.2

%

5.2%

1.4%

0%10%20%30%40%50%60%

<100 100-199 200-399 400+

Percentage of Poverty Line

Unadjusted

Adjusted

Source: Selden (IJHCFE, 2008)

Tax Expenditure Effect on Burdens is Small, Tax Expenditure Effect on Burdens is Small, Compared to: Within-Year Burdens and Compared to: Within-Year Burdens and

Cost-Sharing in Public Coverage for ChildrenCost-Sharing in Public Coverage for Children

20% Burdens, All Nonelderly: Annual Versus Monthly

21.5

%

10.4

%

5.9%

1.8%

43.7

%

34.9

%

28.9

%

16.9

%

0%10%

20%30%40%

50%60%

<100 100-199 200-399 400+

Percentage of Poverty Line

Annual

Any Month

Source: Selden (HSR, 2009)

20% Burdens, Publicly-Insured Children: With and without Modest Cost-Sharing

16.3

%

11.6

%

9.4%

42.8

%

15.8

%

10.9

%

0%10%

20%30%40%

50%60%

<100 100-199 200-399

Percentage of Poverty Line

Zero Cost-Sharing

Modest Cost-Sharing

Source: Selden et al. (HA, 2009)

Application: Benefit Incidence Application: Benefit Incidence Analysis of Public SpendingAnalysis of Public Spending

* 80% of health care spending for persons in poor health paid by public sector

Source: Selden and Sing (Health Affairs, 2008)

Benefit Incidence (cont.)Benefit Incidence (cont.)

* Nearly half of all health care in highest income group paid by public sector

Source: Selden and Sing (Health Affairs, 2008)

Application: Equity in Health Application: Equity in Health Care Finance, 2002Care Finance, 2002

0

20

40

60

80

100

1 2 3 4 5 6 7 8 9

Deciles of Population (lowest first)

Cu

mu

lati

ve S

hare

s (

%)

Income

Inc Tax

Social Ins

Prem

OOP

Total

Average Combined Burdens by Average Combined Burdens by Financing Source and Income DecileFinancing Source and Income Decile

40

2723 22 21 20 19 18 17 15

18

05

1015202530354045

All 1 2 3 4 5 6 7 8 9 10

Deciles

Perc

en

tag

e o

f P

re-T

ax

Inco

me

OOP

Premiums

Soc Ins

Oth Tax

Inc Tax

ConclusionConclusion

Adjusting MEPS to peg NHEA Adjusting MEPS to peg NHEA benchmarks and capture tax benchmarks and capture tax expenditures is a painstaking endeavorexpenditures is a painstaking endeavor

The result, however, is a powerful tool The result, however, is a powerful tool for reform simulations and equity for reform simulations and equity analysesanalyses

BibliographyBibliography

Banthin and Bernard (2006) Changes in Financial Banthin and Bernard (2006) Changes in Financial Burdens for Health Care: National Estimates for the Burdens for Health Care: National Estimates for the Population Younger Than 65 Years, 1996 to 2003, Population Younger Than 65 Years, 1996 to 2003, JAMAJAMA, v. 296, n. 22: 2712-2719. , v. 296, n. 22: 2712-2719.

Selden and Banthin (2003) The ABC's of children's Selden and Banthin (2003) The ABC's of children's health care: How the Medicaid expansions affected health care: How the Medicaid expansions affected access, burdens, and coverage between 1987 and access, burdens, and coverage between 1987 and 1996, 1996, InquiryInquiry 40:133-45. 40:133-45.

Selden, Kenney, Pantell, Ruhter (2009) “Cost Sharing Selden, Kenney, Pantell, Ruhter (2009) “Cost Sharing In Medicaid And CHIP: How Does It Affect Out-Of-In Medicaid And CHIP: How Does It Affect Out-Of-Pocket Spending?” Pocket Spending?” Health Affairs Health Affairs ((http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w607))

Bibliography (cont.)Bibliography (cont.)

Selden (2009) The Within-Year Concentration of Selden (2009) The Within-Year Concentration of Medical Care: Implications for Family Out-of-Pocket Medical Care: Implications for Family Out-of-Pocket Expenditure Burdens, Expenditure Burdens, Health Services ResearchHealth Services Research, , 44(3):1029-1051.44(3):1029-1051.

Selden and Gray (2008b) Tax Subsidies For Selden and Gray (2008b) Tax Subsidies For Employment-Related Health Insurance: Estimates For Employment-Related Health Insurance: Estimates For 2006, 2006, Health AffairsHealth Affairs ( (http://content.healthaffairs.org/cgi/content/abstract/25/6/1568)

Selden (2008) The effect of tax subsidies on high Selden (2008) The effect of tax subsidies on high health care expenditure burdens in the United States, health care expenditure burdens in the United States, International Journal of Health Care Finance and International Journal of Health Care Finance and EconomicsEconomics, v. 8: 209-223., v. 8: 209-223.

Bibliography (cont.)Bibliography (cont.)

Selden and Sing (2008a) Aligning the Medical Selden and Sing (2008a) Aligning the Medical Expenditure Panel Survey to Aggregate U.S. Expenditure Panel Survey to Aggregate U.S. Benchmarks, MEPS Working Paper (Benchmarks, MEPS Working Paper (http://www.meps.ahrq.gov/mepsweb/data_stats/Pub_ProdResults_Details.jsp?pt=Working%20Paper&opt=2&id=862)

Selden and Sing (2008b) The Distribution Of Public Selden and Sing (2008b) The Distribution Of Public Spending For Health Care In The United States, 2002, Spending For Health Care In The United States, 2002, Health Affairs (Health Affairs (http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.5.w349v1)

Selden, Equity in the Finance and Delivery of Health Selden, Equity in the Finance and Delivery of Health Care in the United States (unpublished)Care in the United States (unpublished)