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Fiscal Year 2001: Medical Expenditure Panel Survey (MEPS)


Purpose and Method of Operation
Background and Major Components of MEPS
MEPS Funding Summary
Funding History
Rationale for the Fiscal Year 2001 Request

Purpose and Method of Operation

The objectives of AHRQ's Medical Expenditure Panel Survey are to provide public and private sector decisionmakers with the ability to:
  • Obtain timely national estimates of health care use and expenditures, private and public health insurance coverage, and the availability, costs and scope of private health insurance benefits among the U.S. population.
  • Analyze changes in behavior as a result of market forces or policy changes (and the interaction of both) on health care use, expenditures, and insurance coverage.
  • Develop cost and savings estimates of proposed changes in policy.
  • Identify the impact of changes in policy for key subgroups of the population (i.e., who benefits and who pays more).

These objectives are accomplished through the fielding of the Medical Expenditure Panel Survey (MEPS). MEPS is an interrelated series of surveys that replaces the National Medical Expenditure Survey (NMES). MEPS not only updates information that was last collected more than a decade ago in fiscal year 1987, but also provides more timely data, at a lower cost per year of data, through the move to an ongoing data collection effort.

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AHRQ's Medical Expenditure Panel Survey collects detailed information regarding the use and payment for health care services from a nationally representative sample of Americans. Since 1977, AHRQ's expenditure surveys have been an important and unique resource for public and private sector decisionmakers. No other surveys supported by the Federal government or the private sector provide this level of detail regarding:

  • The health care services used by Americans at the household level and their associated expenditures (for families and individuals).
  • The cost, scope, and breadth of private health insurance coverage held by and available to the U.S. population.
  • The specific services purchased through out-of-pocket and/or third-party payments.

AHRQ fields a new MEPS panel each year. Two calendar years of information are collected from each household in a series of five rounds of data collection over a 2-year period. These data are then linked with additional information collected from the respondents' medical providers, employers, and insurance providers. This series of data collection activities is repeated each year on a new sample of households, resulting in overlapping panels of survey data.

The data from earlier surveys (1977 and 1987) have quickly become a linchpin for the nation's economic models and their projections of health care expenditures and utilization. This level of detail enables public- and private-sector economic models to develop national and regional estimates of the impact of changes in financing, coverage, and reimbursement policy, as well as estimates of who benefits and who bears the cost of a change in policy. No other surveys provide the foundation for estimating the impact of changes on different economic groups or special populations of interest, such as the poor, elderly, veterans, the uninsured, or racial/ethnic groups.

The public sector (e.g., Office of Management and Budget [OMB], Congressional Budget Office [CBO], Medicare Payment Advisory Commission [MedPAC], and Treasury Department) relies upon these data to evaluate health reform policies, the effect of tax code changes on health expenditures and tax revenue, and proposed changes in government health programs such as Medicare. In the private sector (e.g., RAND, Heritage Foundation, Lewin-VHI, and the Urban Institute), these data are used by many private businesses, foundations, and academic institutions to develop economic projections. These data represent a major resource for the health services research community at large.

Based on the Department's Survey Integration Plan, MEPS linked its household survey and NCHS' National Health Interview Survey (NHIS), achieving savings in sample frame development and enhancements in analytic capacity. MEPS has also moved from a large survey every 10 years to following a smaller cohort of families on an ongoing basis. Doing so has four primary benefits:

  • It decreases the cost per year of data collected.
  • It provides more timely data on a continuous basis.
  • It creates for the first time the ability to assess changes over time.
  • It permits the correlation of these data with the National Health Accounts.

The first MEPS data (from 1996) became available in April 1997. This rich data source has become not only more comprehensive and timely, but MEPS' new design has enhanced analytic capacities, allowed for longitudinal analyses, and developed greater statistical power and efficiency.

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Background and Major Components of MEPS

MEPS consists of a series of interrelated surveys. The individual components of MEPS and the information each provides is outlined below.

MEPS Components

Household Survey. Five interviews are conducted with each new sample of households for MEPS over a 2-year period to obtain health care use, expenditure and insurance coverage data for two consecutive calendar years. The 1996 MEPS sample included 10,800 families; the combined 1997 MEPS sample consisted of 14,100 families; and the combined 1998 MEPS sample consisted of 10,800 families. The combined 1999 MEPS sample consisted of 11,000 new families, and the combined 2000 MEPS sample will also consist of 11,000 new families. This is the only survey that collects health care expenditures of American families.

Medical Provider Survey. Interviews are conducted annually with 3,000 hospitals, 12,000 office-based physicians, 500 home health providers, and 7,000 hospital-identified physicians to obtain health care information on MEPS Household Survey participants. A separate interview is conducted to obtain information for each of the calendar years associated with the MEPS Household Survey Panel. This survey allows AHRQ to verify information collected at the household level and to get information from providers when it is not known by the household (e.g., households receiving Medicaid or that are in capitated plans will not know their expenditures).

MEPS Insurance Component—Health Insurance Plans Survey. Interviews are conducted annually with 7,000 employers, 500 unions, and 500 insurers to obtain detailed information on the health insurance benefits and premiums associated with health insurance coverage held by the MEPS Household Survey participants. A separate interview is conducted to obtain information for each of the calendar years associated with the MEPS Household Survey Panel. This survey allows for the evaluation of insurance purchasing choices and the impact of those choices on use and access to care.

MEPS Insurance Component—Establishment Level (formerly NEHIS). Interviews are conducted with 30,000 establishments to obtain national and State-specific (40 States) estimates of the availability of health insurance at the workplace, the type of coverage provided by employers, and the associated costs of coverage. For each establishment surveyed, the MEPS Insurance Component—Establishment Level Survey obtains information on the number and characteristics of plans offered, the scope and breadth of benefits included in each plan and the corresponding copayment provisions, the number of current workers and retirees enrolled in each plan, and whether each plan is fully or self-insured. The MEPS Insurance Component—Establishment Level Survey data also includes characteristics of each establishment including its size, the type of workforce employed, aggregate data on payroll and available fringe benefits, industrial classification, and corporate status.

The information derived from these surveys will enable the Congress, the Administration, and other public- and private-sector policymakers to evaluate the impact of:

  • Growing enrollment in managed care.
  • Enrollment in different types of managed care.
  • Changes in how chronic care and disability are managed and financed.
  • Alternative approaches to provision of long-term care.
  • Changes in employer-supported health insurance.
  • Changes in Federal and State policy.

In addition to assessing broad trends such as these, MEPS addresses a host of specific, policy-relevant questions.

MEPS is making a significant contribution to improving the accuracy of the nation's economic models in at least two ways:

  • First, with each passing year, attempts to extrapolate the 1987 data to the current year are increasingly subject to error; current data are essential and MEPS will provide them.
  • Second, the fact that this survey provides a continuing time series for these sophisticated models will significantly improve their ability to identify and assess trends that may not be obvious with periodically collected panel data (for instance, 1977 and 1987).

Thus, the critical importance of collecting this continuing series of data cannot be overemphasized.

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MEPS Funding Summary

Authorizing Legislation—Title IX and Section 301 of the Public Health Service Act

Budget Authority/ FTEs 1999
2000 Final
Increase or Decrease

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Funding History

Funding for the MEPS program during the last 5 years has been as follows:

Year AmountFTEs
1997 $38,886,000 ---
1998 $36,300,000 ---
1999 $29,300,000 ---
2000 $36,000,000 ---
2001 $40,850,000 ---

Sources of MEPS funding follow:

Year Budget Authority 1% EvaluationTotal
1997 Actual $224,000 $38,662,000 $38,886,000
1998 Actual --- $36,300,000 $36,300,000
1999 Actual --- $29,300,000 $29,300,000
2000 Appropriation --- $36,000,000 $36,000,000
2001 Request --- $40,850,000 $40,850,000

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Rationale for the Fiscal Year 2001 Request

The fiscal year 2001 Request for MEPS totals $40,850,000 in 1 percent evaluation funds. The total reflects an increase of $4,850,000 from the fiscal year 2000 level of $36,000,000. This request consists of:

  • Ongoing data collection efforts and related survey activities for MEPS ($31,500,000).
  • Implement enhancements begun or developed in fiscal year 2000 ($7,000,000).
  • New enhancement for Report to the Nation on the Quality of Health Care ($2,350,000).

In early fiscal year 1999, AHRQ negotiated and awarded a new contract for continuing data collection and data processing for the MEPS Household and Medical Provider Components. The cost of "traditional" MEPS data collection—that is, without the increased sample size and additional questions required to capture more information on clinical conditions, special populations and regional-level data—now averages approximately $32,000,000 per year.

The Agency currently is reviewing MEPS operations to determine the sample size and number of questions that can be added at the fiscal year 2000 funding level of $36,000,000 to determine the level of enhanced reporting that can be achieved within that amount. We expect to report on the results of this analysis in the near future. The fiscal year 2001 request level of $40,850,000 fully supports the base cost of MEPS and provides for $9,350,000 for increased household sample size, expanded clinical detail, and additional questions that will provide detailed information on special populations.

In fiscal year 2001 data collection will be ongoing for the MEPS Household Survey, the MEPS Medical Provider Survey, and the MEPS Insurance Component, which consists of the MEPS Health Insurance Plans Survey and a national employer health insurance survey. More specifically, in-person interviews will be conducted with more than 10,000 families to obtain calendar year 2000 and 2001 health care data. The Medical Provider Survey will consist of interviews with more than 3,000 facilities, 8,500 office-based providers, 7,000 hospital-identified physicians, 500 home health providers. In addition, the MEPS Insurance Component will consist of interviews with more than 40,000 employers and 1,000 insurance carriers.

Part of the MEPS activities in fiscal year 2001 will be to pursue the long-term care component of the MEPS through survey integration with HCFA and/or NCHS. When the last cycle of the MEPS long-term care module was completed in 1996, AHRQ, in cooperation with the Department, determined that the long-term care MEPS component should be integrated with other long-term care data collections in the Department. AHRQ will begin planning and design activities for this survey integration activity in fiscal year 2001 and will complete the activity in fiscal year 2002. It is likely that AHRQ's support for this integration initiative will require additional resources from AHRQ's other budget line, Research on Health Care Costs, Quality and Outcomes. AHRQ will work closely with NCHS, HCFA, and ASPE to assure that in the future, data on the quality, costs and utilization of long-term care services are available to researchers and policymakers.

All of the MEPS components will be heavily engaged in survey-related activities directed to the following tasks: data editing, imputation, data preparation and data processing, development of estimation weights and variance estimation capabilities for the component surveys, preparation of public use tapes, and development of analytical and methodological reports.

The fiscal year 2001 Request of $40,850,000 continues the enhancements to the analytic capacity of MEPS begun in fiscal year 2000. The increase of $4,850,000 will be used for the following enhancements, which will build on the changes implemented in fiscal year 2000:

  • Include in the MEPS household sample sufficient sample to permit more focused analyses of the quality of care received for these special populations.
  • Expand the clinical detail in the household and medical provider surveys. AHRQ will enhance the detail collected in the Household Component on use of clinical preventive services and specific aspects of care for high priority conditions. The size of the Medical Provider Component will also be enhanced to provide additional information and verification.
  • Continue a more extensive module on children, to enable users to understand the impact of changes in health and human service programs.

With these enhancements, we will complete enhancements started in fiscal year 2000 and be able to:

  • Report on the quality of care Americans receive at the national and regional level, in terms of clinical quality, patient satisfaction, access, and health status both in managed care and fee-for-service settings.
  • Examine quality, cost, access, and use of clinical preventive services. Enhanced data collection, in conjunction with the existing MEPS capacity to examine differences in minorities and ethnic groups, will provide critical data for closing the gaps in medical care as outlined in the President's Race Initiative.
  • Track the national impact of new Federal and State programs, including Title XXI (the new State Children's Health Insurance Program), on access and cost of care for children, and compare and evaluate the effectiveness of different strategies to reduce the number of uninsured children and increase access to needed services by those who are covered.

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Current as of February 2000


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