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Performance Budget Submission for Congressional Justification

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Fiscal Year 2002: Medical Expenditure Panel Survey (MEPS)


Purpose and Method of Operation
Background and Major Components of MEPS
Funding Summary
Funding History
Fiscal Year 2002 Budget Policy

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.
  • Obtain information on access to medical care, quality and satisfaction for the US population and for those with specific conditions, and for important subpopulations.
  • 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 health care expenditure data and new information on the quality of care received, 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 2½-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 linch pin 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. In the past year, data on premium costs from the MEPS Insurance Component has been used by the Bureau of Economic Analysis to produce estimates of the Gross Domestic Product for the Nation. In addition, the MEPS establishment surveys have been coordinated with the National Compensation Survey conducted by the Bureau of Labor Statistics through participation in the Inter-Departmental Work Group on Establishment Health Insurance Surveys.

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 (select for a summary of key findings). 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 follows.

Household Survey. Five interviews are conducted with each new sample of households for MEPS over a 2½-year period to obtain health care use, expenditure and insurance coverage data for 2 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 and 2000 MEPS samples consisted of 11,000 families, and the combined 2001 MEPS sample consists of 13,500 families. This is the only survey that collects health care expenditures of American families.

Medical Provider Survey. Interviews are conducted annually with 4,000 hospitals, 20,000 office-based physicians, 700 home health providers, and 10,000 hospital-identified physicians and 8,000 pharmacies 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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Funding Summary

The funding summary for MEPS follows (select for Text Version).

Authorizing Legislation—Section 927 (c) of the Public Health Service Act

Funding History 2000
Final Appropriation
2002 Estimated
2000 Actual
2002 Estimated
2001 Final Appropriation

Budget Authority






Full-Time Equivalents


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Funding History

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

Year Budget
1% Evaluation Total Full-Time Equivalents

1998 Actual

$36,300,000 $36,300,000

1999 Actual

$29,300,000 $29,300,000

2000 Actual

$36,000,000 $36,000,000
2001 Appropriation $40,850,000 $40,850,000
2002 Request $48,500,000 $48,500,000

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Fiscal Year 2002 Budget Policy

The Fiscal Year 2002 request for the Medical Expenditure Panel Surveys (MEPS) totals $48,500,000, all requested in PHS evaluation funds. The total reflects an increase of $7,650,000 from the Fiscal Year 2001 level of $40,850,000. This increase consists of:

  • $4,650,000 in continuation costs for Fiscal Year 2000 and Fiscal Year 2001 enhancements to the sample size and content of the MEPS Household and Medical Provider Surveys necessary to satisfy the congressional mandate to submit an annual report on national trends in health care quality.
  • $3.0 million for enhancements to the MEPS data content and sample size to support the National Quality Report ($2.0 million) and the Department's Initiative to Eliminate Racial and Ethnic Disparities ($1.0 million).

In order to develop an annual report on national trends in health care quality, the MEPS Household Component sample size increased from 9,000 households in 2000 to 13,500 households in 2001. The funding in Fiscal Year 2002 reflects the first full calendar year of data collection at the 13,500 household level. In FY 2001, increased MEPS Household Component data collection costs associated with this sample enhancement are incurred over an 8 month period (February-September).

The funding in Fiscal Year 2002 also reflects a major sample increase in the sample size of the MEPS Medical Provider Survey associated with the 2001 MEPS Household Sample (1,000 additional hospitals, 8,000 additional office-based physicians, 3,000 additional hospital-identified physicians and 2,000 additional pharmacies to obtain health care information on MEPS respondents). In Fiscal Year 2002, the following additional enhancements will be implemented:

  • The MEPS 2002 Household Sample will be increased from 13,500 to 15,000 households.
  • The MEPS Household linked Insurance Component Sample of establishments conducted in 2002 will reflect the corresponding relative sample increase in the household sample size.

An additional $3.0 million will be allocated for enhancements to the MEPS data content and sample size to support the National Quality Report ($2.0 million) and the Department's Initiative to Eliminate Racial and Ethnic Disparities ($1.0 million). These funds will permit the implementation of an oversample of Asian and Pacific Islanders and individuals with incomes less than 200 percent of the poverty level in MEPS and improvements in the collection of information from employers about health insurance offerings for these populations.

These enhancements, in concert with the existing MEPS capacity to examine differences in the cost, quality and access to care for minorities, ethnic groups and low income individuals, will provide critical data for the National Quality Report and the National Disparities Report. The funds will also cover additional improvements in the MEPS computer-assisted interview programs to support the National Quality Report.

In Fiscal Year 2002 data collection will be ongoing for:

  • The MEPS Household Survey.
  • The MEPS Medical Provider Survey.
  • 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 16,000 families to obtain calendar year 2002 health care data. The Medical Provider Survey will consist of interviews with more than 4,000 facilities, 20,000 office-based providers, 10,000 hospital-identified physicians, 700 home health providers and 8,000 pharmacies. In addition, the MEPS Insurance Component will consist of interviews with more than 40,000 employers.

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Current as of April 2001


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