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Health Care Costs and Financing

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Reconciliation of MEPS and the National Health Expenditure Accounts aids benchmarking and policy simulation efforts

The National Health Expenditure Accounts (NHEA) and Medical Expenditure Panel Survey (MEPS) provide two of the most comprehensive sources of estimates of national health care expenditures. The NHEA include the entire U.S. population and are primarily based on provider revenue and government administrative data. In contrast, MEPS contains person-level data on health care expenditures from a survey of a nationally representative sample of households in the civilian, noninstitutionalized population.

A study compared the two estimates for 2002 to aid benchmarking efforts for both estimates and to provide a consistent baseline of health expenditure data for health policy simulations. After adjusting MEPS and NHEA for differences in population, covered services, and other measurement concepts, the study estimated a $133 billion or 13.8 percent difference in their estimates of U.S. health care expenditures.

Agency for Healthcare Research and Quality (AHRQ) researchers Merrile Sing, Ph.D., Jessica S. Banthin, Ph.D., and Thomas M. Selden, Ph.D., and colleagues at the Centers for Medicare & Medicaid Services (CMS) emphasize that aligning or reconciling the two estimates entails numerous assumptions.

The reconciliation required detailed estimates for expenditure categories and population subsets that are often difficult to measure accurately. Some of the differences they found between MEPS and NHEA by service category and source of payment may be due to measurement issues. For MEPS, although physician utilization measures align closely with physician utilization data from the National Ambulatory Medical Care Survey, the gaps found for physician and hospital expenditures underscore the merit of improving data collection from high-expenditure cases.

For NHEA, part of the large gaps in private health insurance and out-of-pocket expenditures may arise because private expenditures in NHEA are calculated as the residual of total health minus government expenditures. Thus, they are subject to measurement issues associated with provider surveys as well as government expenditure data.

There may also be NHEA measurement issues that stem from the complex financial arrangements in the U.S. health care system, which include provider payments (such as bonuses) that are not directly linked to specific patient care events. The authors' explanation of why MEPS and NHEA yield different expenditure estimates will help AHRQ and CMS focus future research efforts in the appropriate areas to improve expenditure estimates from MEPS and the NHEA.

More details are in "Reconciling medical expenditure estimates from the MEPS and NHEA, 2002," by Drs. Sing, Banthin, Selden, and others, in the Fall 2006 Health Care Financing Review 28(1), pp. 25-40. Reprints (AHRQ Publication No. 07-R033) are available from the AHRQ Publications Clearinghouse.

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