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Health Care Costs and Financing

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An enhanced MEPS enables national studies of health care coverage, access, costs, and health status of U.S. households

Since 1996, the Agency for Healthcare Research and Quality's Medical Expenditure Panel Survey (MEPS), a nationally representative survey of U.S. households, has been conducted annually to permit estimates of health care use, expenditures, insurance coverage, and sources of payment for the U.S. civilian noninstitutionalized population. MEPS provides a strong foundation for estimating the impact of health care policy changes on different economic groups and special populations, such as the poor, elderly, veterans, the uninsured, and racial/ethnic groups.

The breadth and depth of MEPS data enable public- and private-sector analysts to develop economic models designed to produce 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 such policy changes. To facilitate the use of MEPS data, while maintaining the confidentiality promised to MEPS participants, AHRQ has developed a Data Center in Rockville, MD, where researchers with approved projects can be allowed access to data files that are not available for public dissemination. The MEPS Web site at has information on data availability, the Data Center, and abstracts of important research using MEPS data.

The following eight articles on MEPS, authored by AHRQ staff, are featured in a special supplement to the journal Medical Care 41(7), with a foreword by Steven B. Cohen, Ph.D., Director of AHRQ's Center for Financing, Access, and Cost Trends, AHRQ Director, Carolyn M. Clancy, M.D., and John Z. Ayanian, M.D., of Brigham and Women's Hospital and Harvard Medical School. They highlight new design enhancements to the MEPS and recent national studies of coverage, access, cost, and health status.

Reprints of the foreword (AHRQ Publication No. 03-R052) are available from the AHRQ Publications Clearinghouse and most of the following articles (see summaries for publication numbers) are available from AHRQ.

Cohen, S.B. "Design strategies and innovations in the medical expenditure panel survey," pp. 5-12.

This paper provides an overview of the MEPS design and recent innovations to survey content and scale. It also provides a summary of the framework used for introducing new MEPS design components, such as over-sampling of individuals predicted to have high health care costs and the collection of additional data on health status.

AHRQ Publication No. 03-R053 is available from the AHRQ Publications Clearinghouse.

Selden, T.M., and Banthin, J.S. "Health care expenditure burdens among elderly adults: 1987 and 1996," pp. 13-23.

These authors used data from the 1987 National Medical Expenditure Survey (NMES) and the 1996 MEPS to estimate how frequently elderly adults live in families whose health expenditures exceed 20 to 40 percent of their after-tax disposable income to inform the ongoing debate on Medicare benefits. Results revealed high health care expenditure burdens among elderly adults and the varying protective influence of insurance coverage on these expenditures.

AHRQ Publication No. 03-R054 is available from the AHRQ Publications Clearinghouse.

Kirby, J.B., Machlin, S.R., and Cohen, J.W. "Has the increase in HMO enrollment within the Medicaid population changed the pattern of health service use and expenditures?" pp. 24-34.

These investigators analyzed data from the 1987 NMES and 1997 MEPS to describe changes in health services use and expenditures among Medicaid recipients in 1987 and 1997 and to estimate the extent to which the increase in HMO enrollment has influenced these changes. Results revealed that 1997 Medicaid HMO enrollees had significantly fewer hospital visits than 1987 Medicaid enrollees and spent significantly less on health services than 1997 non-HMO enrollees.

AHRQ Publication No. 03-R055 is available from the AHRQ Publications Clearinghouse.

Cooper, P.F., and Vistnes, J. "Workers' decisions to take-up offered health insurance coverage: Assessing the importance of out-of-pocket premium costs," pp. 35-43.

This study used data from the 1997 to 1999 MEPS-Insurance Component to examine the relationship between workers' decisions to take-up offers of health insurance and annual out-of-pocket contributions, total premiums, and employer and workforce characteristics. They conclude that reducing employee contributions will increase take-up rates. However, even when employees pay nothing for their coverage, some employees elect not to enroll.

AHRQ Publication No. 03-R060 is available from the AHRQ Publications Clearinghouse.

Moeller, J.F., Cohen, S.B., Mathiowetz, N.A., and Wun, L.M. "Regression-based sampling for persons with high health expenditures: Evaluating accuracy and yield with the 1997 MEPS," pp. 44-52.

Using the 1987 NMES, the investigators developed a probabilistic model to select households from the 1996 National Health Interview Survey likely to contain individuals incurring high levels of medical expenditures in the 1997 MEPS. The objective was to identify the characteristics of the individuals most likely to incur high levels of medical expenditures in a subsequent year and use that information for sampling purposes. In this paper, the authors evaluate the success of this predictive model for purposes of targeting individuals most likely to incur high health expenditures.

AHRQ Publication No. 03-R059 is available from the AHRQ Publications Clearinghouse.

Monheit, A.C. "Persistence in health expenditures in the short run: Prevalence and consequences," pp. 53-64.

After analyzing health care expenditure data from the 1996 and 1997 MEPS, this investigator found that a sizable representation of the population with high expenditures (for example, those with cancer, mental disorders, and diabetes) incur persistently high health expenditures. Of the top 5 percent of spenders in 1996, 30 percent maintained this ranking in 1997, and 45 percent were in the top 10 percent of 1997 spenders.

Editor's Note: Dr. Monheit, formerly of AHRQ, is now with the University of Medicine and Dentistry of New Jersey. Reprints of this article are not available from AHRQ.

Larson, S.L., and Fleishman, J.A. "Rural-urban differences in usual source of care and ambulatory service use," pp. 65-74.

Using data from the 1996 MEPS and from the Area Resource File, which includes the nine-category Urban Influence Codes for each county, these researchers examined the relationship between place of residence and access to and use of outpatient health services. Results suggest that using rural and urban definitions that go beyond the traditional dichotomy of metropolitan areas and non-metropolitan areas (for example, large suburbs) may help researchers and policymakers identify types of places where there is a disparity in health care access and subsequent use of health care services.

AHRQ Publication No. 03-R057 is available from the AHRQ Publications Clearinghouse.

Fleishman, J.A., and Lawrence, W.F. "Demographic variation in SF-12 scores: True differences or differential item functioning?" pp. 75-86.

In this study, the authors examine the extent to which differential item functioning (DIF, situations in which the psychometric properties of items are not invariant across different groups) contributes to observed subgroup differences in physical and mental health status among a national sample of 11,626 adults who completed a self-administered questionnaire in the 2000 MEPS. Results showed that adjusting for DIF reduced but did not eliminate age and education differences in physical and mental health. For mental health, however, adjusting for DIF resulted in black-white differences becoming not statistically significant.

AHRQ Publication No. 03-R056 is available from the AHRQ Publications Clearinghouse.

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