Dataset Information

Medical Spending of the US Elderly.

ABSTRACT: We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 and that they are very concentrated: the top 10 per cent of all spenders are responsible for 52 per cent of medical spending in a given year. In addition, those currently experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We also find that the poor consume more medical goods and services than the rich and have a much larger share of their expenses covered by the government. Overall, the government pays for over 65 per cent of the elderly's medical expenses. Despite this, the expenses that remain after government transfers are even more concentrated among a small group of people. Thus, government health insurance, while potentially very valuable, is far from complete. Finally, while medical expenses before death can be large, on average they constitute only a small fraction of total spending, both in the aggregate and over the life cycle. Hence, medical expenses before death do not appear to be an important driver of the high and increasing medical spending found in the US.

SUBMITTER: De Nardi M

PROVIDER: S-EPMC6680320 | biostudies-literature | 2016 Sep-Dec

REPOSITORIES: biostudies-literature

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Medical Spending of the US Elderly.

De Nardi Mariacristina M French Eric E Jones John Bailey JB McCauley Jeremy J

Fiscal studies 20160901 3-4

We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 and that they are very concentrated: the top 10 per cent of all spenders are responsible for 52 per cent of medical spending in a given year. In addition, those currently experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We al ...[more]

PMID: 31404348

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Project description:ObjectiveTo estimate the relationship between variations in medical spending and health outcomes of the elderly.Data sources1992-2002 Medicare Current Beneficiary Surveys.Study designWe used instrumental variable (IV) estimation to identify the relationships between alternative measures of elderly Medicare beneficiaries' medical spending over a 3-year observation period and health status, measured by the Health and Activity Limitation Index (HALex) and survival status at the end of the 3 years. We used the Dartmouth Atlas End-of-Life Expenditure Index defined for hospital referral regions in 1996 as the exogenous identifying variable to construct the IVs for medical spending.Data collection/extraction methodsThe analysis sample includes 17,438 elderly (age >64) beneficiaries who entered the Medicare Current Beneficiary Survey in the fall of each year from 1991 to 1999, were not institutionalized at baseline, stayed in fee-for-service Medicare for the entire observation period, and survived for at least 2 years. Measures of baseline health were constructed from information obtained in the fall of the year the person entered the survey, and changes in health were from subsequent interviews over the entire observation period. Medicare and total medical spending were constructed from Medicare claims and self-reports of other spending over the entire observation period.Principal findingsIV estimation results in a positive and statistically significant relationship between medical spending and better health: 10 percent greater medical spending over the prior 3 years (mean=U.S.$2,709) is associated with a 1.9 percent larger HALex value (p=.045; range 1.2-2.2 percent depending on medical spending measure) and a 1.5 percent greater survival probability (p=.039; range 1.2-1.7 percent).ConclusionsOn average, greater medical spending is associated with better health status of Medicare beneficiaries, implying that across-the-board reductions in Medicare spending may result in poorer health for some beneficiaries.

Project description:ImportanceHigh use of subspecialty care is an important source of health care spending. Medical subspecialty care in particular may duplicate the scope of practice of the primary attending physicians for patients hospitalized for medical conditions. Under value-based payments, which aim to control overall spending during an episode of hospitalization (including Part B physician fees), subspecialty consultations may be a target for hospitals working to reduce costs.ObjectivesTo measure the use of subspecialty consultation for Medicare beneficiaries hospitalized for nonsurgical conditions; to compare payments for consultative and nonconsultative care, adjusted for case mix and demographics; and to measure variation in payments across hospital referral regions (HRRs).Design, setting, and participantsThis retrospective cross-sectional study included a 15% random sample of Medicare fee-for-service beneficiaries enrolled in Parts A and B and identified all discharges after acute care hospital stays for nonsurgical conditions from January 1 through December 31, 2014. A total of 735 627 discharges were included. The analyses were conducted from December 1, 2017, through February 12, 2019. Total Part B payments were extrapolated to the population of Medicare fee-for-service beneficiaries.Main outcomes and measuresProbability of any consultation during a hospitalization was estimated using logistic regression. The number of consultations per stay and the number of consultative visits per hospital day were estimated using Poisson regression. Part B payments for consultative and nonconsultative care were estimated using generalized linear regression with gamma-log link. All models were adjusted for patient demographics and case mix. Payment models also included HRR fixed effects.ResultsA total of 735 627 discharges from 4534 hospitals in 2014 were included in the analysis (41.2% men and 58.8% women; mean [SD] age, 79.6 [8.9] years; 84.7% white, 10.1% black, and 5.2% other race). After adjusting for patient case mix and demographics, a 6-fold variation between the top and bottom quintiles of hospitals (relative difference, $401 [95% CI, $368-$434]) and HRRs (relative difference, $363 [95% CI, $337-$389]) was found in payments per stay for consultative care. Part B payments for consultative care by medical subspecialists accounted for 41.3% of payments for physician visits during hospitalization and totaled $1.3 billion in 2014.Conclusions and relevanceThe substantial variation in the use of subspecialty consultative care suggests potential opportunities for cost savings.

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Medical Spending of the US Elderly.

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Medical Spending of the US Elderly.

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