Prescription drugs and the changing concentration of health care expenditures

Health Affairs

Volumn 26, Issue 1, 2007, Pages 249-257

  Zuvekas, Samuel H ^a   Cohen, Joel W ^a  

^a AGENCY FOR HEALTHCARE RESEARCH AND QUALITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ADULT; AGE DISTRIBUTION; AGED; DRUG COST; ECONOMIC ASPECT; ECONOMICS; EPIDEMIOLOGY; HEALTH CARE COST; HEALTH INSURANCE; HUMAN; MIDDLE AGED; POPULATION DYNAMICS; PRESCRIPTION; REVIEW; STATISTICS; UNITED STATES;

ADULT; AGE DISTRIBUTION; AGED; AGED, 80 AND OVER; DRUG COSTS; HEALTH CARE SURVEYS; HEALTH EXPENDITURES; HUMANS; INFLATION, ECONOMIC; INSURANCE, PHARMACEUTICAL SERVICES; MIDDLE AGED; POPULATION DYNAMICS; PRESCRIPTIONS, DRUG; UNITED STATES;

EID: 33846692178     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.26.1.249     Document Type: Review

References (14)

1. C. Smith et al., "National Health Spending in 2004: Recent Slowdown Led by Prescription Drug Spending," Health Affairs 25, no. 1 (2006): 186-196;
2. and C. Borger et al., "Health Spending Projections through 2015: Changes on the Horizon," Health Affairs 25 (2006): w61-w73 (published online 22 February 2006; 10.1377/hlthaff.25.w61).
3. For example, between 1998 and 2003 the percentage of eligible employees who were offered an employer sponsored plan that required no employee contribution declined for both single and family coverage. B.L. Crimmel, Trends in Employer-Sponsored Health Insurance Plans That Required No Employee Contribution to the Premium Cost, 1998-2003, Statistical Brief no. 108, January 2006, http://207.188.212.220/mepsweb/data_files/publications/st108/ stat108.pdf (accessed 21 September 2006).
4. Recent analysis of MEPS data has also shown that families' out-of-pocket spending for health care and health insurance premiums grew much faster than income between 1996 and 2002. See M. Merlis, D. Gould, and B. Mahato, Family Out-of-Pocket Spending for Health Services: A Continuing Source of Financial Insecurity, June 2002, http://www.cmwf.org/usr_doc/ Merlis_risingoopspending_887.pdf (accessed 22 September 2006).
5. See, for example, J.F. Cogan, R.G. Hubbard, and D.P. Kessler, "Making Markets Work: Five Steps to a Better Health Care System," Health Affairs 24, no. 6 (2005): 1447-1457;
6. K.E. Thorpe, "The Rise in Health Care Spending and What to Do about It," Health Affairs 24, no. 6 (2005): 1436-1445;
7. and Congressional Budget Office, Cost Estimate: S. 1932, Deficit Reduction Act of 2005, 27 January 2006, http://www.cbo.gov/ftpdocs/70xx/ doc7028/s1932conf.pdf (accessed 22 September 2006).
8. M.L. Berk and A.C. Monheit, "The Concentration of Health Care Expenditures, Revisited," Health Affairs 20, no. 2 (2001): 9-18.
9. W. Yu and T. Ezzati-Rice, "Concentration of Health Care Expenditures in the U.S. Civilian Noninstitutionalized Population," Statistical Brief no. 81, May 2005, http://207.188.212.220/mepsweb/data_files/publications/st81/ stat81.pdf (accessed 22 September 2006).
10. E. Crimmins, "Trends in the Health of the Elderly," Annual Review of Public Health 25 (2004): 79-98.
11. The following simplified examples illustrate the mechanics of how the simulation procedure is applied person by person to the MEPS sample. Person 1 had $2,000 in prescription drug spending in 1996 and no other health care spending. Applying the ratio of 2003 to 1996 average expenditures per user, Person 1's simulated total health care spending becomes $4,481 ($2,000 x $950/$424). Person 2 has a $20,000 inpatient hospital stay and $5,000 in ambulatory spending in 1996, or $25,000 in total,which becomes a simulated $28,509 ([$20,000 x $14,112/$12,629] + [$5,000 x $1,497/$1,215]). Under the simulation, Person 1's expenditures increased 224 percent, reflecting the rapid increases in average prescription drug spending, while Person 2's increased only 14 percent, reflecting the slower increases in other types of health care spending. The degree of spending concentration in this two-person example has decreased.
12. I.S. Falk, M.C. Klem, and N. Sinai, The Incidence of Illness and Receipt of Medical Care among Representative Families (Chicago: University of Chicago Press, 1933),
13. as reported in Berk and Monheit, "The Concentration of Health Care Expenditures, Revisited."
14. Smith et al., "National Health Spending in 2004."