A. Health Spending

 VI. Key Issues: Financing and Delivery >> A.  Health Spending

Topic Outline

 1. Health spending patterns
      a. Spending by function
      b. Spending by service
      c. Spending by age
      d. Spending by gender
      e. Spending by geographic area
      f. Spending by disease

2. Health spending trends
     a. Historical trends
     b. Projections

3. Avoidable health spending
4. Health cost containment
     a. Promote Competition
          1. Managed Competition
          2. Consumer-Directed H.C.
     b. Transparency
     c. Business Coalitions
     d. Promote Healthy Behavior
     e. Promote Efficient Use
          1. Improve Administration
          2.  Health IT
          3. Reduce Admin. Waste
          4. Manage Health Benefits
     f.  Improve Quality

Overview

Since 1964, the United States Department of Health and Human Services has published an annual series of data presenting total national health expenditures. These estimates, termed National Health Expenditure Accounts (NHEA), are compiled with the goal of measuring the total annual dollar amount of health care consumption in the United States, as well as the dollar amount invested in medical sector structures and equipment and non-commercial research to procure health services in the future. They differ from estimates of national health spending available through the Bureau of Economic Analysis National Income and Product and Accounts. Both of these are “top down” estimates of spending derived largely from aggregate estimates of spending by health sub-sectors (e.g., hospitals, nursing homes, physician offices). The U.S. also conducts an on-going household survey, the Medical Expenditure Survey, from which annual “bottoms-up” estimates of health spending can be derived based on extrapolating the estimates for individual households multiplied by the number of households in that category etc. This method produces a lower estimate of aggregate spending relative to the NHEA, but researchers have shown how to reconcile the two; in 2002, MEPS costs had to be inflated by a factor of 1.22 to match NHEA.

Analysis

• Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services. National Health Expenditure Accounts: Methodology Paper, 2010. Definitions, Sources, and Methods.
• Bureau of Economic Analysis. This report provides a complete discussion of a reconciliation between the National Health Expenditure Accounts and the National Income and Product Accounts.
• Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services. National Health Care Expenditures, 1960-2011. Table 1. Released in January 2013, 2011 is the latest year for which CMS has calculated actual health expenditures.
• Genworth Financial. Compare Cost of Care Across the United States. Use this map to view a state’s or region’s median cost of care by type of long term care
• Medicare Beneficiaries’ Out-of-Pocket Spending for Health Care (AARP: 2012)
• Paul B. Ginsburg, High and Rising Health Care Costs: Demystifying U.S. Health Care Spending, Robert Wood Johnson Foundation. The Synthesis Project, October 2008.
• Sing, M., T. Selden, et al., Reconciling Medical Expenditure Estimates from the MEPS and NHEA, 2002, Health Care Financing Review 28, no. 1 (2006): 25-40.
• Chapter 2 – Cost of Health Care (Alliance for Health Reform)
• Health Spending (Health Affairs topic page)

News

• Kaiser Health News. Health Costs.