Out-of-Pocket Health Care Expenditures: A Comparison: An Examination of Aggregate Out-of-Pocket Health Care Expenditures from the CE, MEPS, and the NHEA for the 1996-2006 Period Indicates That Methodological Differences Account for the Lack of Agreement among Estimates

By Foster, Ann C. | Monthly Labor Review, February 2010 | Go to article overview

Out-of-Pocket Health Care Expenditures: A Comparison: An Examination of Aggregate Out-of-Pocket Health Care Expenditures from the CE, MEPS, and the NHEA for the 1996-2006 Period Indicates That Methodological Differences Account for the Lack of Agreement among Estimates


Foster, Ann C., Monthly Labor Review


Health care expenditure data produced by the Federal Government come from a variety of data sources, including the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CE), the household component of the Medical Expenditure Panel Survey (MEPS-HC) of the Department of Health and Human Services (DHHS) Agency for Healthcare Research and Quality, the National Health Expenditure Accounts (NHEA) of the DHHS Centers for Medicare and Medicaid Services, and the Personal Consumption Expenditures (PCE) of the Bureau of Economic Analysis (BEA). The purpose of this article is to examine annual aggregate CE, MEPS, and NHEA out-of-pocket health care expenditures for comparable categories from 1996 to 2006

to determine whether they are consistent across the three data sources. (1)

The CE collects information about out-of-pocket spending on health care and other expenses from consumer units (2) throughout the United States. The MEPS-HC collects nationwide data on the cost and use of health care and on health insurance coverage at the household and the individual level. (3) The NHEA are the official estimates of total health care spending in the United States. The NHEA measure aggregate annual expenditures for health care goods and services, public-health activities, program administration, and research and other investment related to health care, as well as the net cost of private insurance. The PCE measure the market value of health care and other goods and services purchased by the "personal sector" of the U.S. Census Bureau's National Income and Product Accounts. Data for the NHEA and the PCE are obtained from secondary sources. Although health insurance premiums are a major part of household health care spending, they will not be examined in this article because the MEPS data that were used did not provide the information needed for the research undertaken.

The first section of the article compares and contrasts the content and methodology of the CE, MEPS, and NHEA. The next section describes the methods to be used subsequently to carry out the comparison, including spending category alignment, population adjustment, and expenditure computation. Then, the relevant findings from the analysis are presented and examined, followed by conclusions and implications. (4)

Consumer Expenditure Survey

Conducted continuously since 1980, the CE has two components: a quarterly Interview Survey and a weekly Diary Survey. Each component queries an independent sample of consumer units designed to be representative of the U.S. civilian non-institutionalized population. (5) The CE collects information not just on health care expenditures, but on all spending components, including food, housing, apparel and services, transportation, and entertainment. Data are collected on an ongoing basis in 91 areas of the country.

CE data are used in various ways, one of which is in the periodic revision of the BLS Consumer Price Index (CPI). CE data form the basis of the selection of new market baskets of goods and services for the CPI, determine the relative importance of CPI components, and are used to derive new cost weights for the market baskets. (6)

CE data are collected by the U.S. Census Bureau under contract with the BLS. The Interview Survey is designed to collect spending information that usually can be remembered after 3 or more months. Included is information about fairly large expenditures, such as major appliances, and those which occur regularly, such as rent or health insurance premiums. Also included is information on expenses for reimbursements for medical care costs that are not collected in the Diary Survey. Interview Survey respondents are interviewed every 3 months for a total of five interviews. Information on spending (net of any reimbursements) is collected from respondents in the second through fifth interviews, by means of uniform questions. About 7,000 consumer units are interviewed each quarter. …

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Out-of-Pocket Health Care Expenditures: A Comparison: An Examination of Aggregate Out-of-Pocket Health Care Expenditures from the CE, MEPS, and the NHEA for the 1996-2006 Period Indicates That Methodological Differences Account for the Lack of Agreement among Estimates
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