Categorization of National Health Spending

By April 12, 2017Commentary

We spend a lot of money on health care in our country.  A number of analyses try to figure out where it all goes.  The latest is one in a series of AHRQ statistical briefs based on the Medical Expenditure Panel Survey.   (AHRQ Stat. Brief)   The Brief uses 2013 data on the non-institutionalized population, which showed that an estimated $1.4 trillion was incurred for health care spending on this group.  Hospital inpatient spending was the 28% of the total, ambulatory care from physicians and other clinicians represented 38% and prescription drugs were 22%, a higher proportion than reported in some other studies.  Rounding out the spending were dental services at 6.6% and home health, equipment and miscellaneous services at 5.7%.  The elderly had equal spending on inpatient and outpatient services, around 32%, while under-65s saw 26% of total spending go to inpatient and 41% to ambulatory.  Under 65s spent about twice as much on dental care compared to the older group.  Prescription drug spending was surprisingly similar between the two age groups.  Home health care accounted for much more of the older group’s spending.

Private insurance covered 41% of total spending, Medicare paid 25%, Medicaid was responsible for 12%, patients paid 14% out-of-pocket and other sources, like the Defense Department, 8%.  Private insurance covered about 54% of all spending for persons under 65, but only 13% for those over 65.  Medicare covered 64% of health spending by the over 65 group, which seems low, but there is some private insurance and Medicaid coverage for this group and there can be significant out-of-pocket spending.  Under 65s spent slightly more out-of-pocket than did the elderly.  For those under 65 with no insurance, outpatient services were 43% of the total, inpatient 275 and drugs 22%.  For those with private coverage, inpatient was 24%, outpatient 43% and drugs 20%.  For those in this age group with public coverage, inpatient was 31%, outpatient 31% and drugs 27%.  For the over-65s, patients with Medicare only had 39% hospital inpatient spending, 28% outpatient and 22.5% medications, while those with Medicare and private coverage saw only 29% spending on inpatient, 37% on ambulatory and 22% on drugs.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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