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STATISTICAL BRIEF #540:
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Emily M. Mitchell, PhD
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Highlights
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IntroductionData from the Medical Expenditure Panel Survey (MEPS) indicate that in 2019, spending on healthcare for the U.S. civilian noninstitutionalized population surpassed $2 trillion, yet the majority of this spending was concentrated in a small percentage of the population. About 14 percent of the U.S. population had no personal healthcare expenditures in 2019, while 5 percent accounted for nearly half of healthcare spending. This spending includes all sources of payment for medical care, including payments by private insurance, Medicare, Medicaid, out-of-pocket spending, and other sources.In this Statistical Brief, data from the Agency for Healthcare Research and Quality's Medical Expenditure Panel Survey Household Component (MEPS-HC) are used to describe the overall concentration of healthcare expenditures across the U.S. civilian noninstitutionalized population in 2019. The most commonly treated conditions among top spenders are identified, and the shares of spending by age groups, race/ethnicity, type of medical service, and source of payment are illustrated. All differences discussed in the text are statistically significant at the 0.05 level. |
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FindingsOverall (table 1, figures 1 and 2)In 2019, the top 1 percent of persons ranked by their healthcare expenditures accounted for 20.7 percent of total healthcare expenditures (100 minus 79.3 percent; figure 1), with an annual mean expenditure of $130,087 (figure 2). The group within the top 1 percent is defined as persons who spent $78,125 or more during the year. Cut points for additional percentile groups are shown in table 1. The top 5 percent of the population accounted for 48.8 percent of total expenditures (100 minus 51.2 percent), with an annual mean expenditure of $61,007. The bottom 50 percent accounted for only 3.0 percent of total healthcare expenditures. Every person in this group spent less than $1,313 during the year (table 1), with an average annual expenditure of $374 (figure 2). Table 1. Percentile of population ranked by spending and amount spent during the year
Health conditions (figure 3) The most commonly treated condition among the top 5 percent of spenders in 2019 was hypertension (46.2 percent), followed by osteoarthritis/other non-traumatic joint disorders (44.5 percent) and nervous system disorders (38.7 percent). In the overall population, the percentages of persons who received treatment for these conditions were only 18.6, 15.5, and 11.9, respectively. Other commonly treated conditions for persons in the top 5 percent of spenders include mental disorders; hyperlipidemia; heart disease; chronic obstructive pulmonary disease (COPD), asthma, and other respiratory conditions; and diabetes mellitus. Note that while these conditions are the most common among high spenders, they are not necessarily the most expensive conditions to treat. Rather, the top spending group is more likely to include persons with multiple chronic conditions or expensive treatments (e.g., surgeries, hospitalizations) related to these conditions. Age (figure 4) Older persons were disproportionately represented in the higher healthcare spending tiers. In 2019, persons 65 and older constituted 16.7 percent of the U.S. civilian noninstitutionalized population, while 22.6 percent were under age 18. Among the top 5 percent of spenders, however, 40.5 percent were 65 and older, while only 4.4 percent were under age 18. In contrast, among the bottom 50 percent of spenders, 30.7 percent were under age 18 while only 5.9 percent were 65 years and older. Race/ethnicity (figure 5) Whites were disproportionately represented among the top 50 percent of spenders, while Hispanics were underrepresented in this higher spending group. Whites comprised 59.7 percent of the U.S. civilian noninstitutionalized population in 2019 but accounted for 69.7 percent of the top half of spenders. Hispanics, on the other hand, comprised 18.5 percent of the population but only 12.2 percent of the top half of spenders. Type of service (figure 6) For persons in the bottom 50 percent of spenders, over half of their medical expenses were for ambulatory events (55.7 percent), while the proportion of spending on inpatient stays and home health expenses in this group was negligible (less than 0.3 percent of expenditures). Among the top 5 percent of spenders, 36.7 percent of their expenses were for inpatient stays. This comparatively high proportion of expenditures stems from a combination of the fact that persons in the top spending percentiles are much more likely to have at least one inpatient stay during the year, and inpatient stays tend to cost much more than other types of service. Source of payment (figure 7) Medicare and private insurance paid for over three-quarters of expenses for persons in the top 5 percent spending tier (Medicare: 31.3 percent; private insurance: 45.4 percent), while out-of-pocket payments comprised only 7.3 percent of expenses. For the bottom 50 percent of spenders, out-of-pocket payments accounted for just over a quarter of their expenditures (26.7 percent), while Medicare payments comprised only 5.0 percent of payments for this lower spending group. |
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Data SourceThe estimates shown in this Statistical Brief are based on data from the MEPS 2019 Full Year Consolidated File (HC-216). |
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DefinitionsAgeAge was defined as age at the end of the year 2019 (or on last date of MEPS eligibility if person was out of scope at the end of the year). Concentration curve A concentration curve is a graphical representation of the distribution of a variable of interest, such as income or expenditures, across the percentage of the population. The cumulative percentage of the population is represented along the X-axis and the cumulative percentage of expenditures is represented on the Y-axis. A point at the X-axis value of 50 percent and the Y-axis value of 3 percent, for instance, indicates that the bottom 50 percent of the population accounts for 3 percent of total spending, and conversely, the top 50 percent accounts for 97 percent of total spending. Similarly, a point at the X-axis value of 99 percent and the Y-axis value of 79 percent indicates that the bottom 99 percent of the population accounts for 79 percent of spending, and conversely, that the top 1 percent of the population accounts for 21 percent of expenditures. Expenditures Total expenditures were defined as the sum of payments from all sources to hospitals, physicians, other healthcare providers (including dental care), and pharmacies for services reported by respondents in the MEPS-HC. Health conditions The health conditions reported in this Statistical Brief were the most commonly treated conditions among high spenders and are not mutually exclusive. Persons were classified as treated for a particular condition if they had one or more healthcare events (i.e., office-based, hospital outpatient or emergency room visits, hospital inpatient stays, prescribed medicine purchases, or home healthcare) where the condition was reported as leading to or having been discovered during the event. Conditions reported by the household were coded into International Classification of Diseases, 10th Revision codes, which were then collapsed to Clinical Classifications Software Refined (CCSR) codes (see https://www.hcup-us.ahrq.gov/toolssoftware/ccsr/ccs_refined.jsp for details). Similar CCSR codes were further grouped into broader condition categories. The conditions discussed in this brief were defined as follows:
Percentiles Percentiles of spending were formed by ordering sampled persons by their total expenditures from highest to lowest, then allocating persons to groups based on weighted percentage of the population. Near the cut point of each percentile, a person was included in the higher percentile group if his or her added weight did not surpass the specified percentile. In the case of ties, where two or more people had the same expenditures close to a percentile cut point, the person with the lower weight was included in the higher percentile group. In this brief, the "bottom 50 percent" and "top 50 percent" are mutually exclusive, while the "top 50 percent," "top 30 percent," "top 10 percent," "top 5 percent," and "top 1 percent" are not. Race/ethnicity MEPS respondents were asked if each family member was Hispanic or Latino and about each member's race. Based on this information, categories of race and Hispanic origin were constructed as follows:
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About MEPSThe Medical Expenditure Panel Survey Household Component (MEPS-HC) collects nationally representative data on health care use, expenditures, sources of payment, and insurance coverage for the U.S. civilian noninstitutionalized population. The MEPS-HC is cosponsored by the Agency for Healthcare Research and Quality (AHRQ) and the National Center for Health Statistics (NCHS). More information about the MEPS-HC can be found on the MEPS Web site at https://www.meps.ahrq.gov/. |
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ReferencesThe following methodology reports contain information on the survey and sample designs for the MEPS-HC and MEPS Medical Provider Component. Data collected in these two components are jointly used to derive MEPS healthcare expenditure data.Cohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS Methodology Report No. 1. AHCPR Pub. No. 97-0026. 1997. Agency for Health Care Policy and Research (AHCPR), Rockville, MD. http://www.meps.ahrq.gov/mepsweb/data_files/publications/mr1/mr1.pdf Ezzati-Rice, T. M., Rohde, F., and Greenblatt, J. Sample Design of the Medical Expenditure Panel Survey Household Component, 1998-2007. Methodology Report No. 22. March 2008. Agency for Healthcare Research and Quality, Rockville, MD. http://www.meps.ahrq.gov/mepsweb/data_files/publications/mr22/mr22.pdf Machlin, S. R., Chowdhury, S. R., Ezzati-Rice, T., DiGaetano, R., Goksel, H., Wun, L.-M., Yu, W., and Kashihara, D. Estimation Procedures for the Medical Expenditure Panel Survey Household Component. Methodology Report #24. September 2010. Agency for Healthcare Research and Quality, Rockville, MD. https://www.meps.ahrq.gov/data_files/publications/mr24/mr24.shtml Stagnitti, M. N., Beauregard, K., and Solis, A. Design, Methods, and Field Results of the Medical Expenditure Panel Survey Medical Provider Component (MEPS MPC)—2006 Calendar Year Data. Methodology Report No. 23. November 2008. Agency for Healthcare Research and Quality, Rockville, MD. http://www.meps.ahrq.gov/mepsweb/data_files/publications/mr23/mr23.pdf |
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Suggested CitationMitchell, E. M. Concentration of Healthcare Expenditures and Selected Characteristics of Persons with High Expenses, U.S. Civilian Noninstitutionalized Population, 2019. Statistical Brief #540. February 2022. Agency for Healthcare Research and Quality, Rockville, MD. https://meps.ahrq.gov/data_files/publications/st540/stat540.shtmlAHRQ welcomes questions and comments from readers of this publication who are interested in obtaining more information about access, cost, use, financing, and quality of healthcare in the United States. We also invite you to tell us how you are using this Statistical Brief and other MEPS data and tools and to share suggestions on how MEPS products might be enhanced to further meet your needs. Please email us at MEPSProjectDirector@ahrq.hhs.gov or send a letter to the address below: Joel W. Cohen, PhD, Director Center for Financing, Access and Cost Trends Agency for Healthcare Research and Quality 5600 Fishers Lane, Mailstop 07W41A Rockville, MD 20857 |
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Figure 1. Concentration curve of health care expenditures, U.S. civilian noninstitutionalized population, 2019
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Figure 2. Mean total expenditure per person by percentile of spending, 2019
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Figure 3. Most commonly treated conditions among top 5% of spenders: Percentage of persons treated, 2019
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Figure 4. Percentage of persons by age group and percentile of spending, 2019
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Figure 5. Percentage of persons by race/ethnicity and percentile of spending, 2019
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Figure 6. Proportion of expenditures by type of service and spending percentile, 2019
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Figure 7. Proportion of expenditures by source of payment and spending percentile, 2019
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