Abstract
I construct a disease-based medical expenditure index for Medicare Advantage (private plan) enrollees using data from the Medicare Current Beneficiary Survey from 2001 to 2009. I create the indexes by modeling total health-care expenditure as a function of each respondent’s diagnoses. Total medical inflation for this population is found to be 5.7 percent annually. By comparison, medical inflation in the Medicare fee-for-service (FFS) population is 4.5 percent annually. The difference is partly due to differential reporting of drug and nondrug spending in the MCBS for FFS beneficiaries; once this is corrected for, inflation among FFS beneficiaries is 5.0 percent. The remaining difference results from drug spending increasingly more rapidly among Medicare Advantage enrollees. I show that the introduction of Part D accounts for much of, and possibly all the remaining gap in inflation.
Acknowledgments:
I would like to thank Tina Highfill for outstanding research assistance and would also like to thank the following people for helpful comments and advice: Ana Aizcorbe, Ernie Berndt, Michael Chernew, David Cutler, Abe Dunn, Joe Newhouse, Allison Rosen, and two anonymous referees. The views expressed in this paper are solely those of the authors and do not necessarily reflect the views of the Bureau of Economic Analysis.
Appendix
List of Medical Conditions and Associated MCBS Questionnaire Variables.
Medical conditions | Community interview variable | Facility interview variable |
---|---|---|
Hardening of arteries/arteriosclerotic heart disease | OCARTERY | ASHD |
Hypertension | D_HBP | HYPETENS |
Hypercholesterolemia (2009 only) | D_CHOLES | n/a |
Myocardial infarction/Heart attack | D_MYOCAR | MYOCARD and must have inpatient event in past year |
Angina/CHD | D_CHD | CRDVTYPE |
Other heart conditions, valve problem | D_OTHHRT or D_VALVE | CARDIOV and CRDVTYPE=“NO” |
Congestive heart failure | D_CFAIL | HRTFAIL |
Heart rhythm problem | D_RHYTHM | CARDDYSR |
Stroke/transient ischemic attack (TIA) | D_STROKE | STROKE or TIA |
Cancer | D_CSKIN or D_CANCER and one or more of (OCCLUNG, OCCCOLON, OCCBREST, OCCPROST, OCCOVARY, OCCSTOM, OCCCERVX, OCCKIDNY, OCCBRAIN, OCCTHROA, OCCBACK, OCCHEAD, OCCFONEC, OCCBLAD, OCCUTER, OCCOTHER) | CNRSKIN or CNRLUNG or CNRBOWEL or CNRBREAS or CNRPROST or CNROVARY or CNRCERVI or CNRSTOMA or CNRBLADD or CNRUTERU or CNROTHER |
Diabetes | OCDIABTS | DIABMEL |
Arthritis | OCARTHRH or D_ARTHRD | ARTHRIT |
Mental/psychiatric disorder | D_PSYCH | ANXIETY or DEPRESS or MANICDEP or SCHIZOPH |
Alzheimer’s/dementia | OCALZHMR | ALZHMR or DEMENT |
Osteoporosis | OCOSTEOP | OSTEOP |
Broken hip | D_BRKHIP | HIPFRACT |
Parkinson’s | OCPARKIN | PARKNSON |
Emphysema/asthma/chronic obstructive pulmonary disease (COPD) | OCEMPHYS | EMPCOPD or ASTHMA |
Paralysis in past year | D_PPARAL | HEMIPLPA or PARAPLEG or QUADPLEG |
Probit Model of Hypercholesterolemia among Medicare Advantage Enrollees in the 2009 MCBS Community Survey.
Respondent reports having been diagnosed with hypercholesterolemia | |
---|---|
Respondent reports having been diagnosed with: | |
Hardening of arteries/arteriosclerotic heart disease | 0.221*** |
(0.00229) | |
Hypertension | 0.663*** |
(0.00137) | |
Myocardial infarction | 0.360*** |
(0.00537) | |
Angina/Coronary heart disease | 0.456*** |
(0.00464) | |
Other heart conditions, valve problem | 0.255*** |
(0.00322) | |
Congestive heart failure | –0.635*** |
(0.00500) | |
Heart rhythm problem | 0.139*** |
(0.00306) | |
Stroke/transient ischemic attack | 0.285*** |
(0.00492) | |
Skin cancer | 0.174*** |
(0.00271) | |
Lung cancer | –0.0814*** |
(0.0140) | |
Colon cancer | –0.0729*** |
(0.00696) | |
Breast cancer | 0.442*** |
(0.00766) | |
Prostate cancer | 0.434*** |
(0.00744) | |
Other cancer | 0.156*** |
(0.00451) | |
Diabetes | –0.125*** |
(0.00147) | |
Arthritis | –0.0379*** |
(0.00170) | |
Mental/psychiatric disorder (excl. Alzheimer’s/dementia) | –0.0648*** |
(0.00211) | |
Alzheimer’s/dementia | 0.189*** |
(0.00352) | |
Osteoporosis | –0.0672*** |
(0.00183) | |
Broken hip | 0.301*** |
(0.0106) | |
Parkinson’s disease | –0.0562*** |
(0.00581) | |
Emphysema/asthma/chronic obstructive pulmonary disorder | 0.108*** |
(0.00179) | |
Paralysis in past year | –0.840*** |
(0.00723) | |
Lost a limb | 0.359*** |
(0.00983) | |
Mental retardation | 1.105*** |
(0.0125) | |
Renal failure | –1.873*** |
(0.0110) | |
Obesity | –0.227*** |
(0.00157) | |
Age | 0.147*** |
(0.00189) | |
Age squared | –0.00102*** |
(1.23e-05) | |
Female | 0.254*** |
(0.00147) | |
Race: American Indian | 0.278*** |
(0.0117) | |
Race: Asian or Pacific Islander | 1.019*** |
(0.00638) | |
Race: Black | 0.0724*** |
(0.00223) | |
Race: Don’t know/more than one | –0.0127*** |
(0.00357) | |
Ethnicity: Hispanic | 0.355*** |
(0.00273) | |
Education: Less than high school graduate | –0.0693*** |
(0.00172) | |
Education: College graduate | –0.0282*** |
(0.00194) | |
Log of income | 0.00634*** |
(0.000736) | |
Smoker | 0.287*** |
(0.00247) | |
Reports health to be “excellent”, “very good” or “good” | –0.196*** |
(0.00188) | |
Census division: South Atlantic | –0.199*** |
(0.00525) | |
Census division: Middle Atlantic | –0.116*** |
(0.00527) | |
Census division: East North Central | –0.472*** |
(0.00533) | |
Census division: West North Central | –0.321*** |
(0.00571) | |
Census division: New England | –0.110*** |
(0.00631) | |
Census division: East South Central | –0.0382*** |
(0.00636) | |
Census division: West South Central | –0.689*** |
(0.00543) | |
Census division: Mountain | –0.457*** |
(0.00530) | |
Census division: Pacific | –0.448*** |
(0.00515) | |
Constant | –4.774*** |
(0.0727) | |
Observations | 1063 |
Standard errors in parentheses. Regression is weighted with MCBS survey weights. ***p<0.01, **p<0.05, *p<0.1.
Regression Output of GLM of Spending as Function of Diagnoses.
2001–2003 | 2004–2006 | 2007–2009 | |
---|---|---|---|
Hardening of arteries/arteriosclerotic heart disease | 1943*** | 937.6* | 1615*** |
(624.6) | (517.6) | (619.0) | |
Hypertension | 281.9 | 953.9*** | 961.1*** |
(268.0) | (293.3) | (258.1) | |
Myocardial infarction | 3423* | 5377** | 3596* |
(1797) | (2372) | (1897) | |
Angina/Coronary heart disease | 1065 | 550.8 | 3878** |
(1315) | (1052) | (1721) | |
Other heart conditions, valve problem | 887.5 | 3093*** | 2813** |
(861.0) | (990.0) | (1125) | |
Congestive heart failure | 6219** | 2528 | 4592** |
(2475) | (1875) | (1996) | |
Heart rhythm problem | 3436*** | 3356*** | 4045*** |
(1026) | (939.9) | (967.0) | |
Stroke/transient ischemic attack | 5806*** | 4097** | 3372** |
(2175) | (1824) | (1495) | |
Diabetes | 1352*** | 2118*** | 1159*** |
(349.2) | (349.0) | (298.7) | |
Arthritis | 1194*** | 726.6** | 481.6 |
(306.1) | (295.2) | (321.2) | |
Mental/psychiatric disorder (excl. Alzheimer’s/dementia) | 455.5 | 1775*** | 2317*** |
(573.3) | (646.7) | (592.9) | |
Alzheimer’s/dementia | 680.5 | 1774* | 2267** |
(847.7) | (956.9) | (940.6) | |
Osteoporosis | 645.1** | 1370*** | 1036*** |
(308.1) | (311.5) | (313.3) | |
Broken hip | 6752* | 2414 | 12,246** |
(4090) | (2319) | (5844) | |
Parkinson’s disease | 2303 | 7702*** | 2784 |
(1842) | (2868) | (1708) | |
Emphysema/asthma/chronic obstructive pulmonary disorder | 1158*** | 3248*** | 1898*** |
(419.9) | (538.8) | (422.0) | |
Paralysis in past year | 3440 | 1449 | 3009 |
(2741) | (2215) | (2255) | |
Lost a limb | 1907 | 4800* | –235.4 |
(2201) | (2760) | (1457) | |
High cholesterol | 1567 | 562.5 | 1046** |
(1053) | (877.8) | (492.2) | |
Cancer | 3010*** | 2368*** | 2569*** |
(734.2) | (629.8) | (609.3) | |
Constant | 1637*** | 2115*** | 2975*** |
(501.9) | (459.6) | (304.8) | |
Observations | 4586 | 4523 | 6401 |
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Articles in the same Issue
- Frontmatter
- Articles
- Public Provision and Cross-Border Health Care
- Physician Self-Referral of Physical Therapy Services for Patients with Low Back Pain: Implications for Use, Types of Treatments Received and Expenditures
- The ACA: Impacts on Health, Access, and Employment
- Estimating Regression-Based Medical Care Expenditure Indexes for Medicare Advantage Enrollees
- Evidence of Inefficiencies in Practice Patterns: Regional Variation in Medicare Medical and Drug Spending
- The Impact of Delayed Hepatitis C Viral Load Suppression on Patient Risk: Historical Evidence from the Veterans Administration