The concentration and persistence in the level of health expenditures over time

Abstract

Estimates of the health care expenses of the U.S. civilian noninstitutionalized
(community) population are critical to policymakers and others concerned with
access to medical care and the cost and sources of payment for that care. In 2007, health care expenses among the U.S. community population totaled $1.13 trillion. Medical care expenses, however, are highly concentrated among a relatively small proportion of individuals in the community population. As previously reported in 1996, the top 1 percent of the U.S. population accounted for 28 percent of the total health care expenditures and the top 5 percent for more than half. More recent data have revealed that over time there has been some decrease in the extent of this concentration at the upper tail of the expenditure distribution. Using information from the Household Component of the Medical Expenditure Panel Survey (MEPS-HC) for 2006 and 2007, this report provides detailed estimates of the persistence in the level of health care expenditures over time. Studies that examine the persistence of high levels of expenditures over time are essential to help discern the factors most likely to drive health care spending and the characteristics of the individuals who incur them. The MEPS-HC data are particularly well suited for measuring trends in concentration and persistence. All differences between estimates discussed in the text are statistically significant at the 0.05 level unless otherwise noted.