The concentration of health care expenditures and related expenses for costly medical conditions, 2012

Abstract

Estimates of health care expenses for 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 2012, health care expenses among the U.S. community population totaled $1.35 trillion. Medical care expenses, however, are highly concentrated among a relatively small proportion of individuals in the community population. As reported previously 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. Furthermore, medical expenditures have been concentrated for the treatment of certain types of highly prevalent conditions or for which treatment often entails the use of high cost services. Using information from the Household Component of the Medical Expenditure Panel Survey (MEPS-HC) for 2012, this report provides detailed estimates of the concentration of health care expenditures further examined by costs associated with care in treating the most costly medical conditions. Studies that examine the concentration of high levels of expenditures 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 the concentration of health care expenditures and the cost of care associated with medical conditions. This Brief compares the health care spending for the overall population with the expenses for the top 5 percent of the population based on spending in 2012. All differences between estimates discussed in the text are statistically significant at the 0.05 level unless otherwise noted.