An Unhealthy America: The Economic Burden of ... - Milken Institute

An Unhealthy AmericaMilken InstituteI: The Historical Direct Costs Of Chronic DiseaseThis study uses expenditure information from the Medical Expenditure Panel Survey (MEPS) to estimate the historicaldirect costs, or treatment expenditures, of the disease categories under review. The MEPS surveys, launched in 1996 bythe federal Agency for Healthcare Research and Quality (AHRQ), collect national (census-based) data on specific services,the frequency of service, and expenditure information for chronic disease. The surveys do not cover institutionalizedpopulations, i.e., those in nursing homes, prisons, the military, or under other supervised care. Nonetheless, MEPS is theonly data source for annual medical expenditures by disease and site of service. And because the data are comparableto those from earlier medical expenditure surveys, it is possible to analyze historical trends in treatment costs. We useMEPS data from 1996 through 2003.MEPS survey data comprise two major components: a Household Component (or HC, derived from respondingindividuals and families) and an Insurance (employer-derived) Component. We do not include two additionalcomponents: a supplemental medical provider component and a nursing home component, available only for 1996.The Household Component is particularly relevant because each year it resurveys a sub-sample of participants from theprevious year’s National Health Information Survey (NHIS). The component includes demographic characteristics,medical conditions, health status, and the use of medical services (known as “individual events”) by site of service formore than 30,000 people each year. These statistics can be used to project estimates for the civilian—non-institutionalizedpopulation by adjusting various factors to reflect nationally representative totals.MEPS also provides summary tables of Population Reporting a Condition (PRC) totals and treatment expenditures forsixty chronic conditions. Six of the disease categories examined here—heart conditions; pulmonary conditions;hypertension; diabetes; stroke, and mental disorders—are covered by those tables. But the remaining five, all cancers,are not. To obtain PRC equivalents and treatment expenditures for these—breast, colon, lung, prostate, and “other”cancers—we use the “individual events” totals by site of service. Sites of service include hospitals stays, emergencyroom visits, pharmacies, and outpatient clinics; we exclude home health-care costs. 1For the five cancer types, we adjust the PRC-equivalent figures and treatment expenditures across the four census-basedMEPS regions. This involves accounting for outliers (values that differ significantly from the majority), which we do bylooking at a share of a specific cancer PRC relative to the total PRC figures and expenditure for all cancer types in thatregion. If the share difference is larger than 10 percent for expenditures and 5 percent for PRC, then the data point isadjusted, but not excluded. The process allows us to adjust the regional totals back to the MEPS national total.In order to obtain representative historical trends for the five cancers, it is necessary to account for time-series outliersas well. Thus, we compare each year’s share of expenditures and PRC totals for a specific cancer to overall cancer typeswith the eight-year (1996–2003) average, adjust the data points, and scale to match the MEPS U.S. total.As a last step, a three-year moving average is applied to all the disease categories. Once we have sums that are bothhistorically representative and disease-specific, we can allocate both data sets, treatment costs and PRC, to the fiftystates. A complete methodology is available online at www.chronicdiseaseimpact.com.1. Home health-care costs are not included because this data file does not provide specific disease information. Instead,we use the medical condition data file to identify specific disease categories within the file for disease-specific homehealth-care costs.[ 38 ]