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The acute hospital sector in selected OECD countries: an analysis of expenditure and utilization.

As the costliness of the acute hospital sector is of critical importance to the demands on the health sector as a whole, this paper presents an assessment of the trends in expenditure and utilization of this service area for selected OECD countries since the early 1980's. This analysis shows that despite reductions in bed availability and lengths of stay, admission rates and expenditures have generally been increasing over the period. As the continuing rise in expenditure levels is cause for growing concern at the individual country level, the reform of the financing of the acute hospital sector has become a more urgent priority.

European Union↗

Trends in nursing home expenditures: implications for aging policy.

Nursing home care has become a major governmental responsibility. Public expenditures for nursing home care amounted to $7.3 billion in 1977. They represented 57.2 percent of the $12.8 billion nursing home bill nationally and 12 percent of public spending on all personal health care. Nursing home care absorbs more than one-third of all Medicaid expenditures. This paper explores expenditure patterns in recent years and discusses some of the factors that will influence these patterns in the future. First we analyze recent trends over the five-year period ending 1977. Then we project future utilization based on current age-specific use rates. Finally, we review recent studies on the potential cost of savings of noninstitutional alternatives to nursing home care.

Aged↗

National health expenditures, 1981.

The United States spent an estimated $287 billion for health care in 1981 (Figure 1), an amount equal to 9.8 percent of the Gross National Product (GNP). Highlights of the figures that underly this estimate include the following: Health care expenditures continued to grow at a rapid rate in 1981, at a time when the economy as a whole exhibited sluggish growth. The 9.8 percent share of the GNP was a dramatic increase from the 8.9 percent share seen just two years earlier. Health care expenditures amounted to $1,225 per person in 1981 (Table 1). Of that amount, $524, or 42.7 percent, came from public funds. Hospital care accounted for 41.2 percent of total health care spending in 1981 (Table 2). These expenditures increased 17.5 percent from 1980, to a level of $118 billion. Spending for the services of physicians increased 16.9 percent to $55 billion--19.1 percent of all health care spending. Public sources provided 42.7 percent of the money spent on health in 1981, including Federal payments of $84 billion and $39 billion in State and local government funds (Table 3). All third parties combined--private health insurers, governments, private charities, and industry--financed 67.9 percent of the $255 billion in personal health care in 1981 (Table 4), covering 89.2 percent of hospital care services, 62.1 percent of physicians' services, and 41.3 percent of the remainder (Table 5). Direct patient payments for health care reached $82 billion in 1981, accounting for 32.1 percent of all personal health care expenses (Table 6). Consumers and their employers paid another $73 billion in premiums to private health insurers, $67 billion of which was returned in the form of benefits. Outlays for health care benefits by the Medicare and Medicaid programs totaled $73 billion, including $42 billion for hospital care. The two programs combined paid for 28.6 percent of all personal health care in the nation (Table 7).

Economics, Hospital↗

National health expenditure growth in the 1980's: an aging population, new technologies, and increasing competition.

Health care spending in the United States more than tripled between 1971 and 1981, increasing from $83 billion to $287 billion. This growth in health sector spending substantially outpaced overall growth in the economy, averaging 13.2 percent per year compared to 10.5 percent for the gross national product (GNP). By 1981, one out of every ten dollars of GNP was spent on health care, compared to one out of every thirteen dollars of GNP in 1971. If current trends continue and if present health care financing arrangements remain basically unchanged, national health expenditures are projected to reach approximately $756 billion in 1990 and consume roughly 12 percent of GNP. The focal issue in health care today is cost and cost increases. The outlook for the 1980's is for continued rapid growth but at a diminished rate. The primary force behind this moderating growth is projected lower inflation. However, real growth rates are also expected to moderate slightly. The chief factors influencing the growth of health expenditures in the eighties are expected to be aging of the population, new medical technologies, increasing competition, restrained public funding, growth in real income, increased health manpower, and a deceleration in economy-wide inflation. Managers, policy makers and providers in the health sector, as in all sectors, must include in today's decisions probable future trends. Inflation, economic shocks, and unanticipated outcomes of policies over the last decade have intensified the need for periodic assessments of individual industries and their relationship to the macro economy. This article provides such an assessment for the health care industry. Baseline current-law projections of national health expenditures are made to 1990.

Costs and Cost Analysis↗

Personal health care expenditures by state, selected years 1966-1978.

In 1966, spending for personal health care in the U.S. was $39 billion. By 1978, these expenditures had grown to $166 billion. Among regions and states, different patterns and levels of spending emerged, along with different rates of growth. Some of the highlights from the accompanying report which pinpoint personal health care spending differences among regions and states are listed below. In 1978, $745 per person was spent for personal health care services within the U.S. Massachusetts led the nation in spending with $935 per person. The lowest spending for personal health--$521 per capita--occurred in South Carolina. Expenditures for hospital care ranged from a high of $490 per capita in Massachusetts to a low of $197 per capita in Idaho, with the U.S. expenditure level at $337 per person.

Demography↗

Health care expenditures for major diseases in 1980.

Health care expenditures in the United States were 10.5 percent of the gross national product in 1982, and growing rapidly. The magnitude and continuing growth make health care costs an important issue in public policy. Knowledge of costs for specific diseases is necessary for ascertaining the effectiveness and efficiency of various health programs. In this article, medical care expenditures for major diseases are estimated from readily available data and it is shown that expenditures for more specific disease categories can be derived.

Age Factors↗

Data collection frequency effect in the National Medical Care Expenditure Survey.

The National Medical Care Expenditure Survey (NMCES) was characterized by a longitudinal survey design, with data collection targeted to five points in time covering the survey year. Field conditions did not allow for all interviews to be conducted over the targeted time periods. A subset of sampled households (holdovers) were not contacted for a particular wave of the survey and data were gathered at the subsequent time period for the two time intervals that were spanned. National estimates for a representative set of health care utilization and expenditure measures were derived from the sample of holdovers and compared with estimates derived from the respondents with five complete waves of data collection. Controlling for relevant predispositional factors in the estimation of health care utilization and expenditure measures, a test for data collection frequency effect is also considered.

Data Collection↗

Longitudinal patterns of enrollment and expenditures for a Medicaid cohort.

This article is based on 4 years of data for a cohort of Medicaid enrollees in California and Georgia to determine patterns of enrollment and expenditures. The analyses were developed from the statistical system known as Tape-to-Tape, which is based on Medicaid enrollment and claims files from these and other States. The composition of the cohort changed over times as a result of the differential rates of turnover for subgroups of the Medicaid population. Longitudinal expenditure patterns also varied by health service and eligibility group. These Medicaid expenditure patterns differed from those observed previously in Medicare studies, undoubtedly reflecting differences in service coverage under Medicare and Medicaid.

Adult↗

National health expenditures, 1987.

The 1987 national health expenditure estimates are examined from different perspectives in the following two articles. In the first article, revised expenditure estimates for 1984-87 are presented. A breakdown of the type of services and products purchased is included, as well as the source of funds used to finance health care. In the second article, health care expenditure estimates are used to explore marginal analysis as a policy tool for understanding health spending in relation to our Nation's ability to finance that spending. The concept of marginal analysis is also used to examine selected periods that were relevant to health policy and the timing of public and private changes in health policy in the past.

Health Expenditures↗

Utilization and expenditures for ambulatory medical care by people hospitalized: United States, 1980.

The National Medical Care Utilization and Expenditure Survey was conducted throughout 1980 to collect information on health, access to and use of medical services, associated charges and sources of payment, and health insurance coverage. The survey was based on a probability sample of about 6,600 households and 17,123 people representative of the civilian noninstitutionalized population of the United States. This report is one of a series of descriptive reports based on data from the National Medical Care Utilization and Expenditure Survey. It characterizes the population by hospital utilization and certain sociodemographic and health variables, and shows how hospitalization effects the use and cost of ambulatory medical care. The following are some of the highlights of the report. Almost everyone was covered by some form of health insurance at some time during 1980. Only 7.6 percent were not covered at all, and 10 percent had insurance only part of the year. The proportion not covered at all varied according to the number of times hospitalized, ranging from 8.2 percent for people not hospitalized during the year to 1.8 percent for people hospitalized three or more times. People with one or more hospital stays during 1980 had a physician visit rate greater than three times that for people not hospitalized. Similarly, the expenditures for ambulatory medical care for people experiencing hospitalizations was almost nine times that for people were not hospitalized during the year. The rate of physician visits is much larger immediately prior to hospital admission or immediately after discharge than it is at other times. About 40 percent of all physician visits during the year occurred within a month before admission and after discharge. within a month before admission and after discharge.

Age Factors↗

Outpatient prescription drug utilization and expenditure patterns of noninstitutionalized aged Medicare beneficiaries.

The goal of the National Medical Care Utilization and Expenditure Survey (NMCUES) of 1980 was to improve the understanding of the ways in which Americans use and pay for health care. This report is one in a series of descriptive reports based on NMCUES data. This report provides data regarding prescription drugs obtained on an outpatient basis by noninstitutionalized elderly people who reported being covered by Medicare in 1980. The results presented are based on NMCUES data collected about the civilian noninstitutionalized persons in the NMCUES national household sample who at any time during the survey year of 1980: (1) were 65 years of age or over, and (2) reported having been covered by Medicare hospital insurance (HI) or Medicare supplementary medical insurance (SMI) or both. These results include the number of prescriptions obtained during the survey year, the total charges for these prescriptions, the amounts paid by various sources, and the types of drugs obtained. Noninstitutionalized aged Medicare beneficiaries obtained an estimated 288 million prescriptions during 1980 and spent an estimated $2.3 billion for prescription drugs. Four of five beneficiaries used prescription drugs during the year. Although aged Medicare beneficiaries represented only 10.9 percent of the U.S. population during 1980, they accounted for 28.6 percent of all prescriptions and 30.2 percent of total prescription drug charges. The average aged beneficiary during the year purchased 12.1 prescriptions and incurred $98 of expenditures, about three times the average of those under 65 years of age. The average charge per prescription was $8.05. Prescription drug charges accounted for 5.5 percent of an estimated $42 billion spent by aged Medicare beneficiaries for health care during 1980, excluding charges for institutional care. Prescription drug use and expenditures were lower among people 65-69 years of age than among people 70-74 or 75-79 years of age. On average, women used more prescriptions and incurred higher charges than did men. Regionally, the average number of prescriptions that were filled per beneficiary was highest in the South and lowest in the West. People who perceived their health status to be poor had approximately four times as many prescriptions filled per person and incurred four times the average annual charge of people who perceived their health status to be excellent. Approximately 68 percent of the total dollars spent by aged Medicare beneficiaries for prescription drugs was paid out-of-pocket, 13.9 percent was paid by private health insurance, and 10.8 percent was paid by Medicaid. The remaining charges were distributed among other payers.(ABSTRACT TRUNCATED AT 400 WORDS)

Aged↗

Medicaid expenditures for the disabled under a work incentive program.

Congress enacted Section 1619 of the Social Security Act to enable the disabled receiving Supplemental Security Income (SSI) to obtain jobs and still retain Medicaid health benefits. Congress intended this work incentive to remove the fear of the severely disabled that by obtaining employment they would lose Medicaid benefits. Based on data from 11 States, our analysis found that Medicaid expenditures for Section 1619 enrollees were relatively small and only one-half the average Medicaid expenditure for the disabled. Retaining Medicaid appears to provide a significant work incentive because Medicaid expenditures represent 13 percent of Section 1619 enrollees' earnings.

Data Collection↗

State maternal and child expenditures and low birthweight infants: a descriptive analysis.

This study examines the relationship over time between state public health spending for maternal and child health and rates of low birthweight infants. Using expenditure data from the Public Health Foundation and National Center for Health Statistics, we compare the 10 states with the highest and lowest rates of low birthweight infants in 1980 and the 10 states with the most improved and least improved low birthweight rates over a 10-year period. We hypothesize that the 10 states with the best low birthweight rates and 10 states with the most improvement in low birthweight rates will be the states with the highest levels of maternal and child health expenditures per birth. We find no support for the hypothesis in either group of states. At the state level, maternal and child public health expenditures do not appear correlated with states that are the most successful or are making the most improvement in low birthweight infants.

Financing, Government↗

Impact of health system factors on changes in human resource and expenditures levels in OECD countries.

In order to gain further insight into the system factors responsible for changes in the health workforce, this study undertook an empirical examination of the determinants of the size of the health workforce and overall health expenditures across fifteen OECD countries. Specifically, using the latest release of OECD data, the analysis estimated and evaluated the effects of variables such as the proportion of female physicians and the elderly, expenditures on ambulatory care, enrollment levels in training programs, level of public financing, and per capita income on the size of the health workforce and level of health spending between 1970-1991. The findings of this study help to place the problem of the changing health workforce within the context of the complexity of health systems. It confirms any understanding of what accounts for changes in the size of the health labor force and expenditures require disentangling the effects of variables which needs to be taken into account when considering health system reforms.

Australia↗

State health expenditure accounts: purposes, priorities, and procedures.

This article reports on the State Health Expenditure Account (SHEA) project which developed procedures States can use in tracking their health care expenditures. The purposes, priorities, and concepts of SHEAs were designed to meet the needs of State policymakers. The resulting methods are discussed and illustrated using calculations of SHEAs for California. Contrasts with the National Health Expenditure (NHE) framework are provided. Recommendations for cooperation between the Health Care Financing Administration (HCFA) and the States that would facilitate the adoption and estimation of SHEAs are offered. Details of the methods used for the California estimates can be found in the Technical Note of this article.

Accounting↗

Effects of the Medicare Alzheimer's disease demonstration on Medicare expenditures.

Applicants were randomized either into a group with a limited Medicare community care service benefit and case management or into a control group receiving their regular medical care. Analyses assess whether or not community care management affected health care use. A tendency toward reduced expenditures was observed for the treatment group, combining all demonstration sites, and when observing each separately. These differences were or approached statistical significance in two sites for Medicare Part A and Parts A and B expenditures averaged over 3 years. Expenditure reductions approached budget neutrality with program costs in two sites.

Adult↗

Social welfare expenditures under public programs, fiscal year 1977.

Social welfare expenditures under public programs reached $362.3 billion in fiscal year 1977, which covered the 12-month period from October 1, 1976, to September 30, 1977. This figure was about $30 billion higher than the $331.9 billion spent in fiscal year 1976 (July 1, 1975, through June 30, 1976) and represented a 9-percent increase. When adjusted for price and population changes, real per capita expenditures rose from $1,623 in fiscal year 1976 to $1,646 in 1977, reflecting a 1-percent real increase in per capita spending under these programs. Social welfare expenditures as a proportion of the Nation's gross national product dropped slightly from 20.4 percent in fiscal year 1976 to 19.7 percent in 1977. The decline resulted from lower rates of growth during 1977 in most of the major social welfare categories and a higher rate of growth in the gross national product.

Financing, Government↗

[What explains the growth of national insurance expenditure for primary health care?].

BACKGROUND: Fee-for-item payments are the main source of remuneration for primary care physicians in Norway. Physicians receive a major part of these payments from the National Insurance Administration. The present study describes the development in the National Insurance Administration expenditure for primary physician services in Norway from 1990 to 2000. MATERIAL AND METHODS: The analyses were performed on accounting data from the National Insurance Administration and data on the number of physician per 10,000 population from Statistics Norway. RESULTS: From 1990 to 2000, expenditure increased by 84%, from NOK 863.8 million to NOK 1.58 billion. Our main finding is that a substantial part of this increase can be explained by increases in the number of primary care physicians, population size, and the level of fees. INTERPRETATION: One interpretation of our findings is that National Insurance Administration expenditure on primary physician services to some extent can be controlled by regulating the number of physicians practicing with reimbursement from the National Insurance Administration and the level of fees.

Fee-for-Service Plans↗