Equity in the Finance and Delivery of Health Care in the United States

Slide Presentation from the AHRQ 2008 Annual Conference

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On September 9, 2008, Thomas M. Selden, made this presentation at the 2008 Annual Conference. Select to access the PowerPoint® presentation (210 KB).

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Slide 1

Equity in the Finance and Delivery of Health Care in the United States

Thomas M. Selden
Agency for Healthcare Research and Quality (AHRQ)

Slide 2

Overview

• U.S. health care in 2008:
  • Over 16 percent of Gross Domestic Product (GDP) ($2.4T)
  • Complex public/private system:
    • Tax-financed (Medicaid, Department of Veterans' Affairs [VA], safety net)
    • Social insurance (Medicare & Workers' Compensation [WC])
    • ESI (partially subsidized) & nongroup
    • >40M without coverage
    • Uncompensated care
• Overall equity studies for U.S.:
  • Wagstaff et al. (1987 data)
  • Gottschalk & Wolfe (1980/81 data)

Slide 3

Objectives

• Assess equity in financing:
  • Share of income paid by bottom deciles
  • Progressivity indices
• Assess equity in delivery:
  • Nonparametric standardization for need

Slide 4

Data

• Pooled 2002&2003 Medical Expenditure Panel Survey (MEPS):
  • Civilian noninstitutionalized
• Aligned with:
  • 2002 National Health Expenditure Accounts (NHEA) (Selden & Sing, 2008)
  • Brookings-Urban (highest incomes)
  • MEPS Insurance Component (MEPS-IC) (employer premiums)
• NBER TAXSIM
• Fed, St, Local budgetary data

Slide 5

Public/Private Mix

The slide shows two pie charts.

• Pie Chart showing with Subsidies:
  • Income Tax: 26%
  • Indirect Tax: 14%
  • Social Ins.: 16%
  • Premiums: 30%
  • Out-of-pocket (OOP): 13%
  • Misc.: 1%
• Pie Chart showing without Subsidies:
  • Note: The percentages are not shown; based on the percentages from the pie chart with subsidies
  • Income Tax: Less than 26%
  • Indirect Tax: Less than 14%
  • Social Ins.: Less than 16%
  • Premiums: More than 30%
  • OOP: Approximately the same at 13%
  • Misc.: Approximately the same at 1%

Slide 6

Distribution of Income and Payments by Type, 2002

The line graph shows that as the deciles of population increase, the cumulative shares for income gradually grows.

Slide 7

Distribution of Income and Payments by Type, 2002

The line graph shows that as the deciles of population increase, the cumulative shares for both Income and Inc Tax gradually increase.

Slide 8

Distribution of Income and Payments by Type, 2002

The line graph shows that as the deciles of population increase, the cumulative shares for Income, Inc Tax, and Social Ins gradually increase, whereas, Prem And OOP grow at a faster and more steady pace.

Slide 9

Distribution of Income and Payments by Type, 2002

The line graph shows that as the deciles of population increase, the cumulative shares for Inc Tax increase the slowest, Income, Social Ins, and Total increase at a gradual pace, and Prem and OOP increase the fastest.

Slide 10

Summary Measures

• Conc = 2*(area btw 45° and Lorenz)
• Kakwani = ConcPAYMENT - ConcINCOME
  • "Regressive" if K<0

Slide 11

Finance Equity: Summary Measures

• Regressive in 2002:
  • K = -0.098
• Less regressive than in the past:
  • K81 = -0.145
  • K87 = -0.130
• Reasons:
  • Income more concentrated, but...
  • Taxes even more concentrated
  • Increasing public share

Slide 12

Less Regressive, but Large Burdens for Low-Income Families

The bar graph measures the percentage of pre-tax income for OOP, Premiums, Soc Ins, Other Tax, and Inc Tax in ten deciles.

• All: 18%
• Deciles 1: 40%
• Deciles 2: 27%
• Deciles 3: 23%
• Deciles 4: 22%
• Deciles 5: 21%
• Deciles 6: 20%
• Deciles 7: 19%
• Deciles 8: 18%
• Deciles 9: 17%
• Deciles 10: 15%

Slide 13

Financing Equity: Conclusions

• Less regressive over time:
  • Comparisons a bit tricky.
• Health care rising share of personal income.
• Large shares of income paid by poor.

Slide 14

Equity in Delivery

• Widely-accepted approach:
  • Standardize "needs" with linear regression
• Alternative approach:
  • Controlled reweighting
  • Equalize distribution of need
    • Age, sex, SAH, conditions, disability
  • Preserve dist of other variables
    • Race/ethnicity
    • Insurance coverage

Slide 15

Distribution of Medical Care (Total Expenditures)

The line graph shows total expenditures for 2002 starting at a high for Unadjusted in the early deciles, but lowering quickly and leveling out by the mid deciles.

Slide 16

Distribution of Medical Care (Total Expenditures)

The line graph shows total expenditures for 2002 starting at a mid range for Linear, Uncont RW, and Cont RW as opposed to Unadjusted which started at a high. However, as Unadjusted lowered and leveled out by the mid deciles, the others lowered quickly, then made a steady increase by the mid deciles and continued to rise.

Slide 17

Delivery Equity: Conclusions

• Adjusted for needs, use rises with income.
• Linear and non/semi-parametric approaches yield very similar results.
• Similar results for office visit counts.
• Future: Other measures of use:
  • Charges vs expenditures
  • Other use measures

Slide 18

Conclusions

• Becoming less regressive.
• Large (probably growing) share of income for bottom deciles.
• Delivery tilted toward persons in higher deciles.
  • Similar results using new and conventional methods.

Current as of January 2009

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Internet Citation:

Equity in the Finance and Delivery of Health Care in the United States. Slide Presentation from the AHRQ 2008 Annual Conference (Text Version). January 2009. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/about/annualmtg08/090908slides/Selden.htm

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