medicare growth, technological advances, and the distribution of health care benefits jonathan...
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Medicare Growth, Technological Advances, and the Distribution of Health Care Benefits
Jonathan Skinner
Weiping Zhou
A Simple Question
Have the billions of health care dollars spent during the 1990s improved or
worsened inequality in health and well-being in the elderly population?
A Not So Simple Answer
Expenditures/utilization for health care: High income people get:
• Less (Battachyaria and Lakdawalla, 2003))
• More (Le Grand, 1982; McClellan and Skinner, 2003, Sanchez et. al., 1992).
A Not So Simple Answer
Improvements in Outcomes: High education / non-minority people get
• Less (McDermott, 1978)
• More ( (Glied and Lleras-Muney, 2003; Goldman and Smith, 2002; Lichtenberg and Lleras-Muney, 2002)
A Not So Simple Answer
Improvements in Outcomes: High education / non-minority people get
• Less (McDermott, 1978)
• More ( (Glied and Lleras-Muney, 2003; Goldman and Smith, 2002; Lichtenberg and Lleras-Muney, 2002)
How do you measure inequality in health or in full income anyway?
Our Strategy
• Expenditures: Fuchs proto-full income measure (Medicare expenditures plus adjusted CPS income) – Data sources: Current Medicare History Survey (CMHS), CPS
Our Strategy
• Expenditures: Fuchs proto-full income measure (Medicare expenditures plus adjusted CPS income) – Data sources: Current Medicare History Survey (CMHS), CPS
• Outcomes: CMHS
• Utilization: Cooperative Cardiovascular Project (CCP) data on heart attack patients (1994/95)
Two measures of income: per capita family (CPS) and zip code (CMHS, CCP)
Percentage Increase in Money Income 1992-2001
0
5
10
15
20
25
30
Percent
MoneyIncome
Full Income(1)
Full Income(2)
Low IncomeMiddle IncomeHigh Income
Percentage Increase in Full Income (1): Money Income plus Medicare Expenditures, 1992-2001
0
5
10
15
20
25
30
Percent
MoneyIncome
Full Income(1)
Full Income(2)
Low IncomeMiddle IncomeHigh Income
Medicare Expenditures (Males Age 80-84) 1987 and 1997, by Income Decile
Source: McClellan and Skinner, 2003
3000
3500
4000
4500
5000
5500
6000
6500
7000
7500
8000
1 2 3 4 5 6 7 8 9 10
Income Decile
Med
icar
e E
xpen
dit
ure
s
1997
1987
How Big is a Big Twist?
• Decile 10 spending increase ($3300) less Decile 1 spending increase ($1600)
0200400600800
100012001400160018002000
Medicare
EITC
How Big is a Big Twist?
• Decile 10 spending increase ($3300) less Decile 1 spending increase ($1600)
•Average EITC Payments per family receiving EITC (1997) Source: Brookings-Urban Website
0200400600800
100012001400160018002000
Medicare
EITC
Average Home Health Care Spending By Decile 1987-2001: Men Age 80-84 in 1987
1997$
0
500
1000
1500
2000
2500
1987
1989
1991
1993
1995
1997
1999
2001
Lowest IncomeDecile
Highest IncomeDecile
Home Health Care Expenditures 1996 by Region
Next Measure: Changes over time in Income Including Lifespan
How Does One Place a Dollar Value on Lifespan Extension?
Approach number 1: value gains in life-years for low income households by more (Cost-Benefit Analysis)
Approach number 2: Value gains in life-years for low income households by less (Becker et. al. “WTP”)
10-Year Survival Rates Rose in Highest Income Deciles by More than in Lowest Income Deciles
0.62
0.64
0.66
0.68
0.7
0.72
0.74
0.76
0.78
0.8
0.82
1 2 3 4 5 6 7 8 9 10
Income Decile
10-y
ear
Su
rviv
al R
ate
1982-91
1992-2001
Percentage Increase in Full Income (2): Money Income plus Value of Life Extension, 1992-2001
0
5
10
15
20
25
30
Percent
MoneyIncome
Full Income(1)
Full Income(2)
Low IncomeMiddle IncomeHigh Income
A Third Approach: Focus on Utilization of “Effective” Technological Innovations
Causes of 90-Day AMI Mortality Decline, 1975-1990Source: Heidenrich and McClellan, 2001
AspirinBeta BlockerThrombolyticsACE InhibitorsPrimary PTCA
No Significant Impact: CABG, calcium antagonists, PTCA (non-primary), nitrates, anticoagulants, etc.
Effective Care Following AMI: By Zip Code Income
Beta Blocker
ACE Inhibitor
Reper-fusion
Smoking Cessation Advice
Decile 1 40 57 32 33
Decile 10 47 59 37 35
Difference 7 2 5 2
Percent of “Ideal” Patients Receiving Beta Blockers at Discharge Percent of “Ideal” Patients Receiving Beta Blockers at Discharge Following AMI (1994-95)Following AMI (1994-95)
Beta Blocker Use By RegionSource: Dartmouth Atlas
0.00.0
20.020.0
40.040.0
60.060.0
80.080.0
100.0100.0
Income per Capita in 2000 andAverage 1-Year AMI Mortality (1989-2000) by State
AL
AR
AZ
CA
CO
CT
DE
FL
GA
IAID
ILIN
KS
KY
LA
MA
MD
ME
MI
MN
MO
MS
MT
NC
ND
NE NH
NJ
NM
NVNY
OH
OK
OR PA
RI
SC
SD
TN
TX
UT
VA
VT
WAWI
WV
WY
-.06
-.04
-.02
6.94
e-18
.02
Adj
uste
d O
ne-Y
ear
Mor
talit
y P
ost-
MI
20000 25000 30000 35000 40000per capita income (nominal), 2000
Putnam’s Social Capital Index andAverage 1-Year Mortality (1989-2000) by State
AL
AR
AZ
CA
CO
CT
DE
FL
GA
IAID
ILIN
KS
KY
LA
MA
MD
ME
MI
MN
MO
MS
MT
NC
ND
NENH
NJ
NM
NVNY
OH
OK
ORPA
RI
SC
SD
TN
TX
UT
VA
VT
WAWI
WV
WY
-.06
-.04
-.02
6.94
e-18
.02
Adj
uste
d O
ne-Y
ear
Mor
talit
y P
ost-
MI
-1 0 1 2Soc Cap Index, Putnam
Medicare Expenditures (Age 70-74 M) by Year (1982-91 or 1992-2001)
0
1000
2000
3000
4000
5000
6000
7000
1 2 3 4 5 6 7 8 9 10Year
$199
6 E
xpen
dit
ure
s Decile 1 in 1992Decile 10 in 1992
Decile 1,10 in 1982