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

Slide Presentation from the AHRQ 2008 Annual Conference

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

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 presenting the percentages for "Without Subsidies" and "With Subsidies."

• Without Subsidies:
  • Income Tax: 19%
  • Indirect Tax: 10%
  • Social Tax: 12%
  • Premiums: 44%
  • Out-of-pocket (OOP): 14%
  • Misc.: 1%
• With Subsidies:
  • Income Tax: 26%
  • Indirect Tax: 14%
  • Social Tax: 16%
  • Premiums: 30%
  • OOP: 13%
  • Misc.: 1%

Slide 6

Distribution of Income and Payments by Type, 2002

The line graph's vertical axis, cumulative shares (%), goes from 0 to 100 and the horizontal axis, deciles of population (lowest first), goes from 0 to 10. The line graph shows "Income" beginning at 0 and 0%; it slowly rises to 20% by 5; and then steadily rises to finish at 100% by 10.

Slide 7

Distribution of Income and Payments by Type, 2002

The slide presents a duplicate of the previous slide with an added category, "Income Tax." The results show "Income Tax" beginning at 0 and 0%; rising to 5% by 5; then steadily rising to 100% by 10 with the largest increase of 60% between 9 and 10.

Slide 8

Distribution of Income and Payments by Type, 2002

The slide presents a duplicate of the previous slide with the added categories:
"Social Insurance," "Premiums," and "OOP." The results show "Social Insurance" matching the line graph for "Income;" "Premiums" beginning at 0 and 0%, rising to 40% by 5, then increasing at intervals of 10% to reach 100% by 10; and "OOP" beginning at 0 and 0% and rising at 10% intervals to reach 100% by 10.

Slide 9

Distribution of Income and Payments by Type, 2002

The slide presents a duplicate of the previous slide with the added category, "Total." The results show "Total" beginning at 0 and 0%, steadily rising to 28% by 5, and finishing at 100% by 10 with the largest increase of 30% between 9 and 10.

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 presents the "Percentage of Pre-Tax Income" when combining OOP, Premiums, Social Insurance, Other Tax, and Income Tax for 10 deciles of population.

• 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

Less Regressive, but Large Burdens for Low-Income Families

• 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's vertical axis, total expenditures (2002$), goes from 3500 to 6500 and the horizontal axis, deciles, goes from 1 to 10. The results show "Unadjusted" beginning at $6200 at 1, reaching a minimum of $4200 at 4, increasing slightly to $4500 at 6, decreasing to $4300 at 7, and then finishing at $4700 at 10.

Slide 16

Distribution of Medical Care (Total Expenditures)

The slide presents a duplicate of the previous slide with the added categories, "Linear," "Uncont RW," and "Cont RW." The results show, "Linear" beginning at $4700, "Uncont RW" beginning at $4300, and "Cont RW" beginning at $4500. All three reach a minimum of $4100-$4200 at 2; a maximum of $4900-$5000 at 6; a slight decrease to $4300 at 7, and then finish between $5000-$5200 at 10.

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