A Satellite Account of U.S. Health Care Spending: Plans and progress Brian C. Moyer Associate Director for Industry Accounts 12 th OECD-NBS Workshop on.

A Satellite Account of U.S. Health Care Spending: Plans

and progress

Brian C. MoyerAssociate Director for Industry Accounts

12th OECD-NBS Workshop on National Accounts

Paris, FranceOctober 27-31, 2008

www.bea.gov 2

Health care spending as a percent of GDP

13%

14%

15%

16%

17%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: U.S. Bureau of Economic Analysis

www.bea.gov 3

Health care spending in BEA’s accounts

National income and product accounts Consumer spending on health care Investment in health care equipment Contribution of health care to real GDP

growth

Industry accounts Input-output accounts—detailed

transactions for the health care industries GDP-by-industry accounts—real value

added for the health care industries

www.bea.gov 4

Conceptual model of a national health account

Inputs Outputs Medical Care Market labor/capital Volunteer labor Time invested in own health Other consumption items Research and development Quality of the environment

Health status

Longevity Quality of life Financial externalities

Source: Beyond the Market: Designing Nonmarket Accounts for the United States (National Research Council, 2005)

www.bea.gov 5

BEA’s Health Care Spending Satellite Account

Focuses on three primary areas:

Reconcile National Health Expenditure Accounts and National Income and Product Account measures

Develop disease-based statistics for health care spending

Develop disease-based price indexes for health care spending

www.bea.gov 6

Treatment substitution: An example

Assumptions:

•No price change for either type of treatment

•No change in number of patients

Problem: As patients use outpatient services,

•Nominal expenditures fall

•Treatment prices show no change

•“Real” spending falls, even though quantities did not

Previous studies suggest this issue is numerically important.

price

time

In patient

Out patient

Cost of Cataract Surgery

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Disease-based price indexes: Early research

0.9

1.0

1.1

1.2

1.3

2003q1 2004q1 2005q1

Features of index:

•Constructed using large claims database for HMO patients

•Price = revenue from all sources

•Price is defined as price per patient treated for a homogeneous condition

•Dollars are allocated to conditions using “episode groupers”

•“Providers” are identified using “place of service” variable

Source: Aizcorbe and Nestoriak (2008)

Comparison of disease- and provider-based indexes

Disease-based

Provider-based

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Accounting framework: Initial thoughts

Consumer spending organized by type of disease

Primary caregiving industry provides health care services using inputs from other health care industries, such as hospitals, laboratories, and pharmacies

Productivity gains allocated across industries

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Routing of industry transactions

Other industries provide Intermediate

inputs

Employee Health Insurance

PrimaryCaregiver

Employer

Hospital Clinic Laboratory Pharmacy

Industry that provides health care