Medical Expenditure Panel Survey (MEPS)

Funding		FY 2007 Enacted	FY 2008 President's Budget	FY 2008 Enacted	FY 2009 Estimate
Total	Budget Authority	$0	$0	$0	$0
	Public Health Service (PHS) Evaluation Funds	$55,300,000	$55,300,000	$55,300,000	$55,300,000
Full Time Equivalents (FTEs)		NA	NA	NA	NA

FY 2009 Authorization: Title III and IX and Section 937(c) of the Public Health Service Act.

Allocation Method: Contracts, and Other.

A. Program Description and Accomplishments

The Medical Expenditure Panel Survey (MEPS), first funded in 1995 is the only national source for annual data on how Americans use and pay for medical care. It supports all of AHRQ's research related strategic goal areas. The survey collects detailed information from families on access, use, expense, insurance coverage and quality. Data are disseminated to the public through printed and Web-based tabulations, micro data files and research reports/journal articles.

The data from the MEPS have become a linchpin for the public and private economic models projecting health care expenditures and utilization. This level of detail enables public and private sector economic models to develop national and regional estimates of the impact of changes in financing, coverage, and reimbursement policy, as well as estimates of who benefits and who bears the cost of a change in policy. No other surveys provide the foundation for estimating the impact of changes on different economic groups or special populations of interest, such as the poor, elderly, veterans, the uninsured, or racial/ethnic groups. Government and non-governmental entities rely upon these data to evaluate health reform policies, the effect of tax code changes on health expenditures and tax revenue, and proposed changes in government health programs such as Medicare. In the private sector (e.g., RAND, Heritage Foundation, Lewin-VHI, and the Urban Institute), these data are used by many private businesses, foundations and academic institutions to develop economic projections. These data represent a major resource for the health services research community at large. Since 2000, data on premium costs from the MEPS Insurance Component (MEPS-IC) have been used by the Bureau of Economic Analysis to produce estimates of the gross domestic product (GDP) for the Nation. In addition, the MEPS establishment surveys have been coordinated with the National Compensation Survey conducted by the Bureau of Labor Statistics through participation in the Inter-Departmental Work Group on Establishment Health Insurance Surveys.

Because of the need for timely data, performance goals for MEPS have focused on providing data in a timely manner. The MEPS program has met or exceeded all of its data timeliness goals. These performance goals require the release of the MEPS Insurance Component tables within 7 months of data collection; the release of MEPS Use and Demographic Files within 12 months of data collection; the release of MEPS Full Year Expenditure data within 12 months of data collection. In addition, the program has expanded the depth and breadth of data products available to serve a wide range of users. To date, almost 200 statistical briefs have been published. The MEPS data table series has expanded to include 8 topic areas on the household component and 9 topic areas on the Insurance Component. In addition, specific large state and metro area expenditure and coverage estimates have been produced, further increasing the utility of MEPS within the existing program costs. Since its inception in 1996, MEPS has been used in several hundred scientific publications, and many more unpublished reports.

• The MEPS has been used to estimate the impact of the recently passed Medicare Modernization Act (MMA) by the Employee Benefit Research Institute (the effect of the MMA on availability of retiree coverage), by the Iowa Rural Policy Institute (effect of the MMA on rural elderly) and by researchers to examine levels of spending and copayments (Curtis, et al, Medical Care, 2004).
• The MEPS data has been used extensively by the Congressional Budget Office, Department of Treasury, Joint Taxation Committee and Department of Labor to inform Congressional inquires related to health care expenditures, insurance coverage and sources of payment and to analyze potential tax and other implications of Federal Health Insurance Policies.
• MEPS data on health care quality, access and health insurance coverage have been used extensively in the Department's two annual reports to Congress, the National Healthcare Disparities Report and the National Healthcare Quality Report.
• The MEPS has been used in Congressional testimony on the impact of health insurance coverage rate increases on small businesses.
• The MEPS data have informed studies of the value of health insurance in private markets and the effect of consumer payment on health care, which directly align with the Health Care Value Incentives Component of the HHS Priorities for America's Health Care and the Secretary's 500 Day Plan Priority of Transforming the Health Care System.
• The MEPS-IC has been used by a number of States in evaluating their own private insurance issues including eligibility and enrollment by the State of Connecticut and by the Maryland Health Care Commission; and community rating by the State of New York. As part of the Robert Wood Johnson Foundation's State Coverage Initiative, MEPS data was cited in 69 reports, representing 27 states.
• The MEPS data has been used extensively by the Government Accountability Office to determine trends in Employee Compensation, with a major focus on the percentage of employees at establishments that offer health insurance, the percentage of eligible employees who enroll in the health insurance plans, the average annual premium for employer-provided health insurance for single workers, and the employees' share of these premiums.
• MEPS data have been used in DHHS Reports to Congress on expenditures by sources of payment for individuals afflicted by conditions that include acute respiratory distress syndrome, arthritis, cancer, chronic obstructive pulmonary disease, depression, diabetes, and heart disease.
• MEPS data are used to develop estimates provided in the Consumers Checkbook Guide to Health Plans, of expected out of pocket costs (premiums, deductibles and copays) for Federal employees and retirees for their health care. The Checkbook is an annual publication that provides comparative information on the health insurance choices offered to Federal workers and retirees.
• MEPS data has been used by CDC and others to evaluate the cost of common conditions including arthritis, injuries, diabetes, obesity and cancer.

Before AHRQ reorganized research portfolios, MEPS was part of the Data Collection and Dissemination portfolio. This portfolio received a PART review in 2002, and received a Moderately Effective rating. The review cited the Medical Expenditure Panel Survey (MEPS) as a strong attribute of the program. As a result of the PART review, the program continues to take actions to reduce the number of months that MEPS data is made available after the date of completion of the survey, increase the number of MEPS data users, and increase the number of topical areas tables included in the MEPS Tables Compendia. For more information on programs that have been evaluated based on the PART process, go to http://www.whitehouse.gov/omb/expectmore/.

B. Funding History

Funding for the MEPS budget activity during the last five years has been as follows:

Year	Dollars
2004	$55,300,000
2005	$55,300,000
2006	$55,300,000
2007	$55,300,000
2008	$55,300,000

C. Budget Request

The FY 2009 Request for the MEPS totals $55,300,000 in PHS evaluation funds, maintaining the FY 2008 President’s Budget level. The MEPS Household Component (MEPS-HC) of the survey is supported at $35,700,000, the Medical Provider component totals $10,400,000 and the insurance component is supported at $9,200,000.

The FY 2009 funding for MEPS will be used to maintain the sample size and content of the MEPS Household and Medical Provider Surveys necessary to satisfy the congressional mandate to submit an annual report on national trends in health care quality and to prepare an annual report on health care disparities. The MEPS Household Component sample size is maintained at 14,500 households in 2009 with full calendar year information. These sample size specifications for the MEPS permit detailed analyses of the quality of care received by special populations meeting precision specifications for survey estimates. This design, in concert with the survey enhancements initiated in prior years, significantly enhances AHRQ's capacity to report on the quality of care Americans receive at the national and regional level, in terms of clinical quality, patient satisfaction, access, and health status both in managed care and fee-for-service settings.

The MEPS Household Component: These funds will also permit the continuation of an oversample in MEPS of Asian and Pacific Islanders and individuals with incomes <200% of the poverty level. These enhancements, in concert with the existing MEPS capacity to examine differences in the cost, quality and access to care for minorities, ethnic groups and low income individuals, will provide critical data for the National Healthcare Quality Report and the National Healthcare Disparities Report. The MEPS Computer Assisted Personal Interview System (CAPI) is transitioning to a windows based system beginning with the household data collection in 2007. Developmental work was initiated in FY 2005 and will be completed in FY 2009.

The MEPS Insurance Component: Funds will also be allocated to the MEPS Insurance Component to maintain improvements in the availability of data to the States. In FY 2009, data on employer sponsored health insurance will be collected to support separate estimates for all 50 States and these funds would be used to enhance the tabulations we provide to the States to support their analysis of private, employer sponsored health insurance.

The Medical Provider Component: FY 2009 funds will also support the MEPS Medical Provider Component, a survey of medical providers, facilities and pharmacies that collects detailed data on the expenditures and sources of payment for the medical services provided to individuals sampled for the MEPS. Such data are essential to improve the accuracy of the national medical expenditure estimates derived from the MEPS and to correct for the item non-response on expenditures by household sample participants.

Recent enhancements to the estimation capabilities of the MEPS Household Component have also been realized and permit the generation of health care utilization, expenditure and health insurance coverage estimates for some large metropolitan areas and for the ten largest states. This has resulted in visible improvements in the analytic capacity of the survey without any additional increments to the sample size.

MEPS—Marginal Cost

The Baseline MEPS sample consists of approximately 15,000 households and 35,000 individuals, and includes over-sampling of African-Americans, Hispanics, Asians and low income households. With respect to desired levels of precision for survey estimates, a relative standard error (RSE) specification of less than or equal to 10 percent is recommended for survey estimates that characterize policy relevant population subgroups which include racial and ethnic minorities (RSE (X) = standard error (X) divided by the estimate X.). This precision target is not currently being met for estimates of the health care utilization and expenditure patterns for American Indians/Alaskan Natives, subgroups of individuals of multiple races (e.g., race classifications of both African-American and other race), specific Hispanic subgroups (e.g., Puerto Rican, Cuban, Dominican) and Asian population subgroups (e.g., Chinese, Vietnamese, Asian Indian). The FY 2009 cost estimate for MEPS would allow for the following sample yields for these racial and ethnic minority population subgroups in MEPS that have relative standard errors above 10 percent—an average cost of $6,507 per household for the household and medical provider components of the MEPS survey.

MEPS Over-sampling

Subgroup		Baseline—FY 2009 Estimate
		Individuals	Relative Standard Error (for mean expenditures)
Asians		1,300	7.8%
Chinese		160	16%
Hispanic Subgroups	Puerto Ricans	700	11.5%
	Cuban	300	33.2%
	Dominican	225	19.0%%
American Indian/Alaskan Native		400	13.2%
Multiple Race		575	9.0%

The cost components related to the household and medical provider component of MEPS for a full panel of 7,500 households over 3 years are provided on the following:

Cost Components	Baseline
Households	Full MEPS consists of 15,000 households
(1) Sample Selection	$0.6 M
(2) Management	$1.1 M
(3) Hire/Train Household/Medical Provider Survey Staff	$13.4 M
(4.a) Conduct Household Interviews	$20.7 M
(4.b) Data Collection—Medical Providers	$10.9 M
(5) Data Processing/Production of Analytical Files	$12.1 M
Total Cost	$48.8 M
Cost per Household	$6,507

Costs associated with (1) the sample frame preparation and sample selections for the MEPS Household and Medical Provider Surveys and (2) the management tasks are fixed, while costs associated with the remaining data collection and data processing components are variable. In 2007, a marginal cost analysis was completed to determine the marginal cost of increasing the degree of oversampling in the MEPS sample among certain minority sub-groups. This oversampling would allow estimates for these subgroups to be more precise, allowing the implications of program and policies to be more accurately estimated for these groups using MEPS data. As indicated, many estimates for these subgroups have relative standard errors that are higher than the recommended maximum threshold of 10%. The marginal cost to reach the recommended RSE of 10% for these minority subgroups in 2009 and 2010 is $4,000 per additional minority household surveyed, relative to the $6,507 cost per household.

The table below indicates the percent reduction in relative standard errors in survey estimates that could be achieved by a targeted MEPS sample augmentation of 1,000 additional households.

Subgroup		Reduction in RSE (for mean expenditures) with MEPS Sample Augmentation
Asians		24%
Chinese		24%
Hispanic Subgroups	Puerto Ricans	15%
	Cuban	23%
	Dominican	26%
American Indian/Alaskan Native		24%
Multiple Race		16%

D. Performance Analysis

Long-Term Objective 1:

#	Key Outcomes	FY 2004 Actual	FY 2005 Actual	FY 2006		FY 2007		FY 2008 Target	FY 2009 Target	Out-Year Target
				Target/Est.	Actual	Target/Est.	Actual
1.3.16	Insurance Component tables will be available within  months of collection	7	7	6	6	6	6	6	Re-establish baseline—new design	2010 TBD
1.2.4	MEPS Use and Demographic Files will be available months after final data collection	12	11	11	11	11	11	11	11	2010 11
1.3.18	Number of months after the date of completion of the MEPS data will be available	12	11	11	11	11	11	11	11	2010 10
1.3.20	Increase the number of MEPS Data Users	Baselines: 10 active Data Center Projects (DCP) 15,900 Tables Compendia (TC) 13,101 HC/IC Net	14 DCP 16,200 TC 11,600 HC/IC	Exceed baseline standard	33 DCP 19,989 TCP 14,809 HC/IC	Exceed baseline standard	Need to establish new baseline—Web site redesign	Establish new baseline	Exceed baseline standard	2010 TBD

 

#	Key Outcomes	FY 2004 Actual	FY 2005 Actual	FY 2006 Target/Est. Actual		FY 2007 Target/Est. Actual		FY 2008 Target/Est.	FY 2009 Target/Est.	Out-Year Target/Est.
				Target/Est.	Actual	Target/Est.	Actual
1.3.21	Reductions in time will occur for the Point-in-time, Utilization and Expenditure files	N/A	N/A	12 months	12 months	11 months	11 months	11 months	11 months	NA
1.3.19	Increase the number of topical areas tables included in the MEPS Tables Compendia	Quality Tables added	Access Tables added	Add State Tables	State Tables added	Add Insurance Tables	Insurance Tables added	Add Prescribed Drug Rables	Add additional State level tables	TBD
	Appropriated Amount ($ Million)	$55.3M	$55.3M		$55.3M		$55.3M	$55.3M	$55.3M

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