RAND Roybal Center for Health Policy Simulation

Rising Medicare Expenditures for the Oldest Medicare Beneficiaries

Objectives

To document and to explain the dynamic interactions between improved health status and Medicare expenditures for the oldest Medicare beneficiaries.

Progress to date

To date we have created the analytic files needed using the MCBS 1992-2002, prepared descriptive tables, and run models exploring the factors driving increases in expenditures. Contrary to some of our findings in earlier work we are not seeing markedly different trends for the oldest age groups. We have also linked the physician relative value unit data to the claims data in the MCBS.

Research Products

To date we have produced two sets of interim results tables: the growth of Medicare expenditures, total healthcare expenditures and non-Medicare expenditures by age groups (65-69; 70-74; 75-79; 80-84; 85+); and the growth of these expenditures by age groups and type of care (dental, home health, hospice, long term care, inpatient, outpatient, physician, and prescription medicine).

Next Steps

We are going to continue to probe the relationships between health status, age, and expenditure growth — in particular whether there has been differential growth in the types of services received by the oldest Medicare beneficiaries and how this is affected by their health status. We will also look at how treatment intensity and volume of care received contribute to the expenditure growth within each type of care. Linking physician relative value unit data to the claims data in MCBS will enable us to examine the growth in physician care for the oldest Medicare beneficiaries in more details.