Methodological Biases in Estimating the Burden of Out-of-Pocket Expenses

Published in: Health Services Research, v. 35, no. 6, Feb. 2001, Commentary, p. 1357-1370

by Dana P. Goldman, James P. Smith

Read More

Access further information on this document at

This article was published outside of RAND. The full text of the article can be found at the link above.

In a recent issue of Health Services Research, Gross, Alecxih, Gibson, et al. (1999) (hereafter referred to as Gross et al.) argued that out-of-pocket health care expenses impose a substantial burden on the elderly, especially the poor elderly. They find that the elderly spend 19 percent of their income on medical care and, more importantly, that the average share rises to 35 percent for the poor elderly. Their estimates are based on simulations from the 1993 Medicare Current Beneficiary Survey (MCBS) but are similar to estimates by Moon, Kuntz, and Pounder (1996) from the 1987 National Medical Expenditure Survey using the same methodology. Gross et al. conclude from these results that Congress should increase the financial protection against high out-of-pocket expenses for the elderly. Unfortunately, the methodology used by Gross et al. substantially overstates the true burden of out-of-pocket health care expenses for the elderly, and this overstatement is particularly large for the poor elderly. Their approach also distorts the real policy issues that exist in providing elderly Americans adequate protection against the possibility of significant medical expenses during their old age. In this commentary, the authors describe the source and degree of the biases that exist in their research methodology.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.