chartbook #12: outpatient prescription drug expenses, 1999 · in 1999,outpatient prescription drug...

U. S. Department of Health and Human ServicesAgency for Healthcare Research and Quality

www.ahrq.gov

MEPS Chartbook No. 12Medical Expenditure Panel Survey

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Outpatient Prescription Drug Expenses, 1999

Medicare/ Population Therapeuticnon-Medicare subgroups classes of drugs

Suggested citation:

Stagnitti MN, Miller GE, Moeller JF. Outpatient prescription drug expenses, 1999. Rockville (MD):Agency for Healthcare Research and Quality; 2003. MEPS Chartbook No.12. AHRQ Pub. No. 04-0001.

The estimates in this report are based on the most recent data available from MEPS at the time the report was written. However, selectedelements of MEPS data may be revised on the basis of additional analyses, which could result in slightly different estimates from those shownhere. Please check the MEPS Web site for the most current file releases—

www.meps.ahrq.gov

AHRQ is the lead Federal agency charged with supporting research designed to improve the quality of health care, reduce its cost, addresspatient safety and medical errors, and broaden access to essential services.AHRQ sponsors and conducts research that provides evidence-basedinformation on health care outcomes; quality; and cost, use, and access.The information helps health care decisionmakers—patients and clinicians,health system leaders, and policymakers—make more informed decisions and improve the quality of health care services.

MEPS Chartbook No. 12 by:

Marie N. Stagnitti, M.P.A.

G. Edward Miller, Ph.D.

John F. Moeller, Ph.D.

Medical Expenditure Panel Survey

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In 1999, outpatient prescription drugexpenses in the U.S. civiliannoninstitutionalized population totaled$94.2 billion and accounted for almost16% of total health expenses.

Medicare beneficiaries comprised only14% of the community population butaccounted for more than 41% ofprescription medicine expenses. Theaverage drug expense was about fourtimes larger for Medicare beneficiaries($990) than for the non-Medicarepopulation ($236).

Medicare beneficiaries paid for a muchlarger portion of their drug expensesout of pocket (57%) than the non-Medicare population (39%).

The average prescription drug expenseper person in the community population(including people with no expenses) was$341. The average per person with anexpense (about 62% of the population)was $547.

The top 10% of the population (that is,the 10% of the population with thehighest drug spending) accounted for71% of expenses for the non-Medicarepopulation and 41% of expenses amongMedicare beneficiaries.

Drug expenses were concentratedamong people in fair or poor health inboth the Medicare and non-Medicarepopulation.

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Nearly half (46%) of the total spendingfor outpatient prescription drugs waspaid by patients and their families. Thispercentage was more than twice aslarge as the out-of-pocket share for totalhealth expenses (19%).

The five therapeutic classes of drugsaccounting for the largest expenses inthe community population in 1999 werecardiovascular agents, hormones, centralnervous system agents,psychotherapeutic agents, andrespiratory agents.

The four therapeutic classes of drugsaccounting for the largest expenses forchildren in the community population in1999 were respiratory agents, anti-infectives, psychotherapeutic agents, andtopical agents.

1 Introduction

2 Source of Data

5 Section 1Overview

17 Section 2Population Subgroups

27 Section 3Therapeutic Classes of Drugs

33 References

34 Definitions of Terms


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cont

ents

This chartbook presents datafrom the 1999 Medical ExpenditurePanel Survey (MEPS), which issponsored by the Agency forHealthcare Research and Quality(AHRQ), on spending foroutpatient prescription medicinesfor the U.S. civiliannoninstitutionalized population.This chartbook is organized intothree sections. Section 1 presents asummary of overall outpatientprescription medicine expenses andpayments. Section 2 contains

outpatient prescription medicineexpenses and payments by variouspopulation groups. Section 3contains expenses on outpatientprescription drugs by therapeuticclass. See the “Definitions ofTerms” section for information anddefinitions of the categories usedthroughout the Chartbook.

This Chartbook and otherMEPS publications are availableelectronically on the MEPS Web siteat <http://www.meps.ahrq.gov/>.


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The estimates presented in thisreport come from the MedicalExpenditure Panel Survey (MEPS)Household Component. MEPS iscosponsored by the Agency forHealthcare Research and Quality(AHRQ) and the National Centerfor Health Statistics (NCHS). It isa nationally representative survey ofthe U.S. civilian noninstitutionalized(community) population thatcollects data on medical expensesfor both individuals and households.The MEPS Household Componentcollects detailed data ondemographic characteristics, healthconditions, health status, use ofmedical care services, charges andpayments, access to care, satisfactionwith care, health insurancecoverage, income, and employment.Other MEPS components collectdata on the use, charges, andpayments reported by medical careproviders and on the healthinsurance offerings and costsreported by employers.

Sources for more informationon technical aspects of MEPS—suchas the survey design and themethodology used to obtainestimates—are given in thereferences section.

MEPS data are released to thepublic in summary reports andmicrodata files. Summary reportsare released in print and/or aselectronic files on the MEPS Website (www.meps.ahrq.gov). Allmicrodata files are available fordownload from the MEPS Web sitein compressed formats (Zip andself-extracting executable files).Selected data files are available onCD-ROM from the AHRQClearinghouse.

The estimates shown in thisChartbook are drawn from analysesfrom public use files (1999 Full YearConsolidated Data File HC-038and 1999 MEPS PrescribedMedicines File HC-033A) and fromother information available on theMEPS Web site. Only prescription


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medicines, not over-the countermedicines, are included. Drugs wereassigned to therapeutic classes bylinking HC-033A to the MultumLexicon database, a product ofCerner Multum, Inc.(http://www.multum.com).

Only differences that arestatistically significant at the 0.05level are discussed in the text. Insome cases, totals may not addprecisely to 100% because ofrounding.

Overview Outpatient prescription drugsplay an ever-increasing role in healthcare delivery in the United States.MEPS data show that totaloutpatient drug expenses for theU.S. civilian noninstitutionalizedpopulation grew from $65.3 billionin 1996 to $94.2 billion in 1999, anincrease of 44%. Meanwhile,prescription medicine spendingincreased its share of overall healthcare spending from 12% in 1996 to16% in 1999.

This section presentsinformation on overall expenses andsources of payments for outpatientprescription drugs used by thecommunity population in 1999. Ithighlights and compares variousstatistics for the total, Medicare, andnon-Medicare populations. It alsopresents information on theconcentration of expenses for thetotal, Medicare, and non-Medicarepopulations. This information isuseful in determining how equitablyand efficiently drug resources areused.


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What proportion of the communitypopulation has outpatient prescription

medicine expenses?• In 1999, 62% of the 276.4

million people in the U.S. civiliannoninstitutionalized populationhad an outpatient prescriptiondrug expense.

• Outpatient prescription drugexpenses totaled $94.2 billion,accounting for almost 16% oftotal health care spending.

• The community populationpurchased a total of 2.1 billionprescriptions, an average ofalmost eight prescriptions perperson.

No drugexpense

37.6%Drug

expense62.4%

276.4 million people

2.1 billion prescriptions

Community population

Outpatient prescription medicinesU.S. community population, 1999

• In 1999, about half of thecommunity population had drugexpenses of less than $31 (themedian value). Most people withexpenses below the median didnot have any drug expense.Themean (average) expense perperson was $341.

• Among people with at least onedrug purchase, the mean expense($547) was about three timeslarger than the median expense($174).

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What are the mean and median expenses forprescription medicines?

Per person Per person with expense

$0

$100

$200

$300

$400

$500

$600

$31

$547

$174

Mean Median Mean Median

$341

Mean and median expenses


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• In 1999, the 38.6 millionMedicare beneficiaries comprisedonly 14% of the communitypopulation but accounted for40% of total prescription drugpurchases and 41% of totalprescription medicine expenses.

• The average drug expense perMedicare beneficiary ($990) wasmore than four times as large asthe average expense for the non-Medicare population ($236).

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To what extent do Medicare beneficiariespurchase a disproportionate share of

prescription medicines?

Non-Medicare

Medicare

Population Purchases Expenses0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

86.0%

39.6%

59.5%

14.0%

60.4%

40.5%

Aggregate expenses and purchases


$990

$236

Mean expense

$0

$100

$200

$300

400

$500

$600

$700

$800

$900

$1,000

86%

39.6%

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• In 1999, the difference in meandrug expenses between theMedicare and non-Medicarepopulations came primarily fromdifferences in the quantities ofdrugs purchased rather thandifferences in the prices paid fordrugs.

• A higher percentage of theMedicare population (88%) thanthe non-Medicare population(58%) purchased prescriptiondrugs.

• The average number ofprescription drug purchases forpeople with an expense washigher for Medicare beneficiaries(24) than for the non-Medicarepopulation (9).

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What factors account for higher averageprescription medicine expenses for theMedicare population?

Medicare$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50$47

Non-Medicare

$45

Average prescription medicine price

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 87.8%

Non-Medicare

58.3%

Percent of population with expense

0

5

10

15

20

25 24

Non-Medicare

9

Average number of purchasesper person with expense

Medicare Medicare


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• In 1999, outpatient drugexpenses were more concentratedin the non-Medicare populationthan among Medicarebeneficiaries.

• The top 10% of the population(that is, the 10% of thepopulation with the highest drugspending) accounted for 41% ofexpenses for the Medicarepopulation and 71% of expensesfor the non-Medicare population.Similarly, the top 30% of thepopulation accounted for 75% ofMedicare drug expenses and 95%of non-Medicare expenses.

• The bottom 50% (those belowthe median drug expense of$550 for Medicare beneficiariesand $17 for the non-Medicarepopulation) accounted for 9% ofMedicare drug expenses and lessthan 1% of non-Medicareexpenses.

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How are prescription medicine expensesconcentrated in the Medicare and

non-Medicare populations?

Medicare

0%

20%

40%

60%

80%

100%

74.7%

41.0%

Concentration of drug expenses

8.8%

0%

20%

40%

60%

80%

100% 95.1%

70.6%

0.3%

Non-Medicare

Top 30%Top 10% Bottom 50%


• In 1999, nearly half of the $94.2billion spent for outpatientprescription drugs was paid bypatients and their families. Incomparison, only 19% of overallhealth care spending was paid forout of pocket.

• Private health insurance was thelargest third-party payer forprescription drugs, accountingfor a little more than a third oftotal expenses. Public insurers—primarily Medicaid—and othersources accounted for theremaining 18% in expenses.

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Who pays for prescription medicines?

0%

10%

20%

30%

40%

50%

35.4%

46.2%

Source of payment

18.4%

$0

$10

$20

$30

$40

$50

$33.4

$43.5

$17.3

PrivateOut of pocket Public and other

Percent Amount in billions


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................ • In 1999, out-of-pocket payments

accounted for nearly three-fifths(57%) of all prescriptionpayments for Medicarebeneficiaries but slightly less thantwo-fifths (39%) of prescriptionpayments for the non-Medicarepopulation.

• The share of prescriptionexpenses paid by private

insurance was three times as largefor the non-Medicare population(48%) as for Medicarebeneficiaries (16%).

• The share paid by publicinsurance and other sources wastwice as large for Medicarebeneficiaries (26%) as for thenon-Medicare population (13%).

• Although total drug expenses forthe Medicare population ($38.2billion) were only about two-thirds the size of total expensesfor the non-Medicare population($56.1 billion), out-of-pocketexpenses were about $22 billionfor each group.

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Are sources of payment different for theMedicare and non-Medicare populations?

0%

20%

40%

60%

80%

16.4%

57.2%

Source of payment

38.7%

$0

$20

$40

$60

$38.2

$56.1

Private

Out of pocket

Public and other

Percent Amount in billions

26.4%

48.3%

13.0%

Medicare Non-Medicare Medicare Non-Medicare

$6.3

$10.1

$21.8$27.1

$7.3

$21.7


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.................. . . . . . . . . . . .• In 1999, a little over half of all

Medicare beneficiaries hadMedicare and supplementalprivate insurance (53%). Smallerproportions had Medicare only(33%) or Medicare and otherpublic insurance (14%).

• Over three-quarters (77%) of thenon-Medicare population hadprivate insurance. An additional10% had public insurance onlyand the remaining 13% wereuninsured.

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What is the insurance status of theMedicare and non-Medicare populations?

0%

20%

40%

60%

80%

52.8%

33.2%

Insurance status

14.0%

0%

20%

40%

60%

80% 77.2%

12.6%10.1%

Any private UninsuredPublic only

Medicare Non-Medicare

Medicare +any private

Medicareonly

Medicare +other public

only


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................ • In 1999, Medicare beneficiaries

who did not have supplementalhealth insurance paid for nearlythree-quarters of their drugexpenses out of pocket. The out-of-pocket share was smaller forbeneficiaries with any privateinsurance (54%) or Medicare andpublic insurance only (39%).

• Uninsured people paid for 89%of their drug expenses out ofpocket. The out-of-pocket sharewas smaller for people in thenon-Medicare population withany private insurance (37%) orpublic insurance only (27%).

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Does the out-of-pocket payment sharevary by insurance status?

0%

20%

40%

60%

80%

100%

54.1%

72.5%

Out-of-pocket share

39.4%

0%

20%

40%

60%

80%

100%

37.3%

89.2%

26.9%

Any private UninsuredPublic only

Medicare Non-Medicare


Medicareonly


only


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• Although prescription medicinesaccounted for a little less than16% of total health care expensesin 1999, they accounted fornearly two-fifths (38%) of all out-of-pocket expenses.

• The share of all out-of-pockethealth spending that went forprescription medicines was nearlythree-fifths (57%) for Medicarebeneficiaries but only 28% for thenon-Medicare population.

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Do out-of-pocket payments for prescriptionmedicines make up a large share of out-of-pocket payments for health care?

Out-of-pocket drug expenses as percent of totalout-of-pocket expenses for health care

Totalpopulation

Medicare Non-Medicare0%

20%

40%

60% 57.0%

38.0%

28.4%


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• In 1999, the distribution ofexpenses throughout thepopulation was similar forprescription medicines and allhealth care.

• For both types of expenses, the10% of the population with thehighest spending accounted forabout two-thirds of the total, andthe top 30% accounted for 90%or more of the total.

• The bottom 50% accounted for alarger share of total healthexpenses (3%) than of drugexpenses (0.6%).

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Is the distribution of expenses throughoutthe population different for prescription

medicines than for total health care?

0%

20%

40%

60%

80%

100% 94.0%

66.5%

0.6%0%

20%

40%

60%

80%

100%

89.6%

66.7%

3.1%

Top 30%Top 10% Bottom 50%

Concentration of drug expenses Concentration of total health care expenses


PopulationSubgroups

Use and expenses forprescription drugs vary acrosssubgroups of the communitypopulation for many reasons,including differences in access anddifferences in health status.Appropriate health care policydecisions regarding prescriptiondrugs require both anunderstanding of how total and out-of-pocket expenses vary acrosssubgroups of the communitypopulation and information on theextent to which drug expenses areconcentrated within certainsubgroups. This section presentsinformation on total expenses andout-of-pocket expenses by age,insurance status, health status, andincome. Results are presented forthe total population, Medicarebeneficiaries, and the non-Medicarepopulation.


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• Medicare covers not only elderlypeople but also certain youngerpeople with disabilities andpeople with end-stage renaldisease (permanent kidney failurewith dialysis or a transplant,sometimes called ESRD). In1999, expenses for Medicarebeneficiaries were somewhat

concentrated in the non-elderlyage group. People under 65made up 11% of totalbeneficiaries but accounted for16% of expenses.

• In the non-Medicare population,prescription medicine expenseswere concentrated among peoplein the older age groups.

Although people ages 45-64made up only 24% of the non-Medicare population, theyaccounted for 53% of prescriptionexpenses. People under 45 madeup 76% of the non-Medicarepopulation but accounted foronly about 47% of drug expenses.

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Are prescription medicine expenses highlyconcentrated in certain age groups?

Non-Medicare

Under 65 years

65-74 years

75-84 years

85 years and over

0%

20%

40%

60%

80%

100%11.1%

$56.1

Medicare

Percent of Medicarebeneficiaries

Percent ofexpenses

32.1%

9.7%

47.1% 42.9%

8.2%

16.0%

32.9%

0%

20%

40%

60%

80%

100%10.2%

2.1%

Percent of non-Medicarepopulation

Percent ofexpenses

45.3%

14.7%

20.5%

36.7%

25.2%

7.9%

28.0%

9.3%

6-17 years

18-44 years

45-54 years

55-64 years

Under 6 years


0%

20%

40%

60%

80%

100% Any private

Public only

Uninsured

Non-Medicare

0%

20%

40%

60%

80%

100%

33.2%

$56.1

Medicare


Percent ofexpenses

14.0%

52.8% 54.8%

29.4%

15.9%

77.2% 80.2%


Percent ofexpenses

12.6%

10.1%

5.5%

14.3%


Medicare only

Medicare + any private

Medicare + otherpublic only

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• In 1999, drug expenses were notdisproportionately concentratedin any group of Medicarebeneficiaries classified by theirhealth insurance status.

• In the non-Medicare population,drug expenses were moreconcentrated among people withpublic insurance, lessconcentrated among theuninsured, and aboutproportionate for people withprivate insurance

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Are prescription medicine expenses highlyconcentrated among people with privateinsurance?

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Are prescription medicine expenses highlyconcentrated among people in fair or poor

health?

20%

40%

60%

80%

100%

0%

Good

Fair

Poor

Excellent

Very good

Non-Medicare

17.8%

$56.1

Medicare


Percent ofexpenses

15.5%

31.6%


Percent ofexpenses


0%

20%

40%

60%

80%

100%

25.4%

8.4%

9.0%

21.1%

36.0%

18.9%

14.6%

43.9%

$56.1

1.2%

31.3%

4.0%

19.6%

19.3%

17.1%

27.5%

26.8%

9.3%

• In 1999, people in fair or poorhealth represented 24% of theMedicare population yetaccounted for 36% of totalprescription medicine expensesfor that population. In contrast,those in very good or excellenthealth made up 43% of the

Medicare population yetaccounted for only 28% of totaldrug expenses.

• In the non-Medicare population,people in fair or poor healthrepresented about 5% of thepopulation yet accounted for 26%

of total prescription medicineexpenses. Those in very good orexcellent health made up 75% ofthe non-Medicare population butaccounted for only 46% of totaldrug expenses.

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• In 1999, prescription medicinespending was notdisproportionately concentratedin any income group of Medicarebeneficiaries.

• Among the non-Medicarepopulation, prescription expenseswere not disproportionatelyconcentrated among the poorbut were disproportionatelyconcentrated in the highestincome group.

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Are prescription medicine expenses highlyconcentrated among lower incomegroups?

0%

20%

40%

60%

80%

100%

20%

40%

60%

80%

100%

0%

Low income

Near poor

Poor

High income

Middle income

Non-Medicare

27.5%

$56.1

Medicare


Percent ofexpenses

6.2%

20.7%


Percent ofexpenses


33.4%

12.2%

25.1%

6.1%

19.9%

36.2%

12.7%

40.2%

$56.1

11.8%

30.8%

4.2%

13.0%

46.5%

2.8%9.4%

27.1%

14.2%

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................ • In 1999, non-elderly beneficiaries

had the highest averageprescription expenses per user($1,670) in the Medicare group.

• The out-of-pocket payment sharefor prescription medicines peruser for Medicare beneficiarieswas highest for those age 85 and

over (71%) and next highest forthose ages 75-84 (60%).

• Average annual drug expensesper user in the non-Medicarepopulation increased steadily withage, from $85 for children under6 to $829 for the 55-64 agegroup.

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Do per-user prescription medicineexpenses vary by age?

Under 65 years

65-74years

75-84years

85 yearsand over

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$491

$727

$445

Average third party

Average out of pocket

Medicare beneficiaries with expense


$286

$540

$943

$677 $715

$129$49

$203

Non-Medicare population with expense

$401

$138$68

$241$320

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Under 6years

6-17years

18-44years

45-54years

55-64years

$509

Mea

n ex

pens

e

Mea

n ex

pens

e

$35

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.................. . . . . . . . . . . .• In 1999, the average expense for

Medicare beneficiaries with anexpense ranged from $1,315 forpeople with public insurancecoverage in addition to Medicareto $1,024 for those with nocoverage except Medicare.

• In the non-Medicare population,prescription medicine users’average expense was muchhigher for people with onlypublic insurance coverage ($569)than for people who had anyprivate insurance ($397) or wereuninsured ($275).

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How do prescription medicine expensesper user vary by insurance status?

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$523

$281

$797Average third party




$618

$743

$518

$30


$249

$153$245$148

$416Mea

n ex

pens

e

Mea

n ex

pens

e

Medicareonly



only

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

UninsuredAny private Public only

................

................ • In 1999, average prescription

medicine expenses for peoplewith an expense increased ashealth status worsened for boththe Medicare and non-Medicarepopulations.

• The share of per-user expensespaid out of pocket did notchange with health status forMedicare beneficiaries, remainingstable at 54%-59%. However, forthe non-Medicare population,

the out-of-pocket share rangedfrom 43% for people in excellenthealth to 33% for those in fairhealth.A

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Is health status related to per-userprescription medicine expenses?

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$655

$514

$825Average third party




$286

$732

$354

$784

$1,072

$196$121

$305


$811

$187$131

$405

$714

$1,215

Mea

n ex

pens

e

Mea

n ex

pens

e

$358

$274

$482

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Excellent Verygood

Good Fair Poor$92

Excellent Verygood

Good Fair Poor

..

.................. . . . . . . . . . . .• In 1999, there were no

significant differences acrossincome groups in per-userprescription medicine expensesand out-of-pocket shares forMedicare beneficiaries exceptthat the high-income group hadlower average expenses and alower out-of-pocket share thanthe middle-income group.

• In the non-Medicare population,people in the high-income groupand the poor group had thehighest average drug expenses.People in the high-income grouphad lower out-of-pocket sharesthan the near-poor, low-income,and middle-income groups.

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How are income and per-user prescriptionmedicine expenses related?

$0

$200

$400

$600

$800

$1,000

$1,200

$451$473$519 Average third party




$286$644

$531

$643 $658

$214$276

$175


$174

$152$149 $143$191

$332

Mea

n ex

pens

e

Mea

n ex

pens

e

$489

$473

$738

Highincome

Middleincome

Lowincome

Nearpoor

Poor

$155$0

$200

$400

$600

$800

$1,000

$1,200

Highincome

Middleincome

Lowincome

Nearpoor

Poor


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TherapeuticClasses of

Drugs

Outpatient prescriptionmedicines help in a wide range ofsituations, from management ofchronic conditions to treatment ofacute conditions. Therefore, acomplete picture of outpatientprescription drug use requiresinformation on which types of drugsare most commonly used by thecommunity population.

This section presentsinformation on the five therapeuticclasses of prescribed medicines (suchas cardiovascular agents, hormones,and anti-infectives) that accountedfor the largest percent of expensesfor several population groups andgives the percent of people usingthem.

The population groups forwhich data are presented are thetotal population, elderly Medicarebeneficiaries, non-elderly Medicarebeneficiaries (under age 65), non-Medicare adults (18-64), andchildren (under 18).

sect

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3

................

................ • In 1999, of the $94.2 billion

spent for prescription drugs bythe community population, alarger percent (20%) was spenton cardiovascular agents than onany other therapeutic class. Theother therapeutic classes in the

top 5 in expenses werehormones, central nervoussystem agents, psychotherapeuticagents, and respiratory agents.

• Of the top-selling classes ofdrugs, central nervous system

agents were used by the highestpercent of people (21%),followed by hormones (19%),respiratory agents (18%),cardiovascular agents (16%), andpsychotherapeutic agents (10%).

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What are the top 5 therapeutic classes ofdrugs for the community population?

Respiratory agents

Psychotherapeuticagents

Central nervoussystem agents

Hormones

Cardiovascularagents

0%

10%

20%

30%

10.8%

Percent of drug expenses

14.3%

20.1%

10.2%

8.0%


0%

10%

20%

30%

21.1%


19.1%

15.6%

9.9%

17.8%

..

.................. . . . . . . . . . . .

• In 1999, of the $32.1 billionspent on prescription drugs bythe 34.3 million elderly (65 andover) Medicare beneficiaries, alarger percent (32%) was spent oncardiovascular agents than on anyother therapeutic class. Theother therapeutic classes in the

top 5 in expenses werehormones, anti-hyperlipidemic(cholesterol-lowering) agents,central nervous system agents,and gastrointestinal agents.

• Of the top-selling classes ofdrugs, cardiovascular agents were

purchased by the highestpercentage of people (59%),followed by hormones (40%),central nervous system agents(34%), anti-hyperlipidemic agents(20%), and gastrointestinal agents(20%).

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What are the top 5 therapeutic classes ofprescribed medicines for elderly Medicarebeneficiaries?

0%

10%

20%

30%

40%

50%

60%

10.6%


12.7%

32.4%

8.2% 7.7%


0%

10%

20%

30%

40%

50%

60%

20.4%


40.2%

58.8%

33.8%

20.0%Gastrointestinalagents


Anti-hyperlipidemicagents

Hormones


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What are the top 5 therapeutic classes ofdrugs for non-elderly Medicare beneficiaries?

• In 1999, of the $6.1 billion spenton prescription drugs by the 4.3million non-elderly (under age65) Medicare beneficiaries, therewas no significant difference inthe percents spent onpsychotherapeutic agents, central

nervous system agents, andcardiovascular agents. Thesewere the top 3 classes of drugsfor which reliable estimates couldbe made.

• Over one-half (52%) of all non-elderly Medicare beneficiaries

used central nervous systemagents. This was a larger percentthan for any of the other top-selling therapeutic classes ofdrugs for which reliable estimatescould be made.



Immunologicagents*

0%

10%

20%

30%

40%

50%

60%

14.4%


16.7%

*

13.1%

8.5%


0%

10%

20%

30%

40%

50%

60%

52.1%


34.3%38.1%

21.5%Gastrointestinalagents


* Reliable estimates cannot be produced because relative standard error is too large.

*


• In 1999, of the $50.4 billionspent on prescription drugs bythe 164.9 million persons in thenon-Medicare adult population(18-64 years), a larger percent(17%) was spent on hormonesthan on any other therapeutic

class. The next 4 top-sellingclasses of drugs, in order, werecardiovascular agents,psychotherapeutic agents, centralnervous system agents, andrespiratory agents.

• Nearly one-quarter (23%) of theadult non-Medicare populationused central nervous systemagents. This was a higherpercent than for any of the othertop-selling therapeutic classes ofdrugs for this population.

..

.................. . . . . . . . . . . .

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What are the top 5 therapeutic classes ofprescribed medicines for the non-Medicareadult population?



Hormones

0%

10%

20%

30%

12.6%


15.2%

12.3%

8.9%


0%

10%

20%

30%

9.9%


12.6%

23.4%

17.4%

Respiratoryagents


17.2%

20.7%

................

................ • In 1999, of the $5.6 billion

spent on prescription drugs bythe 72.9 million children under18, respiratory agents (23%) andanti-infectives (18%) accountedfor the highest percentages oftotal expenses.

• Nearly 3 out of 10 children inthis population (28%) used anti-infective drugs, a higher percentthan for any of the other top-selling therapeutic classes ofdrugs for this population.

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What are the top 5 therapeutic categoriesof prescribed medicines for children?


Anti-infectives

Respiratoryagents

0%

10%

20%

30%

13.5%


17.8%

12.5%


0%

10%

20%

30%

4.2%


28.1%

17.6%

Miscellaneousagents*

Topical agents

22.6%

17.0%

*


*


Berk ML, Monheit AC. The concentrationof health care expenditures, revisited.Health Aff March/April 2001; 20(2):9-18.

Cohen J. Design and methods of theMedical Expenditure Panel SurveyHousehold Component. Rockville(MD): Agency for Health Care Policyand Research; 1997. MEPSMethodology Report No. 1. AHCPRPub. No. 97-0026.

Cohen S. Sample design of the 1996Medical Expenditure Panel SurveyHousehold Component. Rockville(MD): Agency for Health Care Policyand Research; 1997. MEPSMethodology Report No. 2. AHCPRPub. No. 97-0027.

Moeller JF, Stagnitti MN, Horan E, et al.Outpatient prescription drugs: datacollection and editing in the 1996Medical Expenditure Survey (HC-010A). Rockville (MD): Agency forHealthcare Research and Quality; 2001.MEPS Methodology Report No. 12.AHRQ Pub. No. 01-0002.

1999 Medical Expenditure PanelSurvey–Table Compendium. Rockville(MD): Agency for Healthcare Researchand Quality; 2003. Available at:http://www.meps.ahrq.gov/compendiumtables/tc_toc.htm.

1999 Medical Expenditure Panel SurveyPrescribed Medicines File: MEPS HC-033A. Rockville (MD): Agency forHealthcare Research and Quality; 2002.Available at: http://meps.ahrq.gov/puf/pufdetail.asp?id=91.


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Please consult the MEPS Web site at http://www.meps.ahrq.gov/ for anupdated publications list and other information from MEPS. For additionalinformation, contact the MEPS Project Director at [email protected].

Outpatient Prescription MedicinesThis category covers expenses for alloutpatient prescription medications thatthe household or individual purchased orrefilled from a pharmacy provider not in aninpatient setting. It includes expenses forinsulin and diabetic supplies andequipment. It does not include over-the-counter medicines.

Source of PaymentThe percents of sources of payment shownhere represent the share of total expenses(summed across all persons) paid for byeach payment source. Sources of paymentare classified as follows:Out-of-pocket—This category includespayments by user or family.Private insurance—Private insuranceincludes payments made by major medicalinsurance plans covering hospital andmedical care (excluding payments fromMedicare, Medicaid, and other publicsources). Payments from Medigap plansfor Medicare beneficiaries, CHAMPUS(the military health care system now calledTRICARE), and CHAMPVA (for militaryveterans) are included. Payments fromplans that provide coverage for a singleservice only, such as dental or visioncoverage, are not included.Public insurance—Public insuranceincludes Medicare; Medicaid; Departmentof Veterans Affairs (excludingCHAMPUS/CHAMPVA); other Federalsources (Indian Health Service, militarytreatment facilities, and other care

provided by the Federal Government);various State and local sources (communityand neighborhood clinics, State and localhealth departments, and State programsother than Medicaid); Medicaid paymentsreported for persons who were notenrolled in the Medicaid program at anytime during the year; and other publicsources of payment.Other—This category includes Workers’Compensation; unclassified sources(automobile, homeowner’s, or liabilityinsurance and other miscellaneous orunknown sources); and any type of privateinsurance payments reported for peoplewithout private health insurance coverageduring the year.

Population Characteristics In general, population characteristics weremeasured as of December 31, 1999, or thelast date that the sample person was part ofthe civilian noninstitutionalized populationliving in the United States prior toDecember 31, 1999. Subgroups withinthis population are defined here.Medicare beneficiary/non-Medicarepopulation—People are consideredMedicare beneficiaries if they were coveredby Medicare for at least half of the monthsthey were in the survey. For analyticpurposes, this classification also includes avery small number of persons age 65 andover who did not report Medicarecoverage. All others are consideredmembers of the non-Medicare population.


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Elderly/non-elderly—People are consideredelderly if they were 65 or over. All othersare considered non-elderly. Adult/child—People are considered adults ifthey were 18 or over. Those under age 18are considered children.

Health Insurance StatusIndividuals under age 65 were classified intothe following three insurance categories:Any private health insurance— Individualswith insurance that provides coverage forhospital and physician care at any timeduring the year, other than Medicare,Medicaid, or other publichospital/physician coverage, are classified ashaving private insurance. Medigap coverageis included in this category. Persons withArmed-Forces-related coverage—CHAMPUS/CHAMPVA (currently calledTRICARE)—are also included. Insurancethat provides coverage for a single serviceonly, such as dental or vision, is notincluded.Public coverage only—Individuals areconsidered to have public coverage only ifthey met both of the following criteria: • They were not covered by private

insurance at any time during the year.

• They were covered by one of thefollowing public programs at any pointduring the year: Medicare, Medicaid, orother public hospital/physiciancoverage.

Uninsured—The uninsured are defined aspersons not covered by Medicare,CHAMPUS/CHAMPVA, Medicaid, otherpublic hospital/physician programs, orprivate hospital/physician insurance at anytime during 1999. Individuals covered onlyby noncomprehensive State-specificprograms (e.g., Maryland Kidney DiseaseProgram, Colorado Child Health Plan) orprivate single-service plans (e.g., coveragefor dental or vision care only, coverage foraccidents or specific diseases) are notconsidered to be insured. Individuals age 65 and over were classifiedinto the following three insurancecategories: Medicare and private insurance—Thiscategory includes persons classified asMedicare beneficiaries and covered byMedicare and a supplementary privatepolicy.Medicare and other public insurance—Thiscategory includes persons classified asMedicare beneficiaries who met both of thefollowing criteria:• They were not covered by private

insurance at any time during the year.

• They were covered by one of thefollowing public programs at any pointduring the year: Medicaid, other publichospital/physician coverage.

Medicare only—This category includespersons classified as Medicare beneficiariesbut not classified as Medicare and private

insurance or as Medicare and other publicinsurance.

IncomeEach person was classified according to thetotal 1999 income of his or her family.Within a household, all individuals relatedby blood, marriage, or adoption wereconsidered to be a family. Personal incomefrom all family members was summed tocreate family income. Possible sources ofincome included annual earnings fromwages, salaries, bonuses, tips, andcommissions; business and farm gains andlosses; unemployment and Worker’sCompensation; interest and dividends;alimony, child support, and other privatecash transfers; private pensions, IRAwithdrawals, Social Security, and veterans’payments; Supplemental Security Incomeand cash welfare payments from publicassistance, Aid to Families with DependentChildren, and Aid to Dependent Children;gains or losses from estates, trusts,partnerships, S corporations, rent, androyalties; and a small amount of otherincome.Poverty status is the ratio of family incometo the 1999 Federal poverty thresholds,which vary by family size and age of thehead of the family. Those categories are:Poor—Persons in families with income lessthan or equal to 100% of the poverty lineare considered poor. (Some of these personsare in families reporting negative income.)

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Near poor—Persons in families with incomeover 100% through 125% of the povertyline are considered near poor.Low income—Persons in families withincome over 125% through 200% of thepoverty line are considered low income.Middle income—Persons in families withincome over 200% through 400% of thepoverty line are considered middle incomeHigh income—Persons in families withincome over 400% of the poverty line areconsidered high income.

Perceived Health StatusThe MEPS respondent was asked to ratethe health of each person in the familyaccording to the following categories:excellent, very good, good, fair, and poor.

Therapeutic ClassificationsEach drug that was listed as purchased orotherwise obtained in the MEPS PrescribedMedicines (PMED) File HC-033A wasassigned to a major therapeutic class bylinking the PMED file to the MultumLexicon database, a product of CernerMultum, Inc. The Multum therapeuticclassification system is designed to replicatethe type of organizational schemes used inpractice by physicians and pharmacists. It isimportant to note that the assignedtherapeutic class for a particular drugpurchase in MEPS will not alwayscorrespond to the reported condition forthe drug. Also, a small percent of drugpurchases were assigned to more than onemajor therapeutic class. These drugs wereassigned to a single therapeutic class using acombination of condition information andrandom assignment.

www.ahrq.govAHRQ Publication No. 04-0001October 2003

ISBN 1-58763-136-9ISSN 1531-5649

U.S. Department of Health and Human ServicesPublic Health ServiceAgency for Healthcare Research and Quality540 Gaither RoadRockville, MD 20850

chartbook #12: outpatient prescription drug expenses, 1999 · in 1999,outpatient prescription drug...

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