54
National Health Expenditures, 1980 1 by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980 (Figure 1), an amount equal to 9.4 percent of the Gross National Product (GNP). Highlights of the figures that underlie this estimate Include the following: Health care expenditures in 1980 accelerated at a time when the economy as a whole exhibited sluggish growth. The 9.4 percent share of the GNP was a dramatic increase from the 8.9 percent share In 1979. Health care expenditures amounted to $1,067 per person in 1980 (Table 1). Of that amount, $450, or 42.2 percent, came from public funds. Expenditures tor health care Included $64.9 billion in premiums to private health Insurance, $70.9 bfllfon in Federal payments, and $33.3 billion in State and local gov· ernment funds (Table 2). Hospital care accounted for 40.3 percent of total health care spending In 1980 (Table 3). These expenditures in· creased 16.2 percent between 1979 and 1980, to a level of $99.6 billion. Spending for the services of physicians increased 14.5 percent to $46.6 billion, 18.9 percent of all health care spending. All third parties combined-private health insurers, governments, philanthropists, and industry-financed 67.6 percent of the $217.9 billion spent lor personal health care In 1980 (Table 4), ranging from 90.9 percent of hospital care services to 62.7 percent of physicians' ser· vices and 38.5 percent of the remainder (Table 5). Direct payments by consumers reached $70.6 billion in 1980 (Table 6). This accounted lor 32.4 percent of all per- sonal health care expenses. Outlays for health care benefits by the Medicare and Medicaid programs totaled $60.6 billion, Including $35.8 billion for hospital care. The two programs combined to pay for 27.8 percent of all personal health care In the na- tion (Table 7). 'This article is the continuation of a series of rePorts begun in the Department of Health, Education, and Welfare in 1964. The series, now the responsibility of the Office of Research, Demonstrations, and Statistics in the Health Care Financing Administration, presents the National Health Ac· counts of the United States. in some cases, data for 1980 are not yet available or are subject to revision (as is the case of Federal budget esti- mates). Despite the preliminary nature of these data, they constitute the most complete estimate of health expendi- tures available. HEALTH CARE FINANCING REVIEW/SEPTEMBER 1981 1

by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

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Page 1: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

National Health Expenditures 19801

by Robert M Gibson and Daniel R Waldo

The United States spent an estimated $247 billion tor health care in 1980 (Figure 1) an amount equal to 94 percent of the Gross National Product (GNP) Highlights of the figures that underlie this estimate Include the following

bull Health care expenditures in 1980 accelerated at a time when the economy as a whole exhibited sluggish growth The 94 percent share of the GNP was a dramatic increase from the 89 percent share In 1979

bull Health care expenditures amounted to $1067 per person in 1980 (Table 1) Of that amount $450 or 422 percent came from public funds

bull Expenditures tor health care Included $649 billion in premiums to private health Insurance $709 bfllfon in Federal payments and $333 billion in State and local govmiddot ernment funds (Table 2)

bull Hospital care accounted for 403 percent of total health care spending In 1980 (Table 3) These expenditures inmiddot creased 162 percent between 1979 and 1980 to a level of $996 billion

bull Spending for the services of physicians increased 145 percent to $466 billion 189 percent of all health care spending

bull All third parties combined-private health insurers governments philanthropists and industry-financed 676 percent of the $2179 billion spent lor personal health care In 1980 (Table 4) ranging from 909 percent of hospital care services to 627 percent of physicians sermiddot vices and 385 percent of the remainder (Table 5)

bull Direct payments by consumers reached $706 billion in 1980 (Table 6) This accounted lor 324 percent of all pershysonal health care expenses

bull Outlays for health care benefits by the Medicare and Medicaid programs totaled $606 billion Including $358 billion for hospital care The two programs combined to pay for 278 percent of all personal health care In the nashytion (Table 7)

This article is the continuation of a series of rePorts begun in the Department of Health Education and Welfare in 1964 The series now the responsibility of the Office of Research Demonstrations and Statistics in the Health Care Financing Administration presents the National Health Acmiddot counts of the United States

in some cases data for 1980 are not yet available or are subject to revision (as is the case of Federal budget estishymates) Despite the preliminary nature of these data they constitute the most complete estimate of health expendishytures available

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 1

FIGURE 1 The National Health Dollar in 1980

Federal Funds Hospital care

Personal Health

Public Funds Pn~ate Health

Insurance Benefits and Other Private

Other Personal

Funds Other Nauonal

Heallh Expendrtures

Private Funds StateLocal Funds

Physicians Services

Consumer~= Health Care

Nursing Home Care Direct Payments

Where It Comes From Where II Goes

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 2

Health Care Expenditures in 1980

The most notable aspect of health care spending in 1980 was its accelerated growth The 152 percent Inmiddot crease In overall health expenditures Is the highest in the last 15 years and is substantially above the 134 percent growth rate between 1978 and 1979 This Inmiddot crease occurred at a time when the overall economy grew by 88 percent Thus the share of the GNP ocmiddot cupied by health care spending spurted from 89 permiddot cent in 1979 to 94 percent in 1980 (See Figure 2)

Reasons for Interest in Health Care Spending

Health care expenditure has received an Increasing amount of national attention over the last few years for a number of reasons First the health care Inmiddot dustry has grown rapidly relative to the US economy In general Not only has the output of the health secshytor accounted for an increasing share of the nations output health care is among the top five industries in the country by standards of payrolls or full-timeshyequivalent employment Second the prices of health care goods and services are widely perceived to be growing at a rate faster than that of other consumer prices a perception that was generally accurate prior to 1980 (See Figure 2) Third personal health has become a subject of greater interest to many people in recent years physical well-being and its attainment having become a common subject of discussion Fourth a large portion of the Federal budget Is tied to health care expenditures The Medicare program In particular finances specific levels of health care with minimal control over the cost of services involved Reducing the growth of Federal spending requires controlling the outlay for health care without comshypromising the quality of benefits provided

Recent Developments In Health Care Spending

Spending patterns show little change over the last three years except for a weak trend toward relatively more hospital and nursing home care Nor has there been much change in the way in which health care is financed What has changed is the rate of growth of health care spending Over the last three years the percentage change in expenditures for health care has Increased steadily and has exceeded the growth rate for the GNP Further the rate of growth in expenditures is greater than can be explained by price growth and population growth combined there has been an increase In the rate of growth of use of services per capita and In the inshytensity of services provided - the number and types of procedures performed during a contact with a health care provider We will discuss these and other matters later in this article

Trends In Health Care Spending Between 1965 and 1980

Over the last 15 years health care expenditures have grown at an average annual rate of 126 percent Spending patterns have changed considerably (Figure 3) as relatively more has been spent on hospital and nursing home care and a smaller percentage on drugs and construction of medical facilities This can be exshyplained by examining some changes In the health care system First the introduction of major public financshyIng programs Including Medicare and Medicaid as well as increases in the scope of private health inshysurance coverage has encouraged use of acute care and long-term care facilities by making their services affordable to large segments of the population previously shut out of the market by price considerashytions Further drug prices remained relatively stable during this time period so that increases in the quanshytity of drugs consumed did not translate into expenshyditure growth to the same extent as Increases in other health care goods and services The relative decline of construction as a part of health care spending can be attributed to the emergence of excess beds In many parts of the US (due in part to the higher levels of construction in the 1950s and 1960s) the end of government construction subsidies and the increasshyIng cost of borrowing funds

Even more dramatic than shifts in utilization patterns however has been the shift in sources of funds for health care spending (Figure 4) The advent of Medicare and Medicaid transferred much of the burden of hospital costs and some of the burden of nursing home care from private payers to the government Private health insurance greatly expanded Its coverage of drug purchases and of dental care with corresponding decreases In the shares borne by consumers

Classification of Health Care Goods and Services

For the sake of discussion the types of health care purchased In the US can be divided into three broad types personal health care other services related to current health care and expenditures for research and construction Within each broad category further distinctions are made among types of goods and sershyvices provided

National health expenditures comprise all spendmiddot ing for health care of individuals plus the adminisshytrative costs of non-profit and government health proshygrams the net cost to consumers of private health insurance government expenditures designed to proshymote health in general non-profit health research and construction of medical facilities (See the section on definitions concepts and sources later in the article) The expenditures exclude spending for environmental Improvement a category which is typically categorized with health In Federal budget documents

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 3

p 1 e 15

14

e c

13 0

12

a 11 g e

9 p

80

7 0

6

5

FIGURE 2 National Health Expenditures and Gross National Product Growth and Relative Sizes 1965middot1980

bull middot middot

(Right Scale)

-middot-----middot-middot-middot-middot -middot-middot ---middot-middot-----middotshy -middot National Health Expenditures as

---middot-middot bull middot-middot-middot shy a Percent of GNP ---middot shy Growth in National Health Expenditures

Growth in the Gross National Product

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

(left Scale) ~ p

e

c e 0

a 109

9 e

8 p

7 0

6 0

5

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 4

B

i 0

n s

0

f

D 0

I

a r s

1965 1970 1975 1980

FIGURE 3 National Health Expenditures By Type Of Expenditure Selected Years 1965 bull 1980

National Health Expenditures

~Hospital Care

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 5

1000

517

245

22

101

114

FIGURE 4

Percentage Shares of Expenditures for Personal Health Care 1965-1980

Consumer Direct Payments

v Private Health Insurance

----------------------------shy---------------------------------------------shyv---------- --------shy Other Private Third Parties

Federal Government

--------------------------------------------------------------------------------------------------------------shyStateLocal Government

1000

324

266

13

287

110

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 6

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

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Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

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TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 2: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

FIGURE 1 The National Health Dollar in 1980

Federal Funds Hospital care

Personal Health

Public Funds Pn~ate Health

Insurance Benefits and Other Private

Other Personal

Funds Other Nauonal

Heallh Expendrtures

Private Funds StateLocal Funds

Physicians Services

Consumer~= Health Care

Nursing Home Care Direct Payments

Where It Comes From Where II Goes

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 2

Health Care Expenditures in 1980

The most notable aspect of health care spending in 1980 was its accelerated growth The 152 percent Inmiddot crease In overall health expenditures Is the highest in the last 15 years and is substantially above the 134 percent growth rate between 1978 and 1979 This Inmiddot crease occurred at a time when the overall economy grew by 88 percent Thus the share of the GNP ocmiddot cupied by health care spending spurted from 89 permiddot cent in 1979 to 94 percent in 1980 (See Figure 2)

Reasons for Interest in Health Care Spending

Health care expenditure has received an Increasing amount of national attention over the last few years for a number of reasons First the health care Inmiddot dustry has grown rapidly relative to the US economy In general Not only has the output of the health secshytor accounted for an increasing share of the nations output health care is among the top five industries in the country by standards of payrolls or full-timeshyequivalent employment Second the prices of health care goods and services are widely perceived to be growing at a rate faster than that of other consumer prices a perception that was generally accurate prior to 1980 (See Figure 2) Third personal health has become a subject of greater interest to many people in recent years physical well-being and its attainment having become a common subject of discussion Fourth a large portion of the Federal budget Is tied to health care expenditures The Medicare program In particular finances specific levels of health care with minimal control over the cost of services involved Reducing the growth of Federal spending requires controlling the outlay for health care without comshypromising the quality of benefits provided

Recent Developments In Health Care Spending

Spending patterns show little change over the last three years except for a weak trend toward relatively more hospital and nursing home care Nor has there been much change in the way in which health care is financed What has changed is the rate of growth of health care spending Over the last three years the percentage change in expenditures for health care has Increased steadily and has exceeded the growth rate for the GNP Further the rate of growth in expenditures is greater than can be explained by price growth and population growth combined there has been an increase In the rate of growth of use of services per capita and In the inshytensity of services provided - the number and types of procedures performed during a contact with a health care provider We will discuss these and other matters later in this article

Trends In Health Care Spending Between 1965 and 1980

Over the last 15 years health care expenditures have grown at an average annual rate of 126 percent Spending patterns have changed considerably (Figure 3) as relatively more has been spent on hospital and nursing home care and a smaller percentage on drugs and construction of medical facilities This can be exshyplained by examining some changes In the health care system First the introduction of major public financshyIng programs Including Medicare and Medicaid as well as increases in the scope of private health inshysurance coverage has encouraged use of acute care and long-term care facilities by making their services affordable to large segments of the population previously shut out of the market by price considerashytions Further drug prices remained relatively stable during this time period so that increases in the quanshytity of drugs consumed did not translate into expenshyditure growth to the same extent as Increases in other health care goods and services The relative decline of construction as a part of health care spending can be attributed to the emergence of excess beds In many parts of the US (due in part to the higher levels of construction in the 1950s and 1960s) the end of government construction subsidies and the increasshyIng cost of borrowing funds

Even more dramatic than shifts in utilization patterns however has been the shift in sources of funds for health care spending (Figure 4) The advent of Medicare and Medicaid transferred much of the burden of hospital costs and some of the burden of nursing home care from private payers to the government Private health insurance greatly expanded Its coverage of drug purchases and of dental care with corresponding decreases In the shares borne by consumers

Classification of Health Care Goods and Services

For the sake of discussion the types of health care purchased In the US can be divided into three broad types personal health care other services related to current health care and expenditures for research and construction Within each broad category further distinctions are made among types of goods and sershyvices provided

National health expenditures comprise all spendmiddot ing for health care of individuals plus the adminisshytrative costs of non-profit and government health proshygrams the net cost to consumers of private health insurance government expenditures designed to proshymote health in general non-profit health research and construction of medical facilities (See the section on definitions concepts and sources later in the article) The expenditures exclude spending for environmental Improvement a category which is typically categorized with health In Federal budget documents

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 3

p 1 e 15

14

e c

13 0

12

a 11 g e

9 p

80

7 0

6

5

FIGURE 2 National Health Expenditures and Gross National Product Growth and Relative Sizes 1965middot1980

bull middot middot

(Right Scale)

-middot-----middot-middot-middot-middot -middot-middot ---middot-middot-----middotshy -middot National Health Expenditures as

---middot-middot bull middot-middot-middot shy a Percent of GNP ---middot shy Growth in National Health Expenditures

Growth in the Gross National Product

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

(left Scale) ~ p

e

c e 0

a 109

9 e

8 p

7 0

6 0

5

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 4

B

i 0

n s

0

f

D 0

I

a r s

1965 1970 1975 1980

FIGURE 3 National Health Expenditures By Type Of Expenditure Selected Years 1965 bull 1980

National Health Expenditures

~Hospital Care

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 5

1000

517

245

22

101

114

FIGURE 4

Percentage Shares of Expenditures for Personal Health Care 1965-1980

Consumer Direct Payments

v Private Health Insurance

----------------------------shy---------------------------------------------shyv---------- --------shy Other Private Third Parties

Federal Government

--------------------------------------------------------------------------------------------------------------shyStateLocal Government

1000

324

266

13

287

110

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 6

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

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Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

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TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 3: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

Health Care Expenditures in 1980

The most notable aspect of health care spending in 1980 was its accelerated growth The 152 percent Inmiddot crease In overall health expenditures Is the highest in the last 15 years and is substantially above the 134 percent growth rate between 1978 and 1979 This Inmiddot crease occurred at a time when the overall economy grew by 88 percent Thus the share of the GNP ocmiddot cupied by health care spending spurted from 89 permiddot cent in 1979 to 94 percent in 1980 (See Figure 2)

Reasons for Interest in Health Care Spending

Health care expenditure has received an Increasing amount of national attention over the last few years for a number of reasons First the health care Inmiddot dustry has grown rapidly relative to the US economy In general Not only has the output of the health secshytor accounted for an increasing share of the nations output health care is among the top five industries in the country by standards of payrolls or full-timeshyequivalent employment Second the prices of health care goods and services are widely perceived to be growing at a rate faster than that of other consumer prices a perception that was generally accurate prior to 1980 (See Figure 2) Third personal health has become a subject of greater interest to many people in recent years physical well-being and its attainment having become a common subject of discussion Fourth a large portion of the Federal budget Is tied to health care expenditures The Medicare program In particular finances specific levels of health care with minimal control over the cost of services involved Reducing the growth of Federal spending requires controlling the outlay for health care without comshypromising the quality of benefits provided

Recent Developments In Health Care Spending

Spending patterns show little change over the last three years except for a weak trend toward relatively more hospital and nursing home care Nor has there been much change in the way in which health care is financed What has changed is the rate of growth of health care spending Over the last three years the percentage change in expenditures for health care has Increased steadily and has exceeded the growth rate for the GNP Further the rate of growth in expenditures is greater than can be explained by price growth and population growth combined there has been an increase In the rate of growth of use of services per capita and In the inshytensity of services provided - the number and types of procedures performed during a contact with a health care provider We will discuss these and other matters later in this article

Trends In Health Care Spending Between 1965 and 1980

Over the last 15 years health care expenditures have grown at an average annual rate of 126 percent Spending patterns have changed considerably (Figure 3) as relatively more has been spent on hospital and nursing home care and a smaller percentage on drugs and construction of medical facilities This can be exshyplained by examining some changes In the health care system First the introduction of major public financshyIng programs Including Medicare and Medicaid as well as increases in the scope of private health inshysurance coverage has encouraged use of acute care and long-term care facilities by making their services affordable to large segments of the population previously shut out of the market by price considerashytions Further drug prices remained relatively stable during this time period so that increases in the quanshytity of drugs consumed did not translate into expenshyditure growth to the same extent as Increases in other health care goods and services The relative decline of construction as a part of health care spending can be attributed to the emergence of excess beds In many parts of the US (due in part to the higher levels of construction in the 1950s and 1960s) the end of government construction subsidies and the increasshyIng cost of borrowing funds

Even more dramatic than shifts in utilization patterns however has been the shift in sources of funds for health care spending (Figure 4) The advent of Medicare and Medicaid transferred much of the burden of hospital costs and some of the burden of nursing home care from private payers to the government Private health insurance greatly expanded Its coverage of drug purchases and of dental care with corresponding decreases In the shares borne by consumers

Classification of Health Care Goods and Services

For the sake of discussion the types of health care purchased In the US can be divided into three broad types personal health care other services related to current health care and expenditures for research and construction Within each broad category further distinctions are made among types of goods and sershyvices provided

National health expenditures comprise all spendmiddot ing for health care of individuals plus the adminisshytrative costs of non-profit and government health proshygrams the net cost to consumers of private health insurance government expenditures designed to proshymote health in general non-profit health research and construction of medical facilities (See the section on definitions concepts and sources later in the article) The expenditures exclude spending for environmental Improvement a category which is typically categorized with health In Federal budget documents

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 3

p 1 e 15

14

e c

13 0

12

a 11 g e

9 p

80

7 0

6

5

FIGURE 2 National Health Expenditures and Gross National Product Growth and Relative Sizes 1965middot1980

bull middot middot

(Right Scale)

-middot-----middot-middot-middot-middot -middot-middot ---middot-middot-----middotshy -middot National Health Expenditures as

---middot-middot bull middot-middot-middot shy a Percent of GNP ---middot shy Growth in National Health Expenditures

Growth in the Gross National Product

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

(left Scale) ~ p

e

c e 0

a 109

9 e

8 p

7 0

6 0

5

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 4

B

i 0

n s

0

f

D 0

I

a r s

1965 1970 1975 1980

FIGURE 3 National Health Expenditures By Type Of Expenditure Selected Years 1965 bull 1980

National Health Expenditures

~Hospital Care

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 5

1000

517

245

22

101

114

FIGURE 4

Percentage Shares of Expenditures for Personal Health Care 1965-1980

Consumer Direct Payments

v Private Health Insurance

----------------------------shy---------------------------------------------shyv---------- --------shy Other Private Third Parties

Federal Government

--------------------------------------------------------------------------------------------------------------shyStateLocal Government

1000

324

266

13

287

110

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 6

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

Qgt -

bullm gtbulln gtbullm ~ z gtz Q z 0

bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 4: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

p 1 e 15

14

e c

13 0

12

a 11 g e

9 p

80

7 0

6

5

FIGURE 2 National Health Expenditures and Gross National Product Growth and Relative Sizes 1965middot1980

bull middot middot

(Right Scale)

-middot-----middot-middot-middot-middot -middot-middot ---middot-middot-----middotshy -middot National Health Expenditures as

---middot-middot bull middot-middot-middot shy a Percent of GNP ---middot shy Growth in National Health Expenditures

Growth in the Gross National Product

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

(left Scale) ~ p

e

c e 0

a 109

9 e

8 p

7 0

6 0

5

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 4

B

i 0

n s

0

f

D 0

I

a r s

1965 1970 1975 1980

FIGURE 3 National Health Expenditures By Type Of Expenditure Selected Years 1965 bull 1980

National Health Expenditures

~Hospital Care

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 5

1000

517

245

22

101

114

FIGURE 4

Percentage Shares of Expenditures for Personal Health Care 1965-1980

Consumer Direct Payments

v Private Health Insurance

----------------------------shy---------------------------------------------shyv---------- --------shy Other Private Third Parties

Federal Government

--------------------------------------------------------------------------------------------------------------shyStateLocal Government

1000

324

266

13

287

110

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 6

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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bullm gtbulln gtbullm ~ z gtz Q z 0

bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

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~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 5: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

B

i 0

n s

0

f

D 0

I

a r s

1965 1970 1975 1980

FIGURE 3 National Health Expenditures By Type Of Expenditure Selected Years 1965 bull 1980

National Health Expenditures

~Hospital Care

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 5

1000

517

245

22

101

114

FIGURE 4

Percentage Shares of Expenditures for Personal Health Care 1965-1980

Consumer Direct Payments

v Private Health Insurance

----------------------------shy---------------------------------------------shyv---------- --------shy Other Private Third Parties

Federal Government

--------------------------------------------------------------------------------------------------------------shyStateLocal Government

1000

324

266

13

287

110

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 6

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

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~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 6: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

1000

517

245

22

101

114

FIGURE 4

Percentage Shares of Expenditures for Personal Health Care 1965-1980

Consumer Direct Payments

v Private Health Insurance

----------------------------shy---------------------------------------------shyv---------- --------shy Other Private Third Parties

Federal Government

--------------------------------------------------------------------------------------------------------------shyStateLocal Government

1000

324

266

13

287

110

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Calendar Year

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 6

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

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~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 7: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

Personal Health Care

A total of $2179 billion was spent for personal health care in 1980 up 152 percent from spending In 1979 Personal health care expenditures accounted for 882 percent of all national health expenditures On a per capita basis $941 was spent in 1980 an Increase of 139 percent from the 1979 level

One perspective on these expenditures is to comshypare them to personal income one component of the GNP and the best approximation of the resources from which personal health care spending must be paid As shown in Table A personal health care exshypenditures have consumed an increasing portion of personal Income over the last 15 years when viewed in current dollars However when price inflation Is taken into account it appears that the share of pershysonal purchasing power used for consumption of health care has not risen as much as indicated by the dollar figures This observation is consistent with the economic theory that consumer demand for health care is not very sensitive to relative price Inflation The sudden Increase in 1980 of the share of personal income accounted for by personal health care expenshyditures reflects a similar movement in the relation of national health expenditures and the GNP and is exshyplained by the relative independence of health care spending and wage and salary income Medical benefits often extend into periods of unemployment and much of personal health care spending is fishynanced by transfer payments from the public sector to the private sector

The growth of personal health care expenditures beshytween 1965 and 1980 is attributable to three causes as shown in Figure 5 Approximately 58 percent of the average annual growth is due to price Inflation as measured by the fixed-weight price index for personal health care Another 9 percent of the annual growth In

personal health care expenditures is due to increases in the population of the United States The remaining 34 percent is due to changes in the mix of health goods and services purchased in the frequency with which people consume those goods and services and In the Intensity of care - the number of kinds of proshycedures performed during a visit to the physician for example This intensity factor comes close to embodyshying quality of care an issue that has been argued repeatedly (and without resolution due mainly to the lack of information and to a lack of consensus on what contltutes quality)

Physicians Services

Physicians are the most Influential group in the health care sector With the majority operating In private practice they affect health spending levels to a much greater extent than is indicated by the 189 percent share of spending devoted to their services By one estimate (Blumberg 1979) physicians influshyence over 70 percent of personal health care spendshying The significant decisions in determining who will be hospitalized and the type and quantity of services that will be provided are made by physicians and the level of expenditures for prescription drugs is inshyfluenced similarly

Expenditures for physicians services reached $466 billion in 1980 an increase of 145 percent from the previous year This spending accounted tor 214 pershycent of personal health care expenditures and tor 189 percent of all national health expenditures Price inflashytion and increased Intensity of services were responsishyble for most of the growth In expenditures Public funds - mostly Medicare and Medicaid - paid for over one-quarter of spending for physicians services private health insurance and direct consumer payments spilt the remainder almost evenly

TABLE A Personal Health Care Expenditures In Current and Constant Dollars

Levels and as a Percentage of Personal Income 1965middot1980

Current Dollars Constant Dollars Implicit Price

Percentage Billions Percentage Deflator for Billions of of of Personal Health

of Personal 1977 Constant-Dollar Care Expenditures Year Dollars Income Dollars Personal Income (1977 - 1000)

464 1965 $ 36 66 $77 79 1970 65 80 106 87 613 1975 117 92 137 97 851 1976 132 95 142 97 926 1977 149 97 149 97 1000 1978 167 97 154 96 1081 1979 189 97 160 96 1181 1980 218 101 166 99 1313

Constant-dollar personal income is the ratio of personal income and the implicit price deflator for personal consumption expenditures (scaled so that 1977 is the base year)

Source Health Care Financing Administration based on data from the Bureau of Economic Analysis (US Commerce Department)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 7

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

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~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 8: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

8

0

n s

0

D 0

a r s

FIGURE 5

Factors in the Increase of Personal Health Care Expenditures 1965middot1980

Increment Attributable to Population Growth

Increment Attributable to Medical Care Price Growth Increment Attributable to Factors Other Than Price or Population

Base Year Expenditures

82 487

325

$42

1965 1970 1975 1980

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 8

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

Qgt -

bullm gtbulln gtbullm ~ z gtz Q z 0

bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

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Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

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Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

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~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

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i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 9: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

In the National Health Accounts expenditures for physicians services encompass the cost of all sershyvices and supplies provided in physicians offices exshypenditures for services of private practitioners in hospitals and other Institutions and physician-ordered diagnostic laboratory work in independent clinical laboratories

Price Inflation was a significant contributor to the growth of expenditures for physicians services Measured by the Consumer Price Index (CPI) physishycians fees rose 106 percent In 1980 more slowly than either hospital prices or consumer prices in general Prior to 1980 however the physician fee CPI typically rose at least as fast If not faster than either of the other two Indexes mentioned

The number of office consultations has not had much effect upon the growth of spending for physishycians services The total volume and per capita number of physician office consultations have changed very little in recent years For example the National Center for Health Statistics (NCHS) Health Inshyterview Survey shows that physician consultations per capita for the non-Institutional population remained relatively constant at about five per year between 1971 and 1978

Although the number of consultations provided by physicians has not changed the number and types of services provided during the consultations - the inshytensity of care - appear to be increasing steadily For example the number of surgical operations grew from 72 operations per 100 persons in 1972 to 86 per 100 in 1980 an average annual increase of 22 percent In 1979 and 1980 the rate of growth was about 28 pershycent annually Rising surgical rates and Increased outshyof-hospital laboratory testing have contributed to the increase in intensity of care per physician visit and thus to rising expenditures for physician care

Hospital Care

Expenditures for hospital care In 1980 were $996 billion an increase of 162 percent from 1979 Hospital care accounted for 457 percent of total personal health care expenditures and tor 403 percent of nashytional health expenditures As was true for all of the categories of health care services price inflation was responsible for the major part of the increase in spending between 1979 and 1980 but 1980 was also a period of remarkable growth In the use of hospital sershyvices The Federal government funded 415 percent of spending for hospital care In 1980 private health inshysurance paid for 352 percent and State and local government funded 130 percent Thus consumers paid less than one-tenth of the cost of hospital care directly

In the National Health Accounts hospital care inshycludes all Inpatient and outpatient care In public and private hospitals and all services and supplies providshyed by hospitals Expenditures for physicians services rendered in hospitals are excluded except for the sershyvices of hospital staff members

Over the last 30 years the hospital sector has undergone substantial changes In structure There has been long-term growth of non-Federal short-term general hospitals and a pronounced decline in the

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

number of non-Federal psychiatric hospitals Between 1950 and 1979 short-term general hospitals doubled their share of total hospital expenses (to 80 percent) and their share of Inpatient days (to 70 percent) Durshying the same period the share of inpatient days acshycounted for by psychiatric hospitals tell from almost one-half to less than one-fifth mostly as a result of deinstitutionalization of patients (made possible in part by the development of new drugs) Because psyshychiatric hospitals are typically run by State or local governments the relative decline of such hospitals is mirrored in the decline of State and local government funds as a source of payment for hospital care

As mentioned earlier price inflation was responsishyble for a major portion of the accelerated increase in hospital expenditures In 1980 The Health Care Financshying Administration (HCFA) has developed a fixedmiddot weight index to measure the prices of goods and sershyvices used by hospitals in providing services This Nashytional Hospital Input Price Index (Freeland and Schendler 1980) rose 119 percent in 1980 a more rapid rate of inflation than exhibited by the GNP fixedshyweight price index Growth in the hospital price Index was due in large part to an 11 percent increase in hospital wage rates and was affected by rising energy prices as well Using that index as an approximation of prices faced by hospitals over 70 percent of the growth in expenditures can be attributed to input price inflation

Increased use of hospital facilities accounted tor over one-fifth of the Increased growth of spending for hospital care Inpatient days In community hospitals were 36 percent greater than in the previous year the highest annual increase since the implementation of Medicare and Medicaid in 1966 This rapid rise prishymarily reflects use by persons age 65 and older who accounted for about three-fourths of the increase in community hospital Inpatient days between 1979 and 1980 Higher rates of hospital use by the aged are related to influenza epidemics In the winters of 1979-1980 and 19801981 and to a severe heat wave in the summer of 1980 which increased both the morshybidity and mortality rates of older persons

As a result of the rapid Increase In days of care and a relatively slower rate of increase in available hospital beds average occupancy rates which had declined from nearly 79 percent in 1969 to 74 percent In 1978 rose to about 76 percent in 1980

Nursing Home Care

Nursing home care cost $207 billion in 1980 an inshycrease of 166 percent from 1979 This spending acshycounted for 95 percent of personal health care expenshyditures and 84 percent of total national health expenditures Major contributors to the growth of spenshyding in this category include rapid expansion of inshytermediate care facilities for the mentally retarded (ICFshyMR) funded by Medicaid as well as growth of prices and days of care Public programs pay for a little more than a half of the total and consumers finance most of the rest directly

In the National Health Accounts nursing home sershyvices are those provided in skilled nursing facilities (SNFs) In intermediate care facilities (ICFs) and In

9

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 10: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

personal care homes which provide nursing care The relatively small amount of nursing home-type care providmiddot ed in hospitals is included with expenditures for hospital care

Increasing longevity changing social patterns of family responsibility for the elderly and the availabllmiddot ity of funding from public programs (primarily Medimiddot caid) provide greater Incentive for Institutionalization and underlie much of the growth in nursing home care Excluding the special Medicaid ICFmiddotMA category mentioned earlier spending for other nursing home care almost doubled between 1975 to 1980 growing from $98 billion to $190 billion During that five year period prices paid by nursing homes tor the goods and services needed to provide care Increased at an average annual rate of 87 percent We estimate that nursing home days of care Increased In excess of 3 percent annually while the US population age 65 and over increased 27 percent per year In 1980 input prices increased 101 percent (higher than the average rate for 1975 to 1980) while growth In the number of days of care provided (about 3 percent) was lower than the five year average The net effect of these changes was that spending for nursing home care while growmiddot ing at a rapid 166 percent rate began to show signs of diminishing growth

Drugs and Medical Sundries

This category accounted for 8 percent of national health expenditures ($192 billion) in 1980 This figure includes spending for prescription drugs over-themiddot counter drugs and medical sundries dispensed through retail channels Expenditures for drugs purmiddot chased or dispensed by hospitals nursing homes other institutions physicians and dentists are excluded

Drugs constitute a significant factor in the treatmiddot ment of illness Fifty-nine percent of physician conmiddot sultations result in at least one prescription for medication About 57 percent of all dollars for drugs and medical sundries are spent for prescription drugs alone and another 31 percent are spent for over-themiddot counter drugs

From 1965to 1980 spending for retail drugs and sundries Increased about 91 percent annually a rate significantly below other major health care services Consequently Its share of health care spending has declined from over 12 percent in 1965 to 78 percent in 1980 However the 119 percent rate of growth in drug spen(ling between 1979 and 1980 may signal the end of that trend

Other Personal Health Care Goods and Services

Expenditures for all other types of personal health care goods and services were $318 billion In 1980 an Increase of 148 percent That spending amounted to about 15 percent of all personal health care expenmiddot ditures and to 13 percent of national health expenmiddot dltures Growth of this composite component was inmiddot fluenced significantly by the growth of spending for dentists services and to some extent by the growth of spending for other professional services About 21

percent of the expenditures in this group of services are financed through government programs and conshysumers pay for another 61 percent directly

These expenditures Include spending for the sermiddot vices of dentists and dental laboratories They also inmiddot elude spending for services of other health profesmiddot sionals (including most home health agencies) for eyeglasses and orthopedic appliances and for promiddot viding care in Industrial settings

Spending for dentists services which reached $158 billion in 1980 increased not only because of relamiddot lively rapid price Inflation but also because of recent increases in the extent of third-party dental coverage Traditionally use of dental services fluctuated with the business cycle However despite a 12 percent Inmiddot crease in the CPI for dental care in 1980 (caused by higher labor wage rates and by higher gold and silver prices) and a slump in the general economy pricemiddot deflated expenditures per capita tor dental services increased This departure from tradition Is probably due to the Increased extent of third-party dental coverage especially to the expansion of the share of total expenditures for dentists services assumed by private health insurance from 2 to 21 percent between 1965 and 1980 Not only are more people now covered by some form of dental insurance but the extent of the insurance has increased as well

Other Health Expenditures for Current Services

Expenditures for health care which were not for permiddot sonal care but which dealt with current health services were $177 billion in 1980 up 165 percent from 1979 these expenditures amounted to 7 percent of namiddot tiona health expenditures The expenditures were for one of three types of services the net cost of private health insurance the administration of government and philanthropic health programs and government programs to advance the general health of the population

The growth patterns of these different expenditures vary considerably The administration component has risen as a fairly constant proportion of total public benefit payments Expenditures tor government public health activities (such as the Center for Disease Conmiddot trol) have been growing at high but diminishing rates The net cost of private health insurance - the difmiddot terence between premiums earned and claims incurmiddot red by private health insurers - has fluctuated conmiddot siderably (Carroll and Arnett 1981)

Other National Health Expenditures

National health expenditures devoted to developmiddot ment of the health care sector were $116 billion in 1980 an amount equal to 47 percent of total health care spending This spending went for non-profit research and for construction of medical facilities

The $54 billion spent for research in the National Health Accounts excludes research performed by drug companies and by other manufacturers and suppliers of health care goods and services (an estimated $18 billion in 1978) The reason for the exclusion is thai it is assumed that the research is funded from sales of the good or service so that it is already considered in total expenditure estimates In 1980 6 percent of

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 10

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

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TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

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bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

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Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

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Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

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TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 11: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

research was performed by private non-profit organishyzations and most of the remainder was perfored by the Federal government

Of the $61 billion spent on construction of medical facilities 355 percent was funded from public sources Grants from philanthropic organizations fundshyed 73 percent and the remainder came from internal funds or from the private capital market This estimate does not include spending for capital equipment since there is no source of data to yield a reliabl~ consistent time series of data on spending for eq~ipshyment

The Health Care Market

The health care market is atypical of the perfect market for goods and services envisioned by standard economic theory More than any other market it is dominated by third-party payers that is by persons or organizations who purchase care on behalf of those who consume it In 1980 two-thirds of personal health care expenditures were made by the government or by private health Insurance To that extent consumers of health care tend to be isolated from the true price of health care and tend to consume more care than they would were they to pay directly the full price of the goods and sershyvices they receive The predominance of third-party payers affects not only aggregate demand in the health care market Providers of care who are paid under costshybased reimbursement or fee-for-service mechanisms have less incentive to provide cost-effective care because of a general lack of price competition One theory Is that It Is this market structure that has conshytributed to excessive growth of health care expenditures

A second sense in which the health care market diverges from the perfect market of economic theory Is that unlike consumers in most other markets the consumers of health care lack full information when decisions are made to purchase health care For examshyple hospital admission Is usually made upon the decishysion of a seller of health care (a physician) rather than by the consumer of hospital services (the patient) or by the pur_chaser of the service (the government private health msurers or the patient) Whether that patient would choose the same types and quantities of care if he or she had complete Information is an issue yet to be answered empirically To the extent that the patient would not make the same choices the industry plays a major role in determining Its sales

A corollary to these theories Is that the absence of the usual market forces limiting health care expenshyditures may generate political (non-market) bargaining between payers and providers where the government Is the payer this takes the form of regulation or rate-setting (Feder and Spitz 1980) In practice those parts of the health care sector In which government pays the highest proportion of costs (hospitals for example) are also parts of the sector with the greatest degree of cost regulation

Financing Health Care

Unlike other goods or services for which the consumer pays the provider directly health care payments often

are handled by a financial agent - a third party In 1980 676 percent of the funds spent for personal health care were supplied by third parties principally by private health Insurers and by public agencies acting as insurers (Figure 6) The details of the payment method may vary the consumer may pay the provider and apply for reimbursement from the third party the provider may bill the third party directly or the provider may be employed by the third party (as in the case of Defense Department hospitals for example) In the case of Medicare providers bill fnanclai Intermediaries private health insurers actmg as agents for the Federal government

The history of third-party payment for the provision of health care can be divided into three eras Prior to World War II there was little third-party activity in the market except for philanthropic organizations The second era comprised the expansion of private health insurance from the end of the Second World War through 1965 The third era began with the implemenshytation of the Medicare and Medicaid programs in 1966

Private Health Insurance

In 1980 private insurers - Blue Cross and Blue Shield plans commercial insurance companies and Independent plans - paid benefits of $581 billion 266 percent of personal health care expenditures In 1979 (the latest year tor which such data are available) approximately 171 million persons 76 percent of the US population were covered by private health inshysurance for hospital care

The premiums collected by private health Insurers norshymally exceed the amounts paid out In benefits to cover the administrative cost of paying claims to maintain apshypropriate and required reserves against future claims and in the case of for-profit companies to return a proshyfit The difference between the premiums and benefit payments the net cost Is included in the national health expenditure estimates under Expenditures for Prepayment and Administration It is not classified In personal health care A total of $649 billion in premiums was collected in 1979 from which $581 billion was paid In benefits The remaining $68 billion represented the net cost Premiums payments amounted to 26 percent of all national health spending (See Carroll and Arnett 1981 for a detailed discussion of the private health Insurance sector)

Consumer expenditures for health care represent that portion of the health care dollar that is not fl nanced by public programs or paid by philanthropy or industry It Is the share that is potentially Insurable through private health insurance In 1980 consumer expenditures for personal health care were $1287 billion and 45 percent was covered by insurance benefits This percentage has increased significantly from 32 percent In 1965

Only a very small portion of the population has the financial resources to afford the private medical care associated with major illness This was noted in 1929 by the Committee on the Costs of Medical Care (Falk et af 1933) and Is still true today Faced with this problem there are strong incentives for the prepayshyment and risk-sharing offered by private health inshysurance By 1950 9 percent of personal health care

HEALTH CARE FINANCING RIVIEWSEPTEMBER 1981 11

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

Qgt -

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bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 12: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

FIGURE 6 Selected Types of Personal Health Care Spending By Source of Funds 1980

B

0

n s

0

f

D 0

I

a r s

Direct Consumer Payments

Private Health Insurance and Other Private Funds

$47

$21

$51

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 12

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

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Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

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Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

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TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 13: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

was financed through private health insurance Private health insurance expanded rapidly in the 1950s by 1960 the financing share had more than doubled to 21 percent In 1965 25 percent of personal health care expenditures were covered by private insurance With the enactment of Medicare and Medicaid in 1965 government expenditures began to increase signifishycantly and the growth of the insurance share began tslow In the last few years It has stabilized at about 27 percent

Private health Insurance coverage varies by type of care Hospital care was the first type of service to be covered extensively by insurance In 1960 private inshysurance covered 36 percent of hospital care expenshyditures That share reached 42 percent by 1965 When Medicare and Medicaid were established in 1966 hospital care spending Increased dramatically and theportion paid by private insurance dropped to less than 34 percent by 1967 It has remained between 33 and 36percent since that time

Extension of coverage beyond surgical procedures in recent years has led to a higher share of physishycians services being reimbursed by private insurance This share rose from 32 percent in 1965 to 36 percent in 1980 For other health care services insurance coverage has been extremely limited Dental care represents one service where coverage is growing Enrollment for dental benefits rose over 50 percent between 1976 and 1979 to a total of 603 million pershysons Insurance paid for about 21 percent of all dental expenditures in 1980

Public Expenditures

Government programs spent $864 billion and proshyvided 397 percent of personal health care spending in 1980 Federal funds provided $625 billion more than two-thirds of the public outlay State and local governshyments provided the remaining $239 billion

The two largest government programs which financehealth care are Medicare and Medicaid Together the two programs paid $606 billion in benefits in 1980bull fimiddotnancing nearly 28 percent of all personal health care expenditures and accounting for over two-thirds of all public spending for personal health care About oneshyfifth of the US population (47 million people) is covered by Medicare andor Medicaid in 1977 the adshyministration of these two programs was consolidated under HCFA in what is now the Department of Health and Human Services (DHHS)

Medicare and Medicaid have dramatically altered the nature of public spending since 1965 At that timethe Federal government and State and local governmiddot ments shared almost equally in spending for personal health care- with 101 and 114 percent respectivelyBy 1980 the Federal portion had increased to 287 pershycent while the State and local share remained nearly unchanged at 110 percent

This figure does not include $328 million paid by the Medicaid program to purchase Medicare Part B coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and Medicare exshy

o

penditure but is deducted from the combined figure

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Because of the orientation of Medicare and Medicaid toward hospital care public spending for hospital care jumped from 389 to 548 percent of the total between 1965 and 1967 Since 1967 that share has changed very little The public share of spending for physicians services has more than tripled since 1965 reaching 264 percent in 1980 due in part to the coverage by Medicare of the aged some disabled workers and persons with end-stage renal disease

Medicare

Nearly 29 million persons 90 percent of whom are 65 or older are enrolled under the Medicare program In 1980 program expenditures totaled $367 billion of which $356 billion were benefit payments An average of $2064 per person was paid In 1980 for the approxmiddot imately 173 million persons receiving benefits Medicare spending for personal health care increased 214 percent in 1980 compared to an increase of 152 percent in total personal health care expenditures The primary reason for this increase is the rapid escalation of outlays for hospital care

In 1980 Medicare spent an amount equal to 412 percent of all public funds for personal health care and equal to 163 percent of total spending for permiddot sonal health care Almost three-quarters of Medicare benefits are for hospital care another fifth pays for physicians services

Medicare (Title XVIII of the Social Security Act) was implemented July 1 1966 as a Federal insurance proshygram to protect the elderly from the high cost of health care Rather than providing medical care directmiddot ly Medicare was intended to reimburse for care received from private sector providers In July 1973 coverage was extended to permanently disabled workers and their dependents eligible for Old Age Survivors Disability and Health Insurance (OASDHI) benefits and to persons with end-stage renal disease

Unlike other Federal programs Medicare is not financed solely by general revenues The Hospital Inshysurance (HI or Part A) program is financed largely through a payroll tax on employers and employees The Supplemental Medical Insurance (SMI or Part B) program is financed through premium payments and general revenues The general revenue share of Part B funding has grown significantly from about 50 pershycent in 1972 to 68 percent in 1979 By law SMI premiums may not increase more than the Increase in monthly cash retirement and survivor benefits under the social security programs SMI benefit payments have grown faster than premium receipts requiring a proportionately greater amount of general tax revenues to maintain the trust fund

Nearly all Medicare HI hospital benefits are for care In community hospitals In fiscal year 1980 Medicare payments per short-stay inpatient day of care increased over 12 percent about the same rate as commiddot munity hospital expenses per inpatient day However total Medicare hospital outlays grew faster than commiddot munity hospital expenses Days of care provided to pershysons age 65 and older increased faster than days of care provided to persons under age 65 and almost all persons 65 and older are enrolled in the Medicare HI program

13

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

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~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

~

~~m ~m ~bull mbull -bull bull

State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

~ 0bullbullm

z ~

~ bull ~

i m ~ m c w mbullbull~

TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 14: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

Medicare outlays for physiciansmiddot services also inmiddot creased as a share of total physician expenditures in 1980 related in part to increased hospitalization rates for Medicare beneficiaries (especially aged beneficiaries) Allowed charges for physician services in hospitals (which Include Medicare reimbursements deductibies and coinsurance) account for an lncreasmiddot lng percent of all allowed physician charges under Medicares Part B program Between 1971 and 1977 charges for physician services to aged beneficiaries on an inpatient basis Increased gradually from 57 to 61 permiddot cent of all allowed physician charges a trend which promiddot bably continued through 1980

Medicare payments for SNF care as a percent of total nursing home revenues have declined in recent years In 1968 Medicare provided over one-tenth of total nursing home revenues By 1980 that share had dropped to 2 percent Most of the decrease occurred between 1969 and 1971 following a policy decision to strictly define Medicare nursing care coverage

Medicare reimbursement for home health agency sermiddot vices has grown significantly Home health care costs In fiscal year 1980 were $750 million compared to $382 million for SNF care In contrast Medicare spent $60 million for home health care In fiscal year 1968 commiddot pared to $344 million for SNF care Nine-tenths of Medicare payments for home health agency care are inmiddot eluded In other professional services The remiddot mainder which are for care provided by hospital-based agencies are reported under hospital care

Medicaid

In 1980 Medicaid paid $253 billion In combined Federal and State funds to provide benefits equal to 116 percent of personal health care spending Medicaid expenditures were 169 percent higher than in 1979 and averaged $1165 for each of the programs 22 million recimiddot plants Hospital care and nursing home care each acshycounted tor more than a third of program benefit expenmiddot ditures

Medicaid was established in 1966 by Title XIX of the Social Security Act as a joint Federal-State program to provide medical assistance to certain categories of low-income persons These include aged blind and disabled persons or members of families with depenmiddot dent children The program Is State-administered and provides Federal matching grants for a portion of the cost of providing medical benefits to the categorically eligible In addition if the State chooses Federal matching funds are available for medical benefits tor the medically needy - persons In one of the qualimiddot tying categories who have incomes too high for cash assistance but not adequate to pay their medical bills

The Federal share of Medicaid payments in a given State is derived from a formula based on the States per capita income The Federal contribution ranges from 50 to 78 percent currently averaging 545 percent nationwide The Federal share of Medicaid dropped over two percentage points since 1977 so that the State share of Medicaids financial obligations has Inmiddot creased This decline Is due In part to the revisions in formula match ratios which occur every two years (the latest is for fiscal year 1980) and in part to the changmiddot lng proportion of each States Medicaid spending of the national total

The Medicaid program has a stronger orientation toward long-term non-acute Institutional care than does the Medicare program Long-term care encommiddot passes care through home health agencies nursing facilities and mental hospitals Long-term care benefit expenditures amounted to almost half of all 1980 Medicaid program spending These expenditures inmiddot eluded payments to psychiatric hospitals amounting to 12 percent of all Medicaid Inpatient hospital expenmiddot ditures Nursing facility expenditures include spendmiddot lng in SNFs ICFs for the mentally retarded and all other Intermediate care facilities Excluding payments for ICFs for the mentally retarded Medicaid nursing home payments comprised about 42 percent of regular spending for nursing home care in recent years By far the fastest growing segment Is intermediate care for mentally retarded (ICFmiddotMA) which accounted for 166 percent of Medicaid nursing facility expenditures in 1980 Spending for ICFmiddotMR care Increased 34 permiddot cent between fiscal years 1979 and 1980 reaching a level of $23 billion some of which is hospital-based and reported as such

Other Public Program Expenditures

State spending for medical care for the poor who are not eligible for Medicaid and State spending which is not eligible for Federal matching funds are classified as Other Public Assistance Payments for Medical Care In 1980 this spending amounted to $16 billion

in addition a large public contribution to health spending comes from State and local government outlays In their own hospitals State and local governmiddot ments spent $60 billion in 1980 for hospital care in excess of reimbursements received from public and private sources

Other significant contributors to public spending for personal health care are workers compensation promiddot grams which accounted for 45 percent of all public spending the Veterans Administration accounting for 67 percent and the Department of Defense accountmiddot ing for 49 percent

Other Public Expenditures for Personal Health Care shown in Table 7 Include spending by a number of public programs not detailed In this article These include maternal and child health programs $714 million medical payments under vocational rehabilitation $277 million temporary Clsablt inmiddot surance $63 million Public Health Service activities $1158 million Indian Health Services $384 million and Alcohol Drug Abuse and Mental Health Admiddot ministration $791 million

Philanthropy and Industrial lnmiddotplant

Some health care is provided to Industrial employees through in-plant health services Expenmiddot ditures for these services classified under other health services are estimated at $14 billion for 1980 Private philanthropic organizations funds for personal health care are classified by type of care and totaled over $14 billion in 1980 Administrative and fundmiddot raising expenses of private charities are classified with expenses for prepayment and administration

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 14

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

Qgt -

bullm gtbulln gtbullm ~ z gtz Q z 0

bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

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~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

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Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

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TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 15: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

whHe philanthropic support of research and construcshytion is included with the respective expenditure categories

Direct Payments

The portion of personal health care expenditures not paid by third parties is known as direct payments or out-of-pocket costs This amount exshycludes premium payments for Medicare or private health Insurance premiums but does Include deductimiddot ble and coinsurance amounts In 1980 direct payments amounted to $706 billion $305 per person There has been a decline In out-of-pocket payments for health care from a little over one-half of personal health care spending in 1965 to less than one-third in 1980 because of the rapid growth in third-party payments

The share of expenditures borne by the consumer varies enormously by type of service (See Table 6) In 1980 consumers paid only 91 percent of hospital exmiddot pendltures directly and they paid 373 percent of physicians expenditures For dentists however the direct share was 754 percent and tor drugs and drug sundries it was 827 percent As shown in Table 5 the direct payment share for hospital and physicians setmiddot vices has been cut nearly in half since 1965 For all other services however private health insurance and public programs have not assumed as great a share of the burden

Definitions Concepts and Sources of Data

The estimates in this article are presented within the framework of the National Health Accounts of the United States This framework provides a more definishytive picture of health care spending than do other namiddot tiona estimates such as the National Income and Product Accounts (the GNP)

Estimates of national health expenditures are comshypiled by type of expenditure (use of funds) and chanshynel of financing (source of funds) In most instances the total level of the expenditures tor each type of setmiddot vice is developed for the nation as a whole estimates for government spending for these services are then subtracted to derive the private contribution The acshycounting framework used for national health expenmiddot dltures identifies each dollar spent for health care and counts it only once as It moves through the US health care system

Revisions

Some estimates published In the 1980 report have been revised in this current report Portions of some time series back to 1965 have been revised to reflect changes in some basic data sources the interpretsmiddot tlon made of them and improvements in methodology

To estimate the expenditures in the National Health Accounts (N HA) series we analyzed a multitude of data sources which reflect spending tor health care and use of health care services Revisions to these estimates are of two types Estimates for the most remiddot

HEALTH CARE RNANCING REVIEWSEPTEMBER 1981

cent two years are revised routinely as they incormiddot porate short-term forecasts of the levels of the prinmiddot cipal data sources described in the final section of this article Second Information from each of the data sources must be reconciled with other related sources before being incorporated Into the NHA accounting framework As a result of this process or with the availability of new or more reliable Information historical series are revised

In this years report estimates of expenditures by private health insurers have been revised back to 1965 mostly to eliminate estimated duplication In premium and benefit payments Hospital expenditure estimates have undergone minor revisions to more accurately reflect the American Hospital Association Annual Survey data when adjusted to a calendar year basis Expenditures for drugs and eyeglasses were adjusted to Incorporate the benchmark revisions made to the National Income and Product Accounts of the US Commerce Department Nursing home expenditures were revised from 1973 forward

Hospital Care

The estimates of expenditures for hospital care are compiled chiefly from data on hospital finances colmiddot iected by the American Hospital Association (AHA) as part of the Annual Survey of Hospitals and the monthly National Hospital Panel Survey The data from the monthly survey are used to project levels of community hospital expenditures for periods more remiddot cent than the latest annual survey and to adjust the annual survey data to correspond to the various time periods for which estimates are made

The composite estimate represents all spending for hospital services in the nation for both inpatient and outpatient care Including all services by hospital staff (including physicians salaried by the hospital) drugs and other supplies Services of self-employed physimiddot clans in hospitals (surgeons for example) are not counted as hospital expenditures Anesthesia and X-ray services are sometimes classified as hospital care expenditures and sometimes as expenditures for physicians services depending on billing practices Spending for hospital-based home health agency sershyvices is included in this estimate

The purpose of this category Is to identify outlays for hospital services rather than the cost of providing such services Total revenue data are used for comshymunity hospitals for other types of hospitals where revenue data are not available total expenses are used Certain adjustments are made in the AHA data additions are made to allow for a small number of hasmiddot pitals not included in the national totals for Federal hospitals estimates are based on figures obtained from the responsible agencies

Nursing Home Care

Expenditures for nursing home care encompass spending in all facilities or parts of facilities providing some level of nursing care (As an exception hospitalmiddot based long-term care is included with hospital expenmiddot ditures) Included are all nursing homes certified by Medicare andor Medicaid as SNFs those certified by

15

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

Qgt -

bullm gtbulln gtbullm ~ z gtz Q z 0

bullm s m

~ m ~

~ c m mbull~ ~

TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

~ bullz n

Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

ltD

TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

n z Q

bull

I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

bull ~

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

~ bull m ~ m ~ w m ~

~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

~bull nbull~m ~zbullz ~Q

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

m

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

Page 16: by Robert M. Gibson and Daniel R. Waldo - CMS · 2019. 9. 13. · by Robert M. Gibson and Daniel R. Waldo The United States spent an estimated $247 billion tor health care in 1980

Medicaid as ICFs for regular patients a well as solely for the mentally retarded and all other homes proshyviding some level of nursing care even though they are not certified under either program

The estimates for total nursing home expenditures other than those ICFs serving the mentally retarded are derived from data on facilities utilization and costs Sources for these data are the NCHS National Nursing Home Survey and the Internal Revenue Sermiddot vice (IRS) statistical reports Estimates for years for which no data are available are based on estimates of utilization and of indexes of prices paid by nursing homes for labor and non-labor resources The nonshyhospital portion of Medicaid expenditures for ICFs for the mentally retarded is added to regular nursing home expenditures

Services of P_hysicians Dentists and Other Health Professionals

Expenditures for the services of these practitioners are based primarily on data compiled from business income tax returns filed with the IRS and published in Statistics of Income-Business Income Tax Returns

The business receipts of sole proprietorships partmiddot nerships and Incorporated practices (which exclude non-practice income) are totaled to form the core of the physician component To that sum is added a pormiddot tion of spending for outpatient Independent laborashytory services that is assumed to be billed directly to patients and not included with physicians business receipts Also added Is an estimate of the expenses of non-profit group practice prepayment plans in promiddot vidlng physicians services to the extent that these expenses are not reported by memnber physicians as Income from self-employment (Physician group pracshytices that are non-profit corporations are included with prepayment plans as indicated above or where sermiddot vices are provided under contract to hospitals with hospital expenditures) Finally an estimate of fees paid to physicians for life insurance examinations is deducted

Expenditures for non-profit group practice dental clinics are added to the IRS total estimate of dentists business receipts No separate adjustment Is necesshysary for dental laboratories since all billings are asmiddot sumed to be made through dentists offices

The salaries of physicians and dentists on the staffs of hospitals or hospital outpatient facilities are considered a component of hospital care if they are serving In field services of the armed forces their salaries are Included in other health services Whenever possible expenditures for the education and training of medical personnel are considered as expenditures for education and excluded from health expenditures

The IRS statistics provide estimates of the income of other health professionals In private practice These Include private duty nurses chiropractors opshytometrists and other health professionals Estimates for home health agencies that are not hospital-based are added to the private income of other health professhysionals The portions of optometrists receipts that represent the cost of eyeglasses are deducted since they are included under spending for eyeglasses and appliances

Drug and Medical Sundries Eyeglasses and Orthopedic Appliances

Expenditures in these categories include only spending for outpatient drugs and appliances purmiddot chased from retail trade outlets by consumers The category excludes spending for goods provided to pamiddot tients in hospitals and in nursing homes and for those dispensed through physicians offices The basic data used to estimate private spending for drugs and drug sundries and for eyeglasses and appliances are the estimates of personal consumption expenditures commiddot piled by the Bureau of Economic Analysis (US Commiddot merce Department) as part of the GNP The two series that are used are drug preparations and sundries representing non-durable medical goods and ophthalmic products and orthopedic appliances which are durable medical goods Payments by workers compensation programs are deducted from the GNP series since they are treated as a private consumer payment in the Commerce Department series but as a public expenditure in the National Health Accounts The resulting private spending figure for drugs and appliances Is combined with expenshyditures by public programs for these products to arrive at the total amount of expenditures for the nation

Other Health Services

Personal health care expenditures that could not be classified elsewhere are brought together in this category It includes the expenditures In each public program that could not be classified as a specific type of medical service In addition it includes industrial In-plant services school health services and provision of care in Federal units other than hospitals

Expenditures for industrial in-plant services consist of private industry spending to maintain on-site health services School health spending is reported under the source-of-fund category of other public expenditures for personal health care in Table 2 Expenditures for medical activities in Federal units other than hospitals are residual amounts that primarily represent the cost of maintaining field and shipboard medical stations and military outpatient facilities separate from hospitals

Govemment Public Health Activities

The Federal portion of government public health acshytivities consists of outlays for the organization and delivery of health services the prevention and control of health problems and similar health activities admiddot ministered by various Federal agencies chiefly the Department of Health and Human Services

The State and local portions represent expenditures of all State and local health departments less inmiddot tergovernment payments to the States and localities for public health activities They exclude expenditures of other State and local government departments for control of air and water pollution sanitation water supplies and sewage treatment The source of these data is Governmental Finances an annual statistical series published by the Bureau of the Census and the periodic Census of Governments

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 16

Expenses for Prepayment and Administration

Prepayment expense is the difference between the earned premiums or subscription income of private health insurance organizations and claims or benefit expenditures Incurred (in the case of organizations that provide services directly the expenditures for proshyviding such services) In other words It is the amount retained by health Insurance organizations for operating expenses additions to reserves and profits

Administration expenses In the National Health Acmiddot counts Include the overhead of private voluntary health organizations They also include the adshyministrative expenses of the Medicare Medicaid Veterans Administration Department of Defense Workers Compensation Indian Health Service and Maternal and Child Health programs

Medical Research

Expenditures for medical research include all spending for biomedical research and for research in the delivery of health services by private organizashytions and public agencies whose primary object Is to advance human health Also included are those research expenditures made by other Federal agencies

The Federal amounts are derived from agency reports The amounts shown for State and local governments and private expenditures are based on published estimates prepared by the National Inmiddot stitutes of Health- primarily in the annual publicamiddot tion Basic Data Relating to the National Institutes of Health Construction of Medical Facilities

Expenditures for construction are the value put in place for hospitals nursing homes medical clinics and medical research facilities but not for private ofmiddot fice buildings providing office and laboratory facilities tor private practitioners Also excluded are amounts spent for construction of water treatment or sewage treatshyment plants and Federal grants for these purposes The data for value put in place for construction of publicly and privately owned medical facilities in each year are taken from Department of Commerce reports

Govemment Program Expenditures

All expenditures for health care that are channeled through any program established by public law are treated as a public expenditure in these estimates For example expenditures under workers compensation programs are included with government expenditures even though they Involve benefits paid by private inshysurers from premiums that have been collected from private sources

Premiums paid by enrollees in the Medicare SMI program are reported as program outlays In 1980 $328 million was spent by the Medicaid program to purchase Medicare SMI coverage for eligible Medicaid recipients This buy-in amount Is reported both as a Medicaid expenditure and as a Medicare expenditure

Federal Expenditures

Federal program expenditures are based in part on data reported to the Office of Management and Budget by the various Federal agencies as part of the Federal budget process

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981

Several significant differences exist from spending reported in the Federal budget however because of the conceptual framework on which the national health expenditure series Is based Expenditures for education and training of health professionals are exmiddot eluded from national health expenditures The majority of these expenditures constitute direct support of health professional schools and student assistance through loans and scholarships Payments by agenshycies for health insurance for employees are included with other private health Insurance expenditures rather than as government expenditures

Outlays of Federal programs by the type of health care provided are based on information obtained from the agencies that administer each program

State and Local Expenditures In general all spending by State and local governshy

ment units for health care that is not reimbursed by the Federal government through benefit payments or grants-in-aid nor by patients or their agents Is treated as State and local expenditures State and local spending excludes Federal reimbursements and grants-in-aid for various programs The amounts received from the Federal government as revenue sharing funds and used for health programs are not deducted from State spending since there is not adeshyquate information to make this adjustment During fiscal year 1978 States used $706 million in revenue sharing funds for health care purposes much of which is reflected in the category government public health activities

As with Federal expenditures payments for employee health insurance by State and local governments as employers are included under private health insurance expenditures

Private Health Insurance

Estimates of the amount of health care expenditures financed by private health insurance are derived from the data series on the financial experience of private health insurance organizations compiled and analyzed by HCFA (See Carroll and Arnett 1981)

Price Indexes for Personal Health Care Expenditures

To examine trends in real personal health exshypenditures (those from which the effects of price changes have been removed) an implicit price deflator tor personal health care Is used The deflator a Paasche price index developed by HCFA is the result of piecewise price adjustment of the components of permiddot sonai health care expenditures Conceptually this commiddot posite deflator is superior to the medical care price inmiddot dex of the CPI since the weights are derived from total spending for each personal health category The weights are adjusted each year to reflect changes in use and where possible the price measures used are more reflecmiddot trve of overall spending In a category

A fixed weight or Laspeyres price index has been derived as well to examine the effects of changes in price population and Intensity on the growth of pershysonal health care The price for each type of service Is the same as that used for the deflator discussed above the weight attached to the price of each service is the 1977 level of spending for that service as a share of total personal health care expenditure

17

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TABLE 1 National Health Expenditures Aggregate and per Capita Amounts by Major Source of Funds and as a Percentage of the Gross National Product

Selected Calendar Years 1929-80

1980 1979 1978 1974 1973 1972 1971 1W 1m 1W National Health Expenditures

(billions) $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 As a Percentage of the GNP 94 89 8B 8B 87 86 81 78 79 77

Sources of Funds Private Expenditures $1430 $1245 $1100 $991 $867 $765 $693 $639 $581 $516 Public Expenditures 1042 901 794 701 629 562 471 393 354 317

Federal Expenditures 709 SOB 537 474 426 371 304 252 229 203 Statelocal Expenditures 333 293 257 227 203 191 166 141 125 113

Per Capita Expenditures $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 Sources of Funds

Private Expenditures 61710 54361 48529 44214 39063 34808 31818 29619 27189 24436 Public Expenditures 44996 39331 35027 31267 28351 25549 21644 18215 16588 14987

Federal Expenditures 30614 26541 23684 21139 19173 16861 13986 11675 10713 9618 StateLocal Expenditures 14383 12770 11344 10128 9178 8688 7658 6540 5875 5368

Percentage Distribution of Funds 101)0 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 578 580 581 586 579 577 595 619 621 620 Public Funds 422 420 419 414 421 423 405 381 379 380

Federal Funds 287 284 282 280 285 279 262 245 245 244 StateLocal Funds 135 137 136 134 136 144 143 137 134 136

Addenda Gross National Product

(billions) $26261 $24139 $21561 $19180 $17180 $15492 $14342 $13264 $11859 $10776 Population (million$)1 2317 2291 2266 2242 2220 2199 2177 2157 2136 2113

Annualized Percentage Changes National Health Expenditures 152 134 119 131 128 140 128 103 123 115

Private Expenditures 14B 132 109 143 133 105 84 100 125 101 Public Expenditures 157 13$ 132 114 120 192 199 109 119 139

Federal Expenditures 167 133 132 114 148 218 209 100 126 150 StateLocal Expenditures 137 140 132 115 66 146 182 124 106 120

Gross National Product 88 120 124 11S 109 80 81 118 101 86 Population 11 11 11 10 10 10 9 10 11 13

1970

$747 7$

$469177 101

$35790

22468 13322 8469 4854

1000 622 372 237 136

$9927 2086

136 148 116 98

147 52 11

(continued) See footnote at end of tabla

~ ~ TABLE 1 n bull ~

National Health Expenditures Aggregate and per Capita Amounts by Major Sources of Funds and as a Percentage of the Gross National Product Selected Calendar Years 1929-80 (Continued)

m

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Qbull National Health Expenditures

(billions) As a Percentage of the GNP

1969

$657 70

1968

$582 67

J1sectI

$513 64

~

$461 61

1965

$417 60

jjsectQ

$269 53

~

$177 44

1950

$127 44

1940

$40 40

1929

$36 35

~ Sources of Funds ~

~ m ~

Private Expenditures Public Expenditures

Federal Expenditures StateLocal Expenditures

$408 24~ 161 88

$361 221 141 80

$324 190 119

70

$325 136

74 61

$309 108 55 52

$203 66 30 36

$132 46 20 26

$92 34 16 18

$32 8

$32 5

m bull m m ~

Per Capita Expenditures Sources of Funds

Private Expenditures

$31850

19778

$28497

17682

$25373

15998

$23029

16247

$21089

15632

$14630

11020

10538

7833

$8186

5962

$2962

2361

$2949

2549 ~ Public Expenditures 12072 10815 9375 6782 5457 3610 2705 2224 603 400 ~ Federal Expenditures 7795 6905 5890 3719 2797 1642 1190 1049

StateLocal Expenditures 4277 3910 3484 3063 2660 1969 1515 1175

Percentage Distribution of Funds 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Private Funds 621 62D 631 706 741 753 743 728 797 864 Public Funds 379 380 369 294 25gt 247 257 272 203 136

Federal Funds 24$ 243 232 161 133 112 113 128 StateLocal Funds 134 137 137 133 126 135 144 144

Addenda Gross National Product

(billions I $9440 $8734 $7996 $7560 $6910 $5065 $4000 $2865 $1000 $1034 Population (millionsl1 2064 2044 2023 2001 1979 1838 1684 1547 1346 1237

Annualized Percentage Changes National Health Expenditures 129 134 114 105 92 87 70 122 2

Private Expenditures 130 116 -5 51 88 90 74 112 1 Public Expenditures

Federal Expenditures 127 140

165 184

397 601

257 345

102 129

72 85

58 43

155 46

StateLocal Expenditures 105 133 150 165 77 72 70 Gross National Product 81 92 58 94 64 42 69 111 -3 Population 10 10 11 11 15 12 17 14 2 --t As of July 1 Includes the resident US population and that of the outlying territories plus Federal military and chdllan employefl and their dependents overseas

Sou reG Health CarG Financing Administration

~

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TABLE 2A National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1980

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal- shy - shy - shy - shy -shyState and

Local

Amount (Billions)

Total $2472 $1430 $1355 $706 $649 $75 $1042 $709 $333

Health Services and Supplies 2356 1387 1355 706 649 32 969 657 313 Personal Health Care 2179 1315 1287 706 581 29 864 625 239

Hospital Care 996 453 441 91 350 12 542 413 129 Physicians Services 466 343 343 174 169 bull 123 94 29 Dentists Services 159 153 153 120 33 - 6 3 3 Other Professional Services 54 39 39 32 7 1 15 10 4 Drugs and Medical Sundries 192 177 177 159 18 - 16 8 8 Eyeglasses and Appliances 51 46 46 44 2 - 5 4 1 Nursing Home Care 207 90 88 87 1 1 118 64 53 Other Health Services 54 14 - - - 14 40 28 12

Prepayment and Administration 104 72 68 68 4 32 20 13 Government Public Health Activities 73 - - - - - 73 12 61

Research and Construction of Medical Facilities 116 43 - - - 43 73 53 20

Research3 54 3 - - - 3 51 47 5 Construction 61 40 - - - 40 22 6 16

Per Capita Amount2

bull ~ 0 bullbull ibullz

Total $106706 $61710 $58471 $30465 $28006 $3238 $44996 $30614

Health Services and Supplies 101710 59864 58471 30465 28006 1393 41846 28341 Personal Health Care 94062 56767 55530 30465 25065 1236 37296 26991

Hospital Care 42980 19570 19037 3912 15124 533 23410 17832 Physicians Services 20118 14816 14804 7504 7300 12 5303 4064 Dentists Services 6842 6588 6588 5161 1427 - 254 145 Other Professional Services 2330 1704 1679 1384 295 25 626 450

$14384

13505 103055579 1238 109 176

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I

Drugs and Medical Sundries 8300 7628 7628 6863 765 - 672 336 Eyeglasses and Appliances 2210 1978 1978 1888 89 - 232 194 Nursing Home Care 8946 3871 3817 3753 64 54 5075 2770 Other Health Services 2334 612 - - - 612 1722 1200

Prepayment and Administration 4493 3097 2941 - 2941 156 1396 843 Government Public Health Activities 3155 - - - - - 3155 507

336 38

2306 523 553

2648 ~ ~ Research and Construction of Medical m

bull-bull ~

Facilities 4996 1846 - - - 1846 3150 2273 Research3 2350 139 - - - 139 2211 2009 Construction 2646 1707 - - - 1707 939 264

(continued)

877 202 675

TABLE 2A ~

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution~ by Source of Funds Calendar Year 1980 (Continued)

~bullbull ~ gtz

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

~ Q

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Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ iwbullbull

Health Services and Supplies 953 970 1000 1000 1000 430 930 926 Personal Health Care 882 920 950 1000 895 382 829 882

Hospital Care 403 317 326 128 540 165 520 582 Physicians Services 189 240 253 246 261 4 118 133 Dentists Services 64 107 113 169 51 - 6 5

939 716 388 86

8

~ Other Professional Services 22 28 29 45 11 8 14 15 i2 Drugs and Medical Sundries 78 124 130 225 27 - 15 11 23 Eyeglasses and Appliances 21 32 34 62 3 - 5 6 3 Nursing Home Care 84 63 65 123 2 17 113 90 160 Other Health Services 22 10 - - - 189 38 39 36

Prepayment and Administration 42 50 50 - 105 48 31 28 38 Government Public Health Activities 30 - - - - - 70 17 184

Research and Construction of Medical Facilities 47 30 - - - 570 70 74 61

Research3 22 2 - - - 43 49 66 14 Construction 25 28 - - - 527 21 9

See footnotes at end of tables

47

TABLE 28

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1979

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- ---Amount (Billions)

State and Local

Total $2146 $1245 $1179 $620 559 $66 $901 $608 $293

Health Services and Supplies 2043 1208 1179 620 559 29 836 562 274 Personal Health Care 1891 1147 1122 620 502 26 744 531 213

Hospital Care 857 392 381 79 301 11 465 349 116 Physicians Services 407 300 300 153 147 bull 107 80 26 Dentists Services 135 130 130 101 29 - 5 3 2 Other Professional Services 47 35 34 29 6 1 12 8 3 Drugs and Medical Sundries 172 158 158 142 16 - 14 7 7 Eyeglasses and Appliances 46 42 42 40 2 - 4 4 1 Nursing Home Care 178 78 77 76 1 1 99 54 45 Other Health Services 50 13 - - - 13 37 26 11

Prepayment and Administration 89 60 57 57 3 29 18 11 Government Public Health Activities 64 - - - - - 64 13 50

Research and Construction of Medical Facilities 103 38 - - - 38 65 46 19

Research3 48 3 - - 3 45 41 4 Construction 54 35 - - - 35 20 5 14

Per Capita Amount2

~ ~ n gt ~ m z gtz Q z 0 ~ m

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~

Total $93692 $54361 $51463 $27077 $24386 $2898 $39331 $26541 $12790

Health Services and Supplies 89208 52715 51463 27077 24386 1253 36493 24521 Personal Health Care 82568 50096 48982 27077 21905 1114 32473 23178

11972 9295

Hospital Care 37398 17096 16623 3469 13154 473 20302 15217 5085 Physicians Services 17765 13108 13097 6690 6407 11 4656 3512 Dentists Services 5895 5668 5668 4402 1266 - 226 126 Other Professional Services 2047 1529 1506 1248 258 23 519 369 Drugs and Medical Sundries 7503 6890 6890 6211 679 - 613 306

1145 100151 306

Eyeglasses and Appliances 2020 1824 1824 1742 82 - 196 161 35 Nursing Home Care 7762 3421 3373 3315 58 47 4341 2368 1973 Other Health Services 2178 560 - - - 560 1618 1120

Prepayment and Administration 3866 2620 2481 - 2481 138 1246 772 Government Public Health Activities 2774 - - - - - 2774 572

498 475

2202

Research and Construction of Medical Facilities 4484 1646 - - - 1646 2838 2020 818

Research3 2107 132 - - - 132 1975 1785 190 Construction 2377 1514 - - - 1514 863 235

(continued)

628

mbull TABLE 28 ~ National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution n bull~ by Source of Funds Calendar Year 1979 (Continued)m ~ z bullz n z

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local0 ~ Percentage Distribution ~

~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000m ~ Health Services and Supplies 952 970 1000 1000 1000 432 928 924 936 m bullbullm

Personal Health Care 881 922 952 1000 898 384 826 873 Hospital Care 399 314 323 128 539 163 516 573

727398

~

Physicians Services 190 241 255 247 263 4 118 132 Dentists Services 63 104 110 163 52 - 6 5 Other Professional Services 22 28 29 46 11 8 13 14

89 8

12 Drugs and Medical Sundries 80 127 134 229 28 - 16 12 24 Eyeglasses and Appliances 22 34 35 64 3 - 5 6 3 Nursing Home Care 83 63 66 122 2 16 110 89 154 Other Health Services 23 10 - - - 193 41 42 39

Prepayment and Administration 41 48 48 - 102 48 32 29 37 Government Public Health Activities 30 - - - - - 71 22 172

Research and Construction of Medical Facilities 48 30 - - - 568 72 76 64

Research3 22 2 - - - 45 50 67 15 Construction 25 28 - - - 522 22 9

See footnotes at end of tables

49

TABLE 2C

National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution by Source of Funds Calendar Year 1978

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal State and

Local

Amount (Billions)

Total $1893 $1100 $1039 $542 $497 $61 $794 $537 $257

Health Services and Supplies 1795 1064 1039 542 497 25 731 493 238 Personal Health Care 1667 1015 992 542 450 22 652 464 188

Hospital Care 757 346 337 66 271 9 411 306 105 Physicians Services 358 266 266 131 135 bull 92 69 23 Dentists Services 118 113 113 90 23 - 5 3 2 Other Professional Services 41 31 31 25 6 bull 10 7 3 Drugs and Medical Sundries 154 141 141 128 13 - 13 7 6 Eyeglasses and Appliances 41 38 38 36 2 - 4 3 1 Nursing Home Care 152 68 67 66 1 1 84 47 38 Other Health Services 45 12 - - - 12 33 23 10

Prepayment and Administration 75 49 46 - 46 3 26 17 9 Government Public Health Activities 53 - - - - - 53 12 41

Research and Construction of Medical Facilities 98 36 - - - 36 62 43 19

Research3 44 3 - - - 3 42 38 4 Construction 53 33 - - - 33 21 6 15

Dollar Amount per Capita2

~ Total $83557 $48529 $45851 $23920 $21931 $2678 $35027 $23684 $11344~ n gt

Health Services and Supplies 79238 46955 45851 23920 21931 1104 32283 21775 Personal Health Care 73557 44786 43799 23920 19880 987 28771 20479

10508 8291

~ m Hospital Care 33409 15285 14887 2913 11974 397 18125 13509 4616 ~ z gt z Q

Physicians Services 15803 11738 11729 5779 5950 09 4065 3032 Dentists Services 5198 4980 4980 3962 1018 - 219 125 Other Professional Services 1818 1377 1357 1113 244 20 440 312

1032 93

128 z Q Drugs and Medical Sundries 6803 6233 6233 5660 573 - 569 290 279 ~ m s

Eyeglasses and Appliances 1824 1660 1660 1587 73 - 164 133 Nursing Home Care 6712 2995 2954 2906 46 42 3717 2062

31 1655

m Other Health Services 1990 519 - - - 519 1472 1016 456 ~ m ~

Prepayment and Administration 3330 2169 2051 2051 117 1161 753 Government Public Health Activities 2351 - - - - - 2351 543

408 1808

m ~ m Research and Construction of Medical m ~

Facilities 4319 1574 - - 1574 2745 1908

Research3 1961 124 - - - 124 1837 1660 Construction 2358 1450 - - - 1450 908 248

(continued)

836 177 659

~ ~ n bullm bull ~ bullz ~

TABLE 2C National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds calendar Year 1978 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local Q

bullm Percentage Distribution

s m bull~ Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

mbull~ Health Services and Supplies 948 968 1000 1000 1000 412 922 919 926 m bullbullm bull I

Personal Health Care 880 923 955 1000 906 368 821 865 Hospital Care 400 315 325 122 546 148 517 570 Physicians Services 189 242 256 242 271 3 116 128 Dentists Services 62 103 109 166 46 - 6 5

731407

91 8

Other Professional Services 22 28 30 47 11 8 13 13 11 Drugs and Medical Sundries 81 128 136 237 26 - 16 12 25 Eyeglasses and Appliances 22 34 36 66 3 - 5 6 3 Nursing Home Care 80 62 64 121 2 16 106 87 146 Other Health Services 24 11 - - - 194 42 43 40

Prepayment and Administration 40 45 45 94 44 33 32 36 Government Public Health Activities 28 - - - - - 67 23 159

Research and Construction of Medical Facilities 52 32 - - - 588 78 81 74

Research3 23 3 - - - 46 52 70 16 Construction 28 30 - - 541 26 10

See footnotes at end of taOies

58

TABLE 20 National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

~ by Source of Funds Calendar Year 1975

Private Public

Consumer State and Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $1327 $765 $714 $390 $324 $51 $562 $371 $191

Health Services and Supplies 1243 732 714 390 324 18 511 338 173 Per$onal Health Care 1168 706 691 390 301 16 461 314 147

Hospital Care 521 233 227 43 184 6 288 203 86 Physicians Services 249 184 184 90 94 65 46 19 Dentists Services 82 78 78 68 10 - 5 3 2 Other Professional Services 26 20 20 17 4 6 4 2 Drugs and Medical Sundries 119 109 109 102 7 - 10 5 5 Eyeglasses and Appliances 32 29 29 28 1 - 2 2 1 Nursing Home Care 101 44 43 43 1 1 57 32 25 Other Health Services 37 9 - - - 9 28 20 8

Prepayment and Administration 44 26 24 - 24 2 18 12 7 Government Public Health Activities 32 - - - - - 32 12 19

Research and Construction of Medical Facilities

Research3 84 33

33 3

--

- -- -

33 3

51 31

33 28

18 3

Construction 51 31 - - - 31 20 5 15

Per Capita Amount2

~ Total $60357 $34808 $32478 $17727 $14752 $2330 $25549 $16861 $8688 ~

i Health Services and Supplies 56537 33291 32478 17727 14752 813 23245 15377 7868 ~ Personal Health Care 53097 32120 31403 17727 13676 718 20977 14294 6684 ~ Hospital Care 23697 10586 10322 1935 8386 264 13111 9218 3893 ~ Physicians Services 11338 8369 8363 4104 4258 07 2969 2112 857 Dentists Services 3746 3534 3534 3076 458 - 212 125 87 ~ Other Professional Services 1191 930 917 752 164 14 261 170 90 ~ Drugs and Medical Sundries 5430 4963 4963 4625 338 - 467 240 227 11

lE

Eyeglasses and Appliances Nursing Home Care Other Health Services

1434 4586 1675

1331 2002 406

1331 1975

-

1294 1940

-

37

35 -

-28

406

104 2583 1270

80 1448 899

23 1135 371

Cli Prepayment and Administration 2004 1171 1075 - 1075 96 833 529 304 ~ Government Public Health Activities 1436 - - - - - 1436 555 881 m ~ Research and Construction of Medical i

Facilities Research3

3820 1517

1517 120

--

--

--

1517 120

2304 1397

1483 1261

820 136

Construction 2304 1397 - - - 1397 907 223 684

(continued)

m bull ~

~ bulln ~ ~ m

~ bullz ~ Q

~ m s ~ m

~ wbullm ~

bull bull

TABLE 20National Heahh Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1975 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal State and

Local

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 937 956 1000 1000 1000 349 910 912 Personal Health Care 880 923 967 1000 927 308 821 848

906 769

Hospital Care 393 304 318 109 569 113 513 547 Physicians Services 188 240 257 232 289 3 116 125 Dentists Services 62 102 109 174 31 - 8 7 Other Professional Services 20 27 28 42 11 6 10 10 Drugs and Medical Sundries 90 143 153 261 23 - 18 14

448 99 10 10 26

Eyeglasses and Appliances 24 38 41 73 2 - 4 5 3 Nursing Home Care 76 58 61 109 2 12 101 86 131 Other Health Services 28 12 - - - 174 50 53 43

Prepayment and Administration 33 34 33 - 73 41 33 31 35 Government Public Health Activities 24 - - - - - 56 33 101

Research and Construction of Medical Facilities 63 44 - - - 651 90 88 95

Research3 25 3 - - - 52 55 75 16 Construction 38 40 - - - 599 36 13

See footnotes at end of tables

79

3

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution _ by Source of Funds Calendar Year 1970

00 Private Public

Consumer

Type of Expenditure Total Total Total Direct Insurance Other 1 Total Federal - shy - shyAmount (Billions

State and Local

Total $747 $469 $431 $260 $171 $38 $278 $177 $101

Health Services and Supplies 693 443 431 260 171 12 250 157 92 Personal Health Care 651 427 416 260 156 10 225 145 79

Hospital Care 278 131 127 28 99 4 147 95 52 Physicians Services 143 113 113 65 49 bull 30 21 9 Dentists Services 47 45 45 43 2 - 2 1 1 Other Professional Services 16 14 14 11 3 bull 2 1 1 Drugs and Medical Sundries 80 75 75 72 3 5 2 2 Eyeglasses and Appliances 19 18 18 18 - 1 1 Nursing Home Care 47 24 24 24 bull bull 23 13 9 Other Health Services 21 6 - - - 6 15 9 5

Prepayment and Administration 27 16 15 - 15 2 11 6 5 Government Public Health Activities 14 - - - - - 14 6 8

Research and Construction of Medical Facilities 54 26 - - 26 28 20 9

Research3 20 2 - - 2 18 16 2 Construction 34 23 - 23 11 4 7

Per Capita Amount2

z mbull ~ z 0bullbullm ~ zbullz 0 z Q

bullm lt

~ mbull~ mbullbullmbull ~

Total $35790 $22468 $20660 $12475 $8185 $1809 $13322 $8469 $4854

Health Services and Supplies 33202 21241 20660 12475 8185 581 11961 7533 Personal Health Care 31229 20457 19962 12475 7487 496 10772 6966

Hospital Care 13305 6269 6088 1329 4759 181 7036 4563 Physicians Services 6874 5436 5431 3100 2331 05 1438 1025

4428 3806 2473

413 Dentists Services 2277 2170 2170 2052 118 107 62 Other Professional Services 764 659 649 524 125 10 106 67

45

38 Drugs and Medical Sundries 3833 3601 3601 3454 147 232 115 Eyeglasses and Appliances 933 881 881 880 01 - 51 37 Nursing Home Care 2252 1158 1142 1136 06 16 1094 644

118 14

449 Other Health Services 992 284 - - - 284 708 451

Prepayment and Administration 1292 784 698 698 86 508 272 256 236

Government Public Health Activities 681 - - - - - 681 295 386

Research and Construction of Medical Facilities 2588 1227 - - 1227 1361 936

Research3 944 103 - - - 103 841 753 426

88 Construction 1645 1124 - - 1124 521 183

(continued)

338

~ ~ n bullbull m

bullz ~ ~

TABLE 2E National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1970 (Continued)

Private Public Consumer

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal -- -- -- -- -- -- --shyState and

LocoI

Q

bullm s

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

~ m ~

Health Services and Supplies 928 945 1000 1000 1000 321 898 890 Personal Health Care 873 911 966 1000 915 274 809 823

912784

~ Hospital Care 372 279 295 107 581 100 528 539 509~ mbull ~

Physicians Services 192 242 263 248 285 3 108 121 Dentists Services 64 97 105 164 14 - 8 7

859

~ Other Professional Services 21 29 31 42 15 5 8 8 8Drugs and Medical Sundries 107 160 174 277 18 - 17 14 24 Eyeglasses and Appliances 26 39 43 71 - - 4 4 3 Nursing Home Care 63 52 55 91 1 9 82 76 93 Other Health Services 28 13 - - - 157 53 53 53

Prepayment and Administration 36 35 34 - 85 47 38 32 49 Government Public Health Activities 19 - - - - - 51 35 79

Research and Construction of Medical Facilities 72 55 - - - 679 102 110 88

Research3 26 5 - - - 57 63 89 18 Construction 46 50 - - - 622 39 22 70

See footnotes at end of tables

~

TABLE 2F National Health Expenditures by Type of Expenditure Aggregate and per Capita Amounu and Percentage Distribution

by Source of Funds Calendar Year 1965

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

Amount (Billions)

Total $417 $309 $285 $185 $100 $24 $108 $55 $52

Health Services and Supplies 382 295 285 185 100 10 88 40 48 Personal Health Care 358 280 273 185 88 8 77 36 41

Hospital Care 139 85 82 24 58 3 54 24 30 Physiciansmiddot Services 85 79 79 52 27 bull 6 2 4 Dentists Services 28 28 28 27 bull Other Professional Services 10 10 10 9 1 bull Drugs and Medical Sundries 52 50 50 49 1 - 2 1 1 Eyeglasses and Appliances 12 11 11 11 Nursing Home Care 21 14 13 13 bull bull 7 5 3 Other Health Services 11 4 - - - 4 7 4 3

Prepayment and Administration 16 14 12 - 12 2 2 - 2 Government Public Health Activities 8 - - - - - 8 3 5

Research and Construction of Medical Facilities 35 15 - - - 15 20 16 5

Research3 15 2 - - - 2 13 12 1 Construction 20 13 - - - 13 7 3 4

Per Capita Amount2

Total $21089 $15632 $14401 $9351 $5050 $1230 $5457 $2797 $2660 ~ ~ 0bullbullm ~

Health Services and Supplies 19314 14890 14401 9351 5050 488 4424 2013 Personal Health Care 18073 14175 13776 9351 4425 398 3898 1832

Hospital Care 7013 4288 4132 1203 2929 156 2725 1228 Physicians Services 4282 3988 3983 2627 1356 04 294 76

2411 2066 1497 218

zbullz Dentists Services 1419 1395 1395 1374 21 - 25 16 Other Professional Services 522 503 494 440 54 09 19 06

08

13

~bull ~

Drugs and Medical Sundries 2618 2518 2518 2454 65 - 99 61 Eyeglasses and Appliances 593 578 578 577 - - 15 06 Nursing Home Care 1047 688 677 676 01 11 360 232 Other Health Services 579 218 - - - 218 361 206

39

08 127 155

~ Prepayment and Administration 829 715 625 - 625 90 114 07 107 m Government Public Health Activities 411 - - - - - 411 174 237 ~ ~ Research and Construction of Medical m mbull- Facilities 1775 742 - - - 742 1033 784

Research3 766 89 - - - 89 677 629 249

48 ~ Construction 1009 653 - - - 653 356 155

(continued)

202

m gt ~ n gt ~ m

z gtz 0

TABLE 2FNational Health Expenditures by Type of Expenditure Aggregate and per Capita Amounts and Percentage Distribution

by Source of Funds Calendar Year 1965 (Continued)

Private Public Consumer State and

Type of Expenditure Total Total Total Direct Insurance Other1 Total Federal Local

z 0 Percentage Distribution ~ m s m bullbullm

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 916 953 1000 1000 1000 397 811 720 906 ~ m bull mbull

Personal Health Care 857 907 957 1000 876 324 714 655 777Hospital Care 333 274 287 129 580 127 499 439 563 Physicians Services 203 255 277 281 268 3 54 27 82

~

Dentists Services 67 89 97 147 4 - 4 6 3 Other Professional Services 25 32 34 47 11 7 4 2 5

Drugs and Medical Sundries 124 161 175 262 13 - 18 22 15 Eyeglasses and Appliances 28 37 40 62 - 3 2 3 Nursing Home Care 50 44 47 72 - 9 66 83 48 Other Health Services 27 14 - - - 177 66 74 58

Prepayment and Administration 39 46 43 - 124 73 21 3 40 Government Public Health Activities 20 - - - - - 75 62 89

Research and Construction of Medical Facilities 84 47 603 189 280 94

Research3 36 6 - - - 72 124 225 18 Construction 48 42 - - - 531 65 55 76

bullLess than $100 million I Spending by philanthropic organizations industrial Jnplant health serlices and construction financed privately 2Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas 3Research and development expenditures of drug companies and other manufacturers and providers of medical equipment and supplies are excluded from Research Expenditures but are included in the expenditure class in which the product faUs

Source Health Care Financing Administration

~

TABLE 3

National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970

Amount ~Billions)

Total $2472 $2146 $1893 $1692 $1497 $1327 $1164 $1032 $935 $833 $747

Health Services and Supplies 2356 2043 1795 1601 1406 1243 1089 963 869 772 693 Personal Health Care 2179 1891 1667 1487 1318 1168 1010 887 802 720 651

Hospital Care 996 857 757 678 599 521 448 387 349 308 278 Physicians Services 466 407 358 319 276 249 212 191 172 159 143 Dentists Services 159 135 118 105 94 82 74 65 56 51 47 Other Professional Services 54 47 41 36 32 26 22 20 18 16 16 Drugs and Medical Sundries 192 172 154 141 130 119 110 101 93 86 80 Eyeglasses and Appliances 51 46 41 37 34 32 28 25 23 20 19 Nursing Home Care 207 178 152 132 114 101 85 71 65 56 47 Other Health Services 54 50 45 41 38 37 31 27 26 23 21

Prepayment and Administration 104 89 75 71 50 44 52 54 47 34 27 Government Public Health Activities 73 64 53 43 38 32 27 22 20 18 14

Research and Construction of Medical Facilities 116 103 98 92 90 84 75 68 66 61 54

Research 54 48 44 39 37 33 28 25 24 21 20 Construction 61 54 53 53 53 51 47 43 42 40 34

Dollar Amount per Capita 1

Total $106706 $93692 $83557 $75481 $67414 $60357 $53463 $47834 $43777 $39423 $35790

~ Health Services and Supplies 101710 89208 79238 71392 63347 56537 50032 44663 40689 36525 33202

bull Personal Health Care 94062 82568 73557 66316 59367 53097 46384 41120 37553 34064 31229 gt ~ Hospital Care 42980 37398 33409 30220 26977 23697 20571 17936 16359 14587 13305 ~ ~ Physicians Services 20118 17765 15803 14205 12417 11338 9760 8845 8036 7535 6874 0 gt Dentists Services 6842 5895 5198 4698 4256 3746 3384 3028 2634 2399 2277 ~ Other Professional Services 2330 2047 1818 1590 1442 1191 1024 915 844 770 764bull

Drugs and Medical Sundries 8300 7503 6803 6273 5866 5430 5053 4663 4371 4061 3833~ gt Eyeglasses and Appliances 2210 2020 1824 1631 1537 1434 1277 1170 1059 940 933z 0 Nursing Home Care 8946 7762 6712 5890 5143 4586 3914 3311 3023 2667 2252 z Other Health Services 2334 2178 1990 1808 1728 1675 1402 1252 1227 1104 992Q ~ Prepayment and Administration 4493 3866 3330 3149 2262 2004 2393 2508 2197 1627 1292

Government Public Health Activities 3155 2774 2351 1927 1717 1436 1255 1036 939 835 681

a Research and Construction of Medicalbull Facilities 4996 4484 4319 4090 4068 3820 3431 3171 3087 2898 2588~bull Research 2350 2107 1961 1748 1667 1517 1282 1170 1102 1002 944

bull ~ m Construction 2646 2377 2358 2342 2401 2304 2149 2001 1986 1896 1645

~

(continued)

~ ~ nbullbullm

l1 bullz n z 0 bulli bullm ~ m ~ bullm bull~

TABLE3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 953 952 948 946 940 937 936 934 929 926 Personal Health Care 882 881 880 879 881 880 868 860 858 864

Hospital Care 403 399 400 400 400 393 385 375 374 370 Physicians Services 189 190 189 188 184 188 183 185 184 191 Dentists Services 64 63 62 62 63 62 63 63 60 61 Other Professional Services 22 22 22 21 21 20 19 19 19 20 Drugs and Medical Sundries 78 80 81 83 87 90 95 97 100 103 Eyeglasses and Appliances 21 22 22 22 23 24 24 24 24 24 Nursing Home Care 84 83 80 78 76 76 73 69 69 68 Other Health Services 22 23 24 24 26 28 26 26 28 28

Prepayment and Administration 42 41 40 42 34 33 45 52 50 41 Government Public Health Activities 30 30 28 26 25 24 23 22 21 21

Research and Construction of Medical Facilities 47 48 52 54 60 63 64 66 71 74

Research 22 22 23 23 25 25 24 24 25 25 Construction 25 25 28 31 36 38 40 42 45 48

1970

1000

928 873 37219264 21

107 2663 28 36 19

72 26 46

(continued)

l

TABLE 3National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Amount (Billions)

Total $657 $582 $513 $461 $417 $269 $177 $127 $40 $36

Health Services and Supplies 609 541 475 424 382 252 169 117 39 34 Personal Health Care 569 502 444 396 358 237 157 109 35 32

Hospital Care 241 210 183 157 139 91 59 39 10 7 Physicians Services 126 111 101 92 85 57 37 27 10 10 Dentists Services 42 37 34 30 28 20 15 10 4 5 Other Professional Services 15 14 13 12 10 9 6 4 2 3 Drugs and Medical Sundries 71 64 58 55 52 37 24 17 6 6 Eyeglasses and Appliances 17 15 13 13 12 8 6 5 2 1 Nursing Home Care 38 34 28 24 21 5 3 2 0 0 Other Health Services 19 17 16 15 11 11 7 5 1 1

Prepayment and Administration 28 29 22 20 16 11 8 5 2 1 Government Public Health Activities 12 10 9 8 8 4 4 4 2 1

Research and Construction of Medical Facilities 48 41 38 37 35 17 9 10 1 2

Research 19 19 18 16 15 7 2 1 0 0 Construction 29 22 21 21 20 10 7 8 1 2

Dollar Amount per Capital

Total $31850 $28497 $25373 $23029 $21089 $14630 $10538 $8186 $2962 $2949

mbull ~ 0bullbullm

zbullz Q z Q

bull ~

~ m ~ mbullbullmbull ~

Health Services and Supplies Personal Health Care

29506 27564

26478 24550

23478 21929

2118b 19761

19314 18073

13700 12881

10027 9329

7566 7037

2874 2636

2777 2588

Hospital Care 11655 10276 9023 7826 7013 4946 3504 2490 751 536 Physicians Services Dentists Services

6129 2034

5434 1797

5012 1661

4584 1481

4282 1419

3092 1075

2191 896

1776 621

723 311

811 390

Other Professional Services 713 697 622 579 522 469 334 256 129 204 Drugs and Medical Sundries Eyeglasses and Appliances Nursing Home Care Other Health Services

Prepayment and Administration

3462 827

1844 902

1346

3142 726

1654 826

1417

2849 624

1372 766

1111

2729 657

1177 728

1012

2618 593

1047 579 829

1989 422 286 592 603

1416 359 185 445 475

1116 317 121 340 295

473 140

25

83 124

490 107

00

50 112

Government Public Health Activities 596 511 439 412 411 225 224 233 114 78

Research and Construction of Medical Facilities

Research Construction

2344 931

1413

2019 918

1101

1895 873

1022

1842 814

1028

1775 766

1009

930 360 570

511 125 387

621 76

545

88

02

86

172 00

172

(continued)

~ ~ 0bull m

~ bullz Q z Q

gt m

a ~ mbullbullmbullbullm gt

~

TABLE 3 National Health Expenditures Aggregate and per Capita Amount and Percentage Distribution for Selected Calendar Years 1929-1980 (Continued)

1969 1968 1967 1966 1965 1960 1955 1950 1940 1929

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Health Services and Supplies 926 929 925 920 916 936 951 924 970 942 Personal Health Care 865 852 854 858 857 880 885 860 890 878

Hospital Care 366 361 356 340 333 338 332 304 254 182 Physicians Services 192 191 198 199 203 211 208 217 244 275 Dentists Services 64 63 65 64 67 74 85 76 105 132 Other Professional Services 22 24 25 25 25 32 32 31 44 69 Drugs and Medical Sundries 109 110 112 119 124 136 134 136 160 166 Eyeglasses and Appliances 26 25 25 29 28 29 34 39 47 36 Nursing Home Care 58 58 54 51 50 20 18 15 8 0 Other Health Services 28 29 30 32 27 40 42 42 28 17

Prepayment and Administration 42 50 44 44 39 41 45 36 42 38 Government Public Health Activities 19 18 17 18 20 15 21 29 38 26

Research and Construction of Medical Facilities 74 71 75 80 84 64 49 76 30 58

Research 29 32 34 35 36 25 12 9 1 o Construction 44 39 40 45 48 39 37 67 29 58

1 Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

t

ll TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expendituresl by Source of Funds Selected Calendar Years 1929-1980

Direct Consumer

Total Payments Total

1929 $32 $282 $4 1935 27 222 5 1940 35 292 7 1950 109 71 38 1955 157 91 66 1960 237 130 107 1965 358 185 173 1966 396 195 201 1967 444 189 255 1968 502 206 296 1969 569 230 339 1970 651 260 391 1971 720 278 442 1972 802 310 492 1973 887 342 545 1974 1010 364 646 1975 1168 390 778 1976 1318 430 888

4 ~

~~ ~ ~

~ m

~

~ ~

1977 1487 487 1000 1978 1667 542 1125 1979 1891 620 1271 1980 2179 706 1473

~ ~ n ~ ~ m ~ z ~ z n z Q

TABLE 4 Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1

by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private

Consumer Total Payments Total Insurance Other Total-shy -shy -shy

Public

Federal State and

Local ~

~ Dollar Amount per Capita3 ~ ~ 1929 m ~ 1935

$2588 $22862 $301 (2) $68 $234 2055 16942 361 (2) 57 302

$70 70

$163 232

m ~ 1940 2636 21442 492 (2) 70 424 108 316 m m 1950 7037 4612 2426 642 207 1578 734 843 ~- 1955 9329 5423 3905 1506 257 2143 978 1165

1960 ~ 12881 7066 5815 2718 292 2805 1196 1609 1965 18073 9351 8722 4425 398 3898 1832 2066 1966 19761 9725 10037 4562 405 5069 2625 2444 1967 21929 9325 12604 4743 403 7458 4687 2771 1968 24550 10075 14475 5353 438 8684 5563 3121 1969 27564 11133 16432 6234 438 9759 6377 3382 1970 31229 12475 18755 7487 496 10772 6966 3806 1971 34064 13162 20902 8200 588 12114 7937 4178 1972 37553 14512 23042 8937 599 13506 8866 4640 1973 41120 15863 25257 9779 620 14858 9772 5086 1974 46384 16730 29654 11239 700 17715 11831 5884 1975 53097 17727 35371 13676 718 20977 14294 6684 1976 59367 19373 39994 15978 808 23207 16284 6923 1977 66316 21723 44593 17845 928 25820 18271 7549 1978 73557 23920 49637 19880 987 28771 20479 8291 1979 82568 27077 55492 21905 1114 32473 23178 9295 1980 94062 30465 63597 25065 1236 37296 26991 10305

(continued)

~ TABLE4

Aggregate and per Capita Amount and Percentage Distribution of Personal Health Care Expenditures1 by Source of Funds Selected Calendar Years 1929-1980 (Continued)

All Third-Parties Direct Private Public

Consumer State and Total Payments Total Insurance Other Total Federal Local

Percentage Distribution

1929 1000 8842 116 (2) 26 90 27 63 1935 1000 8242 176 (2) 28 147 34 113 1940 1000 8132 187 (2) 26 161 41 120 1950 1000 655 345 91 29 224 104 120 1955 1000 581 419 161 28 230 105 125 1960 1000 549 451 211 23 218 93 125 1965 1000 517 483 245 22 216 101 114 1966 1000 492 508 231 21 257 133 124 1967 1000 425 575 216 18 340 214 126 1968 1000 410 590 218 18 354 227 127 1969 1000 404 596 226 16 354 231 123 1970 1000 399 601 240 16 345 223 122 1971 1000 386 614 241 17 356 233 123 1972 1000 386 614 238 16 360 236 124 1973 1000 386 614 238 15 361 238 124 1974 1000 361 639 242 15 382 255 127 1975 1000 334 666 258 14 395 269 126 1976 1000 326 674 269 14 391 274 117

1977 1000 328 672 269 14 389 276 114 1978 1000 325 675 270 13 391 278 113 1979 1000 328 672 265 13 393 281 113 ~ 1980 1000 324 676 266 13 396 287 110g lPersonal health care expenditures equal national health expenditures less spending for administration and prepayment government public health activities non-commercial research

~ z and construction of medical facilities

2Private health insurance benefits and prepayment expenses are combined with direct payments for these years 3Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

z overseas Q

I ~ ~ -~

TABLE 5 Per50nal Health Care Expenditures Aggregate and per Capita Amount and Percentage Distribution

by Source of Funds Selected Calendar Years 19501980

Direct All Third Parties Comumer Private Public

Total Pa~ments Total Insurance ~

Hospital Care Amount (Billions)

Programs

1950 $39 $12 $27 $7 $1 $19 1955 59 u 46 17 2 27 1960 91 18 73 33 2 38 1965 139 24 115 68 3 54 1966 157 25 132 60 3 69 1967 183 18 164 62 3 100 1968 210 21 189 71 3 115 1969 241 24 216 83 3 131 1970 278 28 250 99 4 147 1971 308 28 280 111 5 165 1972 349 38 311 120 5 186 1973 387 46 341 130 5 205 1974 448 47 401 149 6 246 1975 521 43 479 184 6 288 1976 599 50 549 216 7 327 1977 678 63 615 239 9 368 1978 757 66 691 271 9 411 1979 857 7~ 777 301 11 466 1980 996 91 905 350 12 542

Hospital Care Dollar Amount per Capital

1950 $2490 $745 $1745 $440 $87 $1218 1955 3504 783 2721 997 104 1620 1960 4946 981 3965 1797 125 2042 1965 7013 1203 5810 2929 156 2725 1966 7826 1225 6602 2986 153 3463 1967 9023 901 8122 3044 137 4941 1968 10276 1026 9249 3484 159 5607 1969 11655 1168 10487 4018 144 6324 1970 13305 1329 11976 4759 161 7036 1971 14567 1337 13250 5231 230 7769 1972 16359 1791 14568 5616 230 8722 1973 17936 2143 15793 6050 241 9502 1974 20571 2142 18429 6863 292 11284 1975 23697 1936 21761 6386 264 13111 1976 26977 2240 24737 9712 306 14719 1977 30220 2798 27422 10643 382 16397 1976 33409 2913 30496 11974 397 18125 1979 37398 3469 33929 13164 473 20302 1960 42960 3912 39068 15124 533 23410

Hospital Care Percentage Distribution

1950 1000 299 701 177 35 469 1956 1000 223 777 285 30 462 1960 1000 198 802 363 25 413 1965 1000 172 828 418 22 389 1966 1000 156 844 382 20 442 1967 1000 100 900 337 16 548 1968 1000 100 900 339 15 548 1969 1000 100 900 345 12 543 1970 1000 100 900 358 14 529 1971 1000 92 908 359 16 534 1972 1000 109 891 343 14 533 1973 1000 119 891 337 13 630 1974 1000 104 896 333 14 549 1975 1000 82 918 354 11 553 1976 1000 83 917 360 11 546 1977 1000 93 907 352 13 543 1978 1000 87 913 358 12 543 1979 1000 93 907 352 13 643 1960 1000 91 909 352 12 546

continued)

HEAlTH CARE FINANCING REVIEWSEPTEMBER 1981 39

TABLE 5 Personal Health Care Expenditures Aggregate and per Capita Amount and Percentege Distribution

by Source of Funds Selected Cahmdar Years 1950-1980 (Continued)

Direct All Third Parties Consumef Private Public

Total Payments Total Insurance Other Programs

Physicians Services Amount (Billions)

1950 1955

$27 $23 $5 $3 37 26 11 9 bull

$1 2

1960 57 37 20 16 4 1965 85 52 33 27 6 1966 1967

92 55 37 28 101 51 50 30 bull

8 20

1968 1969 1970 1971 1972

111 52 59 34 126 59 68 40 bull 143 65 79 49 bull 159 71 88 53 bull 172 73 99 60 bull

25 28 30 35 39

1973 1974

191 80 111 67 212 81 132 79 bull

44 53

1975 249 90 159 94 65 1976 1977 1978 1979

276 97 179 108 319 114 205 124 bull 358 131 227 135 bull 407 153 254 147 bull

71 80 92

107 1980 466 174 292 169 123

Physicians Services Dollar Amount per Capita1

1950 $1776 $1477 $299 $202 $05 $92 1955 2191 1530 661 609 05 147 1960 3092 2021 1071 867 05 199 1965 4282 2627 1855 1356 04 294 1966 4584 2746 1839 1410 04 424 1967 5012 2524 2489 1472 05 1012 1968 5434 2555 2879 1651 05 1223 1969 6129 2844 3284 1935 05 1345 1970 6874 3100 3774 2331 06 1438 1971 7535 3383 4152 2508 05 1639 1972 8036 3407 4628 2793 06 1829 1973 8845 3698 5147 3091 07 2049 1974 9760 3702 6057 3609 06 2442 1975 11338 4104 7234 4258 07 2969 1976 12417 4356 8061 4855 07 3199 1977 14205 5066 9139 5547 06 3585 1978 15803 5779 10024 5950 09 4065 1979 17765 6690 11075 6407 11 4656 1980 20118 7504 12615 7300 12 5303

Physicians Services Percentage Distribution

1950 1000 832 168 114 3 52 1955 1000 698 302 232 2 67 1960 1000 654 346 280 2 64 1965 1000 614 386 317 1 69 1966 1000 599 401 308 1 93 1967 1000 503 497 294 1 202 1968 1000 470 530 304 1 226 1969 1000 464 536 316 1 219 1970 1000 451 649 339 1 209 1971 1000 449 551 333 1 217 1972 1000 424 576 348 1 228 1973 1000 418 582 349 1 232 1974 1000 379 621 370 1 250 1975 1000 362 638 376 1 262 1976 1000 351 649 391 1 258 1977 1000 357 643 390 1 252 1978 1000 366 634 377 1 267 1979 1000 377 623 361 1 262 1980 1000 373 627 363 1 264

(continued)

HEALTH CARE FINANCING REVIEWSEPTEMBER 1181 40

TABLE 5 Persooel Hulth Care Expenditurts Aggregate and pBr Capita Amount Bnd Percentaga Distribution

by Souroe of Funds Seltcted Calendar Vun 1950-1980 Continued)

Direct All Third Parties Consumer Private Public

Total Payments Total Insurance Other

All Other Personal Health Care Amount (Billions

Programs

1950 1955

$43 $37 $6 3) $2 61 52 9 2 $4

6 1960 89 75 14 1 3 10 1965 134 109 25 3 6 17 1966 147 115 32 3 5 24 1967 160 119 40 5 5 30 1968 181 133 48 4 6 38 1969 202 147 55 6 6 43 1970 231 168 63 8 6 48 1971 252 178 74 10 7 57 1972 281 199 82 11 8 63 1973 309 216 93 14 8 71 1974 349 237 112 17 9 87 1975 397 257 140 22 10 108 1976 443 284 160 31 11 117 1977 491 311 180 37 12 131 1978 1979

552 345 207 44 13 628 240 54 14 149172

1980 717 441 276 61 15 199

All Other Personal Health Care2 Dollar Amount per Capital

1950 $2772 $2390 $382 $115 $267 1955 3534 3111 523 148 375 1960 4844 4064 780 54 162 564 1965 6778 5521 1257 141 238 879 1966 7351 5754 1597 166 248 1183 1967 7893 5900 1993 227 261 1505 1968 8641 6494 2347 219 274 1854 1969 9781 7121 2660 281 289 2091 1970 11050 8046 3004 396 310 2298 1971 11941 8442 3500 461 352 2687 1972 13159 9313 3845 528 363 2955 1973 14340 10022 4318 639 372 3307 1974 16054 10886 5168 777 402 3989 1975 18062 11687 6375 1031 447 4897 1976 19973 12777 7196 1411 496 5288 1977 21891 13858 8032 1656 538 5838 1978 24345 15228 9117 1955 580 6581 1979 27406 16918 10488 2344 630 7514 1960 30963 19049 11914 2641 691 8583

All Other Personal Health Care2 Percentage Distribution

1950 1000 862 138 3) 42 96 1955 1000 855 144 41 103 1960 1000 839 161 11 33 116 19 1000 815 185 21 35 130 1965 1000 783 217 23 34 161 1967 1000 747 253 29 33 191 1968 1000 735 265 25 31 210 1969 1000 728 272 29 30 214 1970 1000 728 272 36 28 208 1971 1000 707 293 39 29 225 1972 1000 708 292 40 28 225 1973 1000 699 301 45 26 231 1974 1000 678 322 48 25 248 1975 1000 647 353 57 25 271 1976 1000 640 360 71 25 265 1977 1000 633 357 76 25 267 1971l 1000 626 374 80 24 270 1979 1000 617 383 86 23 274 1980 1000 615 385 85 22 277

Less than $100 million lfaoed on July 1 JIOIJltllation etimMes _ich include the reident US population and that of the outlying territories plus Feden~l military and civilian employees and their dependents ovampr 2Dentiotgt bullervlces other prolessional bullervices drugs and medical wndries eyeglasses and appliances nurting home care and other personal heelth care Jlnduded with direct payment$ 1eparate data nltgtt available

HEALTH CARE FINANCING AEVIEWISEPTEMBEA 1981 41

TABLE6A Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1980

Source of Payment Total Hos-pi tal Quo

Phy-sidans

s

Den- Other tists Prof Drugs Svcs Svcs

Amount (Billions)

Glasses Nursing Home Care

Other Personal Health

Total $2179 $996 $466 $159 $54 $192 $51 $207 $54

Direct Payments 706 91 174 120 32 159 44 87

Third-Party Payments Private Health Insurance

1473 561

905 350

292 169

39 22 33 33 7 18

7

2 120

1 54

Philanthropy and Industrial Jn-Piant 29 12 1 1 14

Government 864 542 123 6 15 16 5 118 40

Federal Medicare1 Medicaid2 Other

625 356 139 130

413 263

52 98

94 77 13 4

3 10 8 7

3 3 7

1

4

4

1

64 4

57 4

28 1 5

22

State and Local 239 129 29 3 4 8 1 53 12 Medicaid2 114 43 10 2 2 6 47 4 Other 124 86 18 2 2 1 7 9

Dollar AmountperCapita3

Total $94062 $42980 $20118 $6842 $2330 $8300 $2210 $8946 $2334

Direct Payments 30465 3912 7504 5161 1384 6863 1888 3753

Third-Party Payments Private Health Insurance

63597 25065

39068 15124

12615 7300

1682 947 1437 1427 295 765

321 89

5193 54

2334

Philanthropy and Industrial In-Plant 1236 533 12 25 54 612

Government 37296 23410 5303 254 626 672 232 5075 1722

Federal Medicare1

26991 15376

17832 11344

4064 3344

145 450 336 299

194 156

2770 169

1200 64

Medicaid2 5996 2246 544 113 129 318 2446 200 Other 5619 4242 177 32 21 19 38 155 935

State and Local Medicaid2

10305 4935

5579 1852

1238 449

109 176 336 93 107 262

38 2306 2017

523 155

Other 5370 3726 789 16 70 74 38 289 368 Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 324 91 373 754 594 827 855 419

Third-Party Payments Private Health Insurance

676 266

909 352

627 363

246 209

406 127

173 92

145 40

561 7

1000

Philanthropy and Industrial Jn-Plant 13 12 1 11 6 262

Government 396 545 264 37 269 81 105 567 738

Federal 287 415 202 21 193 41 88 310 514 Medicare1 163 264 166 128 71 19 27 Medicaid2 64 52 27 17 55 38 273 86 Other 60 99 9 5 9 2 17 17 401

State and Local 110 130 62 16 76 40 17 258 224 Medicaid2 52 43 22 14 46 32 225 66 Other 57 87 39 2 30 9 17 32 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 42

TABLE6B Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1979

Hos- Phy- Den- Other Nursing Other Source of Pa~ment Total pital sicians tists Prof Drugs Glasses

Calte Sbullcs s bull scs Amount (Billions)

Home Personal Care Health

Total $1891 $857 $407 $135 $47 $172 $46 $178 $50

Direct Payments 620 79 153 101 29 142 40 76

Third-Party Payments 1271 777 254 34 18 30 6 102 50 Private Health Insurance 502 301 147 29 6 16 2 1 Philanthropy and Industrial

In-Plant 26 11 1 1 13 Government 744 465 107 5 12 14 4 99 37

Federal 531 349 80 3 8 7 4 54 26 Medicare1 293 215 65 6 3 4 1 Medicaid2 119 44 12 2 2 7 47 4 Other 119 89 4 1 1 3 20

State and Local 213 116 26 2 3 7 1 45 11 Medicaid2 98 36 10 2 2 5 39 3 Other 115 80 17 1 2 1 6 8

Dollar Amount per Capita 3

Total $82568 $37398 $17765 $5895 $2047 $7503 $2020 $7762 $2178

Direct Payments 27077 3469 6690 4402 1248 6211 1742 3315

Third-PartY Payments 55492 33929 11075 1493 800 1292 278 4447 2178 Private Health Insurance 21905 13154 6407 1266 258 679 82 58 Philanthropy and Industrial

In-Plant 1114 473 11 23 47 560 Government 32473 20302 4656 226 519 613 196 4341 1618

Federal 23178 15217 3512 126 368 306 161 2368 1120 Medicarel 12809 9403 2835 241 125 158 48 Medicaid2 5178 1919 509 103 106 289 2073 179 Other 5191 3895 168 24 21 18 37 137 893

State and Local 9295 5085 1145 100 151 306 35 1973 498 Medicaid2 4278 1590 422 85 88 239 1717 138 Other 5017 3496 723 15 63 68 35 257 360

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 328 93 377 747 609 828 862 427

Third-Party Payments 672 907 623 253 391 172 138 573 1000 Private Health Insurance 265 352 361 215 126 91 40 8 Philanthropy and Industrial

In-Plant 13 13 1 11 6 257 Government 393 543 262 38 253 82 97 559 743

Federal 281 407 198 21 180 41 80 305 514 Medicare1 155 251 160 118 62 20 22 Medicaid2 63 51 29 17 52 38 267 82 Other 63 104 9 4 10 2 18 18 410

State and Local 113 136 64 17 74 41 17 254 229 Medicaid2 52 43 24 14 43 32 221 63 Other 61 93 41 3 31 9 17 33 165

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 43

TABLE6C Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1978

Hos- Phy- Den- Other Nursing Other Source of Patment Total pi tal sicians tists Prof Drugs Glasses Home Personal

Calaquo s Svcs Care Healths Amount (Billions)

Total $1667 $757 $358 $118 $41 $154 $41 $152 $45

Direct Payments 542 66 131 90 25 128 36 66

Third-Party Payments 1125 691 227 28 16 26 5 86 45 Private Health Insurance 450 271 135 23 6 13 2 1 Philanthropy and Industrial

In-Plant 22 9 1 12 Government 652 411 92 5 10 13 4 84 33

Federal 464 306 69 3 7 7 3 47 23 Medicare1 249 184 54 5 2 3 1 Medicaid2 105 39 11 2 2 6 40 4 Other 110 83 4 1 1 3 19

State and Local 188 105 23 2 3 6 1 38 10 Medicaid2 83 31 9 2 2 5 32 3 Other 104 73 14 1 1 1 5 8

Dollar Amount per Capita3

Total $73557 $33409 $15803 $5198 $1818 $6803 $1824 $6712 $1990

Direct Payments 23920 2913 5779 3962 1113 5660 1587 2906

Third-Partv Payments 49637 30496 10024 1237 704 1142 237 3807 1990 Private Health Insurance 19880 11974 5950 1018 244 573 73 48 Philanthropy and Industrial

In-Plant 987 397 09 20 42 519 Government 28771 18125 4065 219 440 569 164 3717 1472

Federal 20479 13509 3032 125 312 290 133 2062 1016 Medicarel 11008 8139 2379 201 99 152 38 Medicaid2 4616 1718 496 99 91 272 1785 156 Other 4855 3652 158 26 20 17 34 125 823

State and Local 8291 4616 1032 93 128 279 31 1655 456 Medicaid2 3682 1373 396 79 73 218 1427 118 Other 4609 3243 636 14 56 62 31 229 338

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 325 87 366 762 613 832 870 433

Third-Pany Payments 675 913 634 238 387 168 130 567 1000 Private Health Insurance 270 358 377 196 134 84 40 7 Philanthropy and Industrial

In-Plant 13 12 1 11 6 261 Government 391 543 257 42 242 84 90 554 739

Federal 278 404 192 24 172 43 73 307 511 Medicare1 150 244 1amp1 111 54 23 19 Medicaid2 63 51 31 19 50 40 266 78 Other 66 109 10 5 11 3 18 19 413

State and Local 113 138 66 18 70 41 17 247 229 Medicaid2 50 41 26 15 40 32 213 59 Other 63 97 40 3 31 9 17 34 170

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 44

TABLE 60 Penonal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1975

Source of Payment Total Hos-pital

bull Phy-

sicians Svcs

Den- Other tists Prof Drugs Sv Svcs

Glasses Nursing Home Care

Other Personal Health

Amount Billions)

Total $1168 $521 $249 $82 $26 $119 $32 $101 $37

Direct Payments 390 43 90 68 17 102 28 43

ThirdmiddotParty Payments Private Health Insurance

778 301

479 184

159 94

15 10 18 10 4 7

3

1 58

1 37

Philarithropy and Industrial lnmiddotPiant 16 6 1 9

Government 461 288 65 5 6 10 2 57 28

Federal 314 203 46 3 4 5 2 32 20 Medicaret Medicaid2 Other

156 76 83

116 26 60

33 10

3

2 2 1 5 1

1

1

3 27

2 3

16

State and Local 147 86 19 2 2 5 1 25 8 Medicaid2 60 21 8 2 1 4 22 2 Other 87 65 11 1 1 1 3 6

Dollar Amount per Capita3

Total $53097 $23697 $11338 $3746 $1191 $5430 $1434 $4586 $1675

Direct Payments 17727 1935 4104 3076 752 4625 1294 1940

Third-Party Payments Private Health Insurance

35371 13676

21761 8386

7234 4258

670 439 805 458 164 338

140 37

2646 35

1675

Philanthropy and Industrial In-Plant 718 264 07 14 28 406

Government 20977 13111 2969 212 261 467 104 2583 1270

Federal 14294 9218 2112 125 170 240 80 1448 899 Medicare1 Medicaid2

7089 3443

5284 1201

1509 477

90 93 63 226

53 132 20 1237 145

Other 3762 2733 127 32 17 13 28 79 733

State and local 6684 3893 857 87 90 227 23 1135 371 Medicaid2 2713 949 377 74 50 179 978 106 Other 3971 2943 480 14 40 48 23 157 265

Percentage Distribution

Total 1000 1000 1000 1000 10000 1000 1000 1000 1000

Direct Payments 334 82 362 821 632 852 902 423

ThirdmiddotParty Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

666 258

14 395

918 354

11 553

638 376

1 262

179 122

57

368 138

12 219

148 62

86

98 26

72

577 8

6 563

1000

242 758

Federal Medicaret

269 134

389 223

186 133

33 143 76

44 56 37

316 29

536 12

Medicaid2 65 51 42 25 53 42 270 86 Other 71 115 11 8 14 2 19 17 438

State and Local Medicaid2

126 51

164 40

76 33

23 20

76 42

42 33

16 247 213

221 63

Other 75 f24 42 4 34 9 16 34 158

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 45

TABLE 6E Personal Health Care Expenditures by Source of Funds and Type of Expenditure Aggregate and per Capita

Amount and Percentage Distribution Calendar Year 1970

Source of Payment Total Hos-pital Care

Phy-sicians

Sos

Den- Other tists Prof Drugs s Svcs

Glasses Nursing Home Care

Other Personal Health

Amount (Billions)

Total $651 $278 $143 $47 $16 $80 $19 $47 $21

Direct Payments 260 28 65 43 11 72 18 24

Third-Party Payments Private Health Insurance

391 156

250 99

79 49

5

2 5 3

8

3 1 23 21

Philanthropy and Industrial In-plant

Government 10

225 4

147 30 2 2 5 1 23 6

15

Federal 145 95 21 1 1 2 1 13 9 Medicarel 71 51 16 1 3 Medicaid2 29 12 4 1 2 8 1 Other 46 32 1 3 8

State and Local 79 52 9 1 1 2 9 5 Medicaid2 Other

24 56

10 41

3 1 2

5 1 6 3

1

4

Dollar Amount per Capita3

Total $31229 $13305 $6874 $2277 $764 $3833 $933 $2252 $992

Direct Payments 12475 1329 3100 2052 524 3454 880 1136

Third-Party Payments Private Health Insurance

18755 7487

11976 4759

3774 2331

225 118

240 125

379 147

53

01 1116

06 992

Philanthropy and Industrial In-Plant 496 181 05 10 16 284

Government 10772 7036 1438 107 106 232 51 1094 708

Federal Medicare1 Medicaid2 Other

6966 3405 1373 2188

4563 2430

587 1546

1025 780 182 64

62

44

19

67

38

20

09

115

108 06

37

22

16

644 127 373 144

451 08 59

384

State and Local 3806 2473 413 45 38 118 14 449 256 Medicaid2 1129 485 150 36 16 89 309 43 Other 2677 1987 263 08 22 28 14 141 213

Percentage Distribution

Total 1000 1000 1000 1000 1000 1000 1000 1000 1000

Direct Payments 399 100 451 901 686 901 943 504

Third-Party Payments Private Health Insurance

601 900 240 358

549 99 314 99 339 52 163 38

57 1

496 1000 3

Philanthropy and Industrial In-plant

Government 16 14

345 529 1 13

209 47 138 61 55 7 286

486 714

Federal Medicare1 Medicaid2 Other

223 343 109 183 44 44 70 116

149 27 88 30 113 50 26 19 26 28 9 8 12 2

40 23

17

286 455 56 8

166 60 64 387

State and Local Medicaid2

122 186 36 36

60 20 50 31 22 16 21 23

15 200 259 137 43

Other 86 149 38 4 29 7 15 63 215

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 46

Personal Health Care Ex

Source of Payment

TABLE 6F penditures by Source of Funds and Type of Expenditure AggAmount and Percentage Distribution Calendar Year 1965

Hosmiddot Phy- Den- Other Total pita I sicians tists Prof Drugs

Care s scs Svcs

regate and per Capita

Nursing Other Glasses Home Personal

Care Health

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-Plant Government

Federal Medicare1 Medicaid2 Other

State and Local Medicaid2 Other

Total

Direct Payments

Third-Party Payments Private Health Insurance Philanthropy and Industrial

In-plant Government

Federal Medicaret Medicaid2 Other

State and Local Medicaid2 Other

Amount (Billions)

$358 $139 $85 $28 $10 $52

185 24 52 27 9 49

173 115 33 1 2 3 88 58 27 1 1

8 3 77 54 6 2

36 24 2 1

36 24 2 1

41 30 4 1

41 30 4 1

Dollar Amount per Capita3

$18073 $7013 $4282 $1419 $522 $2618

9351 1203 2627 1374 440 2454

8722 5810 1655 45 82 164 4425 2929 1356 21 54 65

398 156 04 09 3898 2725 294 25 19 99

1832 1228 76 16 06 61

1832 1228 76 16 06 61

2066 1497 218 08 13 39

2066 1497 218 08 13 39

Percentage Distribution

1000 1000 1000 1000 bull1000 1000

517 172 614 968 843 937

483 828 386 32 157 63 245 418 317 15 103 25

22 22 1 17 216 389 69 17 37 38

101 175 18 11 12 23

101 175 18 11 12 23

114 213 51 6 25 15

114 213 51 6 25 15

$12 $21 $11

11 13

7 11

4 7 7

5 4

5 4

3 3

3 3

$593 $1047 $579

577 676

15 371 579 01

11 218 15 360 361

06 232 206

06 232 206

08 127 155

08 127 155

1000 1000 1000

974 645

26 355 1000 1 1

10 376 25 343 624

11 222 355

11 222 355

14 121 268

14 121 268

1Total expenditures from trust funds for benefits trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3Based on July 1 population estimates which include the population of outlying territories and armed forces and Federal civilian employeesand their dependenu overseas

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 47

TABLE 7A A Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1980

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ------

Amount (Billions)

Total Spending (Public and Private) $2356 $2179 $996 $466 $159 $54 $192 $51 $207 $54 $104 $73

All Public Programs 969 864 542 123 6 15 16 5 118 40 32 73 Total Federal Expenditures 657 625 4L~ 94 3 10 8 4 64 28 20 12 Total State and Local Expenditures 313 239 12~ 29 3 4 8 1 53 12 13 61

Medicare1 (Federal) 367 356 263 77 - 7 - 4 4 1 11

Medicaid2 266 253 95 23 5 5 13 - 103 8 13 Federal Expenditures 146 139 52 13 3 3 7 - 57 5 7 State and local Expenditures 120 114 43 10 2 2 6 - 47 4 5

Other Public Assistance Payments for Medical Care 16 16 6 2 - - 1 - 7 1

Federal State and local 16 16 6 2 - - 1 - 7 1

Veterans Medical Care 58 58 48 1 1 - - 1 4 4

Defense Department Medical Care3 42 42 33 1 - - - - - 7

Workers Compensation 46 39 20 16 - 1 1 1 - - 7 Federal Employees 1 1 1

State and local Programs 45 38 19 16 - 1 1 1 - - 7m gt ~ State and Local Hospitals (net)4 60 60 60 n bullbullm z gtz ~

Other Public Expenditures for Personal Health Care5 40 39 17 3 - 1 - - - 18 1

Federal 29 29 16 2 - - - - - 10 State and local 11 10 1 1 - - - - 8

Government Public Health Activities 73 - - - - - - - - - - 73 z Q

bullm

Federal 12 - - - - - - - - - - 12State and local 61 - - - - - - - - - - 61

sm bull~ m ~ ~ m bullbull m bull~

Addendum Medicare and Medicaid 630 606 358 100 5 12 13 4 107 6 24

Government Public Health Activities 1Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium paymants paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance reltipients and for persons who are medically indigent31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only thosa made under contract medical programs4Expenditures for State and local government hospitals not ol~et by other revenues Sncludes program spanding for maternal and child health vocational rehabilitation medical paymants temporary disability insurance medical payments PHS and other Federal hospitalaxpenses Indian Health SeNice costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

bull m bull~bull nbull~ m ~

z ~ n z Q

~ m s ~ ~ m ~ m ~ m m ~ -G

~

TABLE 78 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1979Personal Health Care

NursingProgram Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA----- shy

Amount (Billions)

Total Spending (Public and Private) $2043 $1891 $857 $407 $135 $47 $172 $46 $178 $50 $89 $84

All Public Programs 836 744 465 107 5 12 14 4 99 37 29 64 Total Federal Expenditures 562 531 349 80 3 8 7 4 54 26 18 13 Total State and Local Expenditures 274 213 116 26 2 3 7 1 45 11 11 50

Medicare1 (Federal) 303 293 215 65 - 6 - 3 4 1 10

Medicaid2 228 217 80 21 4 4 12 - 87 7 11 Federal Expenditures 125 119 44 12 2 2 7 - 47 4 7 State and Local Expenditures 102 98 36 10 2 2 5 - 39 3 4

Other Public Assistance Payments for Medical Care 15 15 5 1 - - 1 - 6

Federal State and Local 15 15 5 1 - - 1 - 6

Veterans Medical Care 53 53 44 1 - - - - 3 4

Defense Department Medical Care3 38 38 29 1 - - - - - 7

Workers Compensation 41 35 18 15 - 1 1 1 - - 6 Federal Employees 1 1 1 State and Local Programs 40 34 17 14 - 1 1 1 - - 6

State and Local Hospitals (net)4 57 57 57

Other Public Expenditures for Personal Health Care5 38 37 16 3 - 1 - - - 17 1

Federal 27 27 15 2 - - - - - 9 State and Local 10 10 1 1 - - - - - 8

Government PubIic Health Activities 64 - - - - - - - - - - 64 Federal 13 - - - - - - - - - - 13 State and Local 50 - - - - - - - - - - 50

Addendum Medicare and Medicaid 528 507 296 86 4 10 12 3 90 5 21

Government Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 21ocludes funds paid into Medicare trust funds by States under buyin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 3lncludes care for retirees and military dependents payments for se~Vices other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 5lncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hoSPital

expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents

overseas

0 TABLE 7C

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1978

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs ~Home Other Admin ~

Amount (Billions)

Total Spending (Public and Private) $1795 $1667 $757 $358 $118 $41 $154 $41 $152 $45 $75 $53

All Public Programs 731 652 411 92 5 10 13 4 84 33 26 53 Total Federal Expenditures 493 464 306 69 3 7 7 3 47 23 17 12 Total State and Local Expenditures 238 188 105 23 2 3 6 1 38 10 9 41

Medicare1 (Federal) 259 249 184 54 - 5 - 2 3 1 10

Medicaid2 198 188 70 20 4 4 11 - 73 6 10 Federal Expenditures 111 105 39 11 2 2 6 - 40 4 6 State and Local Expenditures 87 83 31 9 2 2 5 - 32 3 4

Other Public Assistance Payments for Medical Care 13 13 5 1 - - 1 - 5

Federal State and Local 13 13 5 1 - - 1 - 5

Veterans Medical Care 50 49 41 1 - - - - 3 4

Defense Department Medical Care3 34 34 27 1 - - - - - 6

Workers Compensation 35 30 15 13 - 1 1 1 - - 5 Federal Employees 1 1 1 State and Local Programs 34 29 14 12 - 1 1 1 - - 5

~ State and Local Hospitals (net)4 53 53 53

~ Other Public Expenditures for ~ Personal Health Care5 36 35 15 2 - 1 - - - 16 1 ~ Federal 26 26 14 2 - - - - - 9

State and Local 10 10 1 1 - - - - - 7 ~ Government Public Health Activities 53 - - - - - - - - - - 53

~ Federal 12 - - - - - - - - - - 12 Q raquo State and Local 41 - - - - - - - - - - 41

~ m

~

~ m mraquo

Addendum Medicare and Medicaid 454 435 254 74 4 8 11 2 76 4 20

Govttrnment Public Health Activities 1 Total expenditures from trust funds for benefiH and administrative costs trust fund income includes premium payments paid bY or on behalf of enrollees 2tncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent llncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditlres for State and local government hospitals not offset by other revenues 51ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service C0$15 alcoholism drug abuse and mental health expenditures and school health exp11nditures6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their diPendents overseas

m ~

~ n ~ ~ m ~ z ~ ~ Q ~ m s m

~ m ~ m ~bullm ~

~

TABLE70 Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

calendar Year 1975

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA-- -- -- -- --shy -- ---

Amount (Billions)

Total Spending (Public and Private) $1243 $1168 $521 $249 $82 $26 $119 $32 $101 $37 $44 $32

All Public Programs 511 461 288 65 5 6 10 2 57 28 18 32 Total Federal Expenditures 338 314 203 46 3 4 5 2 32 20 12 12 Total State and Local Expenditures 173 147 86 19 2 2 5 1 25 8 7 19

Medicare1 (Federal) 163 156 116 33 - 2 - 1 3 - 7

Medicaid2 142 135 47 19 4 2 9 - 49 6 6 Federal Expenditures 79 76 26 10 2 1 5 - 27 3 4 State and Local Expenditures 62 60 21 8 2 1 4 - 22 2 3

Other Public Assistance Payments for Medical Care 9 9 3 1 - - 1 - 3

Federal State and Local 9 9 3 1 - - 1 - 3

Veterans Medical Care 35 35 29 - 1 - - - 2 3

Defense Department Medical Care3 28 28 22 1 - - - - - 5

Workers Compensation 24 20 10 9 - 1 - - - - 4 Federal Employees 1 1 State and Local Programs 24 20 10 9 - 1 - - - - 4

State and Local Hospitals (netJ4 51 51 51

Other Public Expenditures for Personal Health CareS 27 27 10 2 - - - - - 14

Federal 20 19 9 2 - - - - - 8 State and Local 8 8 1 1 - - - - - 6

Government Public Health Activities 32 - - - - - - - - - - 32 Federal 12 - - - - - - - - - - 12 State and Local 19 - - - - - - - - - - 19

~

Addendum Medicare and Medicaid 302 289 163 52 4 4 9 1 52 4 13

Government Public Health Activities lTotal expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buymiddotin agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues Slncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 poPtJiation estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents ~

TABLE 7E

Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1970

Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin--shy GPHA

Amount (Billions)

Total Spending (Public and Private) $693 $651 $278 $143 $47 $16 $80 $19 $47 $21 $27 $14

All Public Programs 250 225 147 30 2 2 5 1 23 15 11 14 Total Federal Expenditures 157 145 95 21 1 1 2 1 13 9 6 6 Total State and Local Expenditures 92 79 52 9 1 1 2 - 9 5 5 8

Medicare 1 (Federal) 75 71 51 16 1 - - 3 - 4

Medicaid2 55 52 22 7 2 1 4 - 14 2 3 Federal Expenditures 30 29 12 4 1 2 - 8 1 1 State and Local Expenditures 25 24 10 3 1 - 2 - 6 1 1

Other Public Assistance Payments for Medical Care 9 9 2 1 - - - - 5

Federal 2 2 - - - - - - 2 State and Local 6 6 2 1 - - - - 3

Veterans Medical Care 18 17 15 - - - - 1 1

Defense Department Medical Care3 18 18 13 - - - - - 4

Workers Compensation 14 11 5 5 - - - - - - 4 Federal Employees State and Local Programs 14 10 5 4 - - - - - - 4

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State and local Hospitals (net)4 33 33 33

Other Public Expenditures for Personal Health Care5 14 14 5 1 - - - - - 7

Federal 8 8 4 1 - - - - - 3 State and Local 6 6 1 - - - - - - 4

Government Public Health Activities 14 - - - - - - - - - - 14 Federal 6 - - - - - - - - - - 6

State and Local 8 - - - - - - - - - - 8

Addendum Medicare and Medicaid 129 122 73 23 2 2 4 - 17 1 6

bullGovernment Public Health Activities 1 Total expenditures from trust funds for benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy(n agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenuesSincludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures 6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

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TABLE7F Expenditures for Health Services and Supplies Under Public Programs by Source of Funds and Type of Expenditure

Calendar Year 1965 Personal Health Care

Nursing Program Area Total Total Hosp Phys Dent Prof Drugs Glasses Home Other Admin GPHA ----shy

Amount (Billions)

Total Spending (Public and Private) 382 $358 $139 $85 $28 $10 $52 $12 $21 $11 $16 $8

All Public Programs 88 77 54 6 - - 2 - 7 7 2 8 Total Federal Expenditures 40 36 24 2 - - 1 - 5 4 - 3 Total State and Local Expenditures 48 41 30 4 - - 1 - 3 3 2 5

Medicare1 (Federal)

Medicaid2 Federal Expenditures State and Local Expenditures

Other Public Assistance Payments for Medical Care 21 21 9 2 - - 2 - 7 1

Federal 14 14 6 1 - - 1 - 5 1 State and Local 8 8 3 1 - - 1 - 3

Veterans Medical Care 11 11 11

Defense Department Medical Care3 9 9 6 - - - - - - 2

Workers Compensation 8 6 2 3 - - - - - - 2 Federal Employees State and Local Programs 8 6 2 3 - - - - - - 2

State and Local Hospitals (net)4 24 24 24

Other Public Expenditures for Personal Health Care5 7 6 2 - - - - - - 4

Federal 3 3 2 - - - - - - 1 State and Local 4 4 1 - - - - - - 3

Government Public Health Activities 8 - - - - - - - - - - 8 Federal 3 - - - - - - - - - - 3 State and Local 5 - - - - - - - - - - 5

Addendum Medicare and Medicaid

Government Public Health Activities 1Total expenditures from trust funds lor benefits and administrative costs trust fund income includes premium payments paid by or on behalf of enrollees 21ncludes funds paid into Medicare trust funds by States under buy-in agreements to cover premiums for public assistance recipients and for persons who are medically indigent 31ncludes care for retirees and military dependents payments for services other than hospital care and other health care represent only those made under contract medical programs 4Expenditures for State and local government hospitals not offset by other revenues 51 ncludes program spending for maternal and child health vocational rehabilitation medical payments temporary disability insurance medical payments PHS and other Federal hospital expenses Indian Health Service costs alcoholism drug abuse and mental health expenditures and school health expenditures

(71 (r)

6Based on July 1 population estimates which include the resident US population and that of the outlying territories plus Federal military and civilian employees and their dependents overseas

Acknowledgments

The National Health Accounts which are discussed In this article are the collective effort of the Division of National Cost Estimates Office of Financial and Actuarial Assistance This article is the result of the untiring work of the staff members of the Division Charles A Fisher (Acting Director) Ross H Arnett Ill Marjorie Smith Carroll Laurie S Feinberg Mark S Freeland Katherine A Levit and Carol Ellen Schendler

References

Blumberg MarkS Provider Price Changes for Improved Health Care Use Health Handbook George K Chacko editor Amsterdam North Holland 1979

Carroll Marjorie Smith and Ross H Arnett Ill Private Health Insurance Plans In 1979 Coverage Enrollment and Financial Experience Health care Financing Review Volume 3 Number 1 Summer 1981

Cooper Barbara S Robert M Gibson and Dorothy P Rice US National Health Accounts Historical Perspectives Curmiddot rent Issues and Future Projections Paper presented at the European conference on the Accounts of Health Paris France March 1980

Falk IS Margaret C Klem and Nathan Sinai The Incidence of Illness and the Receipt and Costs of Medical Care Among Representative Families Chicago University of Chicago Press 1933

Feder Judith and Bruce Spitz The Politics of Hospital Paymiddot ment in National Health Insurance Conflicting Goals and Polley Choices Feder Holahan and Marmor ads Washingmiddot ton DC The Urban Institute 1980

Freeland Mark S Gerard Anderson and Carol Ellen Schendler National Hospital Input Price Index Health Care Financing Review Volume 1 Number 1 Summer 1979

HEALTH CARE FINANCING REVIEWSEPTEMBER 1981 54

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