The Concentration of Medical Spending: an Update

34 Pages Posted: 10 Feb 2000 Last revised: 8 May 2000

See all articles by David M. Cutler

David M. Cutler

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Ellen Meara

Harvard Medical School; National Bureau of Economic Research (NBER)

Date Written: August 1999

Abstract

In the last two decades, Medicare spending has doubled in real terms despite the fact that the health of Medicare beneficiaries improved over this period. The goals of this paper are to document how trends in spending by age have changed among elderly Medicare beneficiaries in the last decade and to reconcile the decline in disability rates with rapid increases in spending among the elderly. First, we conclude that the trend of disproportionate spending growth among the oldest old has continued between 1985 and 1995. Spending among the younger elderly, those 65-69 rose by two percent annually in real per person terms. In contrast, spending for those over age 85 rose by four percent. Second we show that the reasons for the large increase in spending on the oldest elderly relative to the younger elderly is the rapid increase in the use of post-acute services such as home health care and skilled nursing care. Spending on post-acute care for the very old has risen 20 percent per year in the last decade.

Suggested Citation

Cutler, David M. and Meara, Ellen, The Concentration of Medical Spending: an Update (August 1999). NBER Working Paper No. w7279. Available at SSRN: https://ssrn.com/abstract=198991

David M. Cutler (Contact Author)

Harvard University - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Harvard University - Harvard Kennedy School (HKS) ( email )

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Ellen Meara

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-3537 (Phone)
617-432-0173 (Fax)

National Bureau of Economic Research (NBER)

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United States

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