Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Appendix B. Development of Mcbs and Meps Estimates for This Report

04/01/2000

This report uses 1996 Medicare Current Beneficiary Survey (MCBS) data to estimate prescription drug coverage, utilization, and spending for Medicare beneficiaries. 1996 Medical Expenditure Panel Survey (MEPS) data are used to provide estimates for the non-Medicare population. The MEPS surveyed a sample of the US civilian, noninstitutionalized population, including Medicare beneficiaries. MEPS data could therefore have been used for both the Medicare and non-Medicare groups.

There are several reasons for using the MCBS data instead of MEPS for the Medicare population. MCBS has a much larger sample of Medicare beneficiaries than MEPS, 10,869 used for this study, as opposed to 2,892 in the MEPS panel. This allows more reliable estimates for subgroups of the Medicare population defined by demographic or health-related factors. In addition, MCBS has been conducted continuously since 1992. It therefore allows some analysis of trends over time. MEPS began in 1996; its predecessor, the 1987 National Medical Expenditure Survey (NMES) was so different in its data collection for prescription drug spending and coverage that meaningful comparisons are not possible. The one exception where MEPS was used instead of MCBS for estimates relating to Medicare beneficiaries is the analysis of prices in Chapter 3. As discussed below, MEPS had data not available in MCBS for comparing drug prices.

Data collection and estimation procedures under the two surveys are different in a number of respects. This means that, while the MCBS results for the Medicare population and the MEPS results for the non-Medicare population are often quite similar, they cannot be directly compared. In addition, MCBS estimates for the Medicare population are different from the Medicare estimates that would have been produced if MEPS had been used. Use of MEPS results would not have affected the most important findings of this report: that a large share of the Medicare population is without drug coverage, that beneficiaries without coverage receive fewer and less costly prescription drugs, and that they pay higher prices for the drugs they receive than are paid by beneficiaries with coverage for the same drugs. Estimates of the magnitude of these effects would, however, have been different. The following is a brief overview of how coverage, utilization, and spending are estimated under MCBS and MEPS, and of how their findings differ.

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