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Medical Expenditure Panel Survey 

Agency for Healthcare Research and Quality

Briefly Stated

In 1996, 86 percent of the U.S.

community population had medical

expenses. Nearly three-quarters of the

population had ambulatory care

expenses, and nearly two-thirds had

expenses for prescribed medicines.

The average expense per person with

any medical expense was about $2,400.

However, half of all people with medical

expenses had expenses of less than

$559 (the median value).

Only small proportions of the

population had expenses for inpatient

hospital and home health services, but

these health services had the highest

average annual expenses.

Per Capita Health

Care Expenses, 1996

Estimates for the U.S. Civilian

Noninstitutionalized Population

Introduction

The Medical Expenditure Panel Survey

(MEPS) is the Nation’s primary source of detailed,

nationally representative data on medical care

spending and sources of payment for the U.S.

civilian noninstitutionalized (community)

population. MEPS provides researchers and

policymakers with data on how much is paid for

various types of health care services and who pays

for them. This Highlights presents data on the

proportion of people with expenses, as well as

average and median expenses per person, by type of

service. Detailed information of this sort has not

been available since data from the 1987 National

Medical Expenditure Survey (NMES) were released

in the early 1990s.

Definitions

Expenses in MEPS are defined as the sum of

direct payments for care provided during the year,

including out-of-pocket payments and payments by

private insurance, Medicare, Medicaid, and other

sources. MEPS and the Health Care Financing

Administration’s National Health Accounts (NHA)

have substantial differences in methodologies and

objectives. In particular, the NHA are based on a

composite of data from multiple sources at the

aggregate national level and are used primarily to

track aggregate medical expenditures in the U.S.

economy. In contrast, MEPS collects survey data

on individuals that can be used to estimate direct

payments made for medical care and services

purchased by the civilian noninstitutionalized

population. Data from the survey are widely used

for behavioral and socioeconomic analyses

May 2000

Number 12
of the relationship between individual characteristics

and health care spending. 

National health care expenditure estimates from

MEPS are lower than those estimated by the NHA for

several reasons. First, the NHA are more expansive in

the scope of included expenditures, including, for

example, expenditures for over-the-counter drugs,

nursing home care, program administration,

Government public health activities, and construction,

as well as some hospital and physician revenues not

associated with patient care. Second, the NHA include

health care expenditures for individuals who are not

members of the civilian noninstitutionalized population,

such as individuals in the military and those residing in

nursing homes, assisted living facilities, and prisons.

Researchers at the Agency for Healthcare Research and

Quality (AHRQ) and the Health Care Financing

Administration estimate that adjustments for differences

in the scope of included expenditures and population

reduce the NHA’s national estimate to $606 billion

(versus the corresponding MEPS national estimate of

$554 billion). For the most part, the remaining

difference is likely to reflect some combination of 

(a) irreconcilable definition and measurement

differences between NHA and MEPS and (b) statistical

uncertainty associated with sampling error (in both

MEPS and the NHA).

Expenses are grouped into six broad types of

service: hospital inpatient, ambulatory, prescribed

medicines, dental, home health, and other medical.

Ambulatory services include office-based care as well

as visits to hospital outpatient departments and

emergency rooms. The “other medical” category

includes glasses, ambulance services, orthopedic items,

hearing devices, prostheses, bathroom aids, medical

equipment, disposable supplies, and other

miscellaneous items or services.

Findings

In 1996, 86 percent of the U.S. community

population had some medical expenses (Figure 1).

Nearly three-quarters had ambulatory care expenses,

and nearly two-thirds had expenses for prescribed

medicines. Overall, about 4 in 10 people had medical

expenses for dental care and about 2 in 10 had expenses

for other medical services. Only 7 percent had

expenses for inpatient hospital care and 2 percent for

home health services. 

The average total expense (including both out-ofpocket and third-party payments) among people with

any medical expenses in 1996 was about $2,400 (Figure

2). However, half of all people with medical expenses

had expenses of less than $559 (the median value).

This large discrepancy between the average and median

values occurs because a small proportion of people

incurred a disproportionately large share of medical

expenses. Median expenses were substantially smaller

than average expenses across all categories of type of

service. 

Only small proportions of the population had

expenses for inpatient hospital and home health

services, but these health services had the highest

average annual expenses–$11,492 and $5,191,

respectively (Figure 2). The average expenses for

ambulatory services were $920. Although average

expenses for ambulatory services were substantially

lower than expenses for inpatient hospital or home

health services, they were more than twice as high as

for the remaining service categories (dental,

prescription medicines, and other medical services). 

About MEPS

MEPS collects nationally representative data on

health care use, expenses, sources of payment, and

insurance coverage for the U.S. civilian

noninstitutionalized population. It is co-sponsored by

AHRQ and the National Center for Health Statistics

(NCHS). This Highlights summarizes data concerning

health care expenses in the United States during 1996,

as derived from the MEPS Household Component,

Rounds 1-3. For more information about MEPS, see the

sources listed on the back page.

TWO
0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$559

6.8

Total Inpatient Ambulatory Prescribed

medicines

Dental Home

health

Other

medical

$2,398

$5,330

$11,492

$274

$920

$107 $406 $136 $384

$1,540

$5,191

$158 $286

Median

Average

THREE

0

10

20

30

40

50

60

70

80

90

100

85.9

6.8

73.2

65.2

41.8

2.4

19.9

Any type of

expense

Inpatient Ambulatory Prescribed

medicines

Dental Home

health

Other

medical

Most people had

expenses for

ambulatory care

and prescribed

medicines, while

relatively few had

expenses for

inpatient hospital

stays or home

health care.

Figure 1. Percent of population with health expense,

by type of service: 1996

Although only small

proportions of

people had

expenses for

hospital inpatient

and home health

services, average

and median

expenses were by

far the highest for

those types of

services.

Figure 2. Median and average expense per person with expense,

by type of service: 1996

DATA SOURCE:

1996 Medical

Expenditure Panel

Survey Household

Component.
U.S. Department of Health and Human Services

Public Health Service

Agency for Healthcare Research and Quality

2101 East Jefferson Street, Suite 501

Rockville, MD 20852

BULK RATE

POSTAGE & FEES PAID

PHS/AHRQ

Permit No. G-282

Medical Expenditure Panel Survey 

Per Capita Health Care 

Expenses, 1996

AHRQ Pub. No. 00-0026

May 2000

For more information about MEPS, call the

MEPS information coordinator at AHRQ (301-

594-1406) or visit the MEPS Web site at:

http://www.meps.ahrq.gov/

For a detailed description of the MEPS

survey design, sample design, and methods used

to minimize sources of nonsampling error, see

the following publications:

Cohen J. Design and methods of the

Medical Expenditure Panel Survey Household

Component. Rockville (MD): Agency for Health

Care Policy and Research; 1997. MEPS

Methodology Report No. 1. AHCPR Pub. No.

97-0026. 

Cohen S. Sample design of the 1996

Medical Expenditure Panel Survey Household

Component. Rockville (MD): Agency for Health

Care Policy and Research; 1997. MEPS

Methodology Report No. 2. AHCPR Pub. No.

97-0027.

Machlin S, Taylor A. Design, methods, and

field results of the 1996 Medical Expenditure

Panel Survey Medical Provider Component.

Rockville (MD): Agency for Healthcare

Research and Quality; 2000. MEPS

Methodology Report No. 9. AHRQ Pub. No. 00-

0028.

The estimates in this Highlights are based

on the MEPS Expenditure File (HC-011), which

is available on the MEPS Web site. More

detailed information on national medical

expenses will be published in:

Cohen JW, Machlin SR, Zuvekas SH, et al.

Health care expenses in the United States, 1996.

MEPS Research Findings. Forthcoming. 

MEPS publications are available from the

AHRQ Clearinghouse (800-358-9295) and on

the MEPS Web site.

http://www.ahrq.gov/ Look for the MEPS Web site at: