Agency for Healthcare 

Medical Expenditure Panel Survey Research and Quality 

STATISTICAL BRIEF #33 

June 2004 

Outpatient Prescribed Medicines: 

A Comparison of Use and Expenditures, 

1987 and 2001

Mamatha Pancholi and Marie Stagnitti 

Introduction 

An examination of trends in outpatient prescribed medicine use and 

expenditures is an essential component of studies that explore 

recent increases in health care spending. This Statistical Brief 

summarizes data that indicate a significant growth between 1987 

and 2001 in the use (i.e., number of purchases) and expenditures for 

outpatient prescribed medicines in the U.S. civilian 

noninstitutionalized population. 

The data used to estimate the proportion of the population that 

purchased a prescribed medicine and the expense associated with 

that purchase are derived from the 1987 National Medical 

Expenditure Survey (NMES) and the 2001 Medical Expenditure 

Panel Survey-Household Component (MEPS-HC). The estimates 

from the 1987 NMES were adjusted for inflation using data from the 

1987 and 2001 Consumer Price Index for All Urban Consumers 

(CPI-U). All significance tests were done using the adjusted 1987 

estimates and the 2001 estimates, and results discussed are 

statistically significant at the 0.05 level. Over-the-counter medicines 

and free samples are not included in outpatient prescribed medicine 

expenditures. 

Findings 

In 1987, approximately 57 percent of the 239.4 million persons in the 

U.S. civilian noninstitutionalized population purchased 1.2 billion 

prescribed medicines at a total expenditure of $34.7 billion (in 2001 

dollars), while in 2001 approximately 65 percent of 284.2 million 

persons purchased close to 2.5 billion prescribed medicines for 

$134.1 billion. For those with a prescribed medicine expense, 

average total expenditures for prescribed medicines rose 

significantly from 1987 to 2001, from $253 in 1987 (in 2001 dollars) 

to $730 in 2001. Total out-of-pocket expenditures also dramatically 

increased from 1987 to 2001, from $19.7 billion (in 2001 dollars) to 

$59 billion. This trend remained consistent when comparing average 

total out-of-pocket expenditures for prescribed medicines for those 

with a prescribed medicine expense, going from $144 in 1987 (in 

2001 dollars) to $321 in 2001 (figures 1 and 2). 

Highlights 

� In 1987, approximately 57 

percent of the U.S. civilian 

noninstitutionalized population purchased 1.2 billion 

prescribed medicines at a 

total expenditure of $34.7 

billion (in 2001 dollars); in 

2001, approximately 65 

percent of the population 

purchased almost 2.5 billion 

prescribed medicines at a 

total expenditure of $134.1 

billion. 

� For those with a prescribed 

medicine purchase, the 

average total expenditures 

for prescribed medicines 

increased from approximately $253 in 1987 (in 

2001 dollars) to $730 in 

2001. 

� The total amount paid out 

of pocket towards the 

purchase of prescribed 

medicines increased from 

approximately $19.7 billion 

in 1987 (in 2001 dollars) to 

$59 billion in 2001. 

� For those with a prescribed 

medicine purchase, the 

average total amount paid 

out of pocket for prescribed 

medicines more than 

doubled from 1987 to 2001 

(from approximately $144 in 

1987 (in 2001 dollars) to 

$321 in 2001). 
The use of and expenditures for prescribed medicines varied by age and race/ethnicity in 1987 as well as 

in 2001: 

For persons under the age of 65 who reported a prescribed medicine expense, the average number of 

prescribed medicines purchased increased from 6.9 in 1987 to 10.8 in 2001. For persons 65 and over 

who reported a prescribed medicine expense, the average number of prescribed medicines purchased 

increased from 18.4 in 1987 to 26.5 in 2001. 

The average number of prescribed medicines for blacks who reported purchasing a prescribed medicine 

increased from 9.1 in 1987 to 12.8 in 2001; for Hispanics the average number of prescribed medicine 

purchases rose from 6.2 in 1987 to 9.0 in 2001; and for whites and others the average number of 

prescribed medicine purchases increased from 9.0 in 1987 to 14.3 in 2001. 

For persons under the age of 65 who had a prescribed medicine expense, the average total expenditure 

for prescribed medicine increased from $200 in 1987 (in 2001 dollars) to $592 in 2001. Similarly, persons 

over the age of 65 with a prescribed medicine expense also saw a dramatic increase in their total 

prescribed medicine expense, $517 in 1987 (in 2001 dollars) to $1,377 in 2001. 

The average total expenditure for prescribed medicine for blacks with a prescribed medicine expense 

increased from $234 in 1987 (in 2001 dollars) to $632 in 2001; the average expenditure for whites and 

others increased from $260 in 1987 (in 2001 dollars) to $778 in 2001; and the average expenditure for 

Hispanics increased from in $192 in 1987 (in 2001 dollars) to $459 in 2001. 

Out-of-pocket spending for prescribed medicines more than doubled between 1987 and 2001. Persons 

under the age of 65 who had a prescribed medicine expense spent an average of $106 in 1987 (in 2001 

dollars) as compared to $227 in 2001. Similarly, persons 65 and over with a prescribed medicine expense 

saw a dramatic increase in their out-of-pocket spending on prescribed medicine, going from $330 in 1987 

(in 2001 dollars) to $765 in 2001 (figure 3). Average total out-of-pocket expenditures for prescribed 

medicine for blacks (with a prescribed medicine expense) increased from $117 in 1987 (in 2001 dollars) 

to $269 in 2001; from $150 in 1987 (in 2001 dollars) to $344 in 2001 for whites and others; and from $104 

in 1987 (in 2001 dollars) to $194 in 2001 for Hispanics (figure 4). 

Definitions 

The 1987 NMES collected information on expenditures in terms of total charges while MEPS-HC 

measures this information in terms of total expense. NMES defined total charge as the amount charged 

for the medical service provided. MEPS-HC defines total expense as the sum of payments for prescribed 

medicine, including out-of-pocket payments and payments made by private insurance, Medicaid, 

Medicare, and other sources. No attempt was made to account for this change in measurement. Both 

NMES and MEPS-HC define out-of-pocket payments as payments made by self or family. 

About MEPS-HC 

The Medical Expenditure Panel Survey (MEPS) is the third in a series of nationally representative surveys 

of medical care use and expenditures. MEPS is cosponsored by the Agency for Healthcare Research and 

Quality and the National Center for Health Statistics. MEPS collects nationally representative data on 

health care use, expenditures, sources of payment, and insurance coverage for the U.S. civilian 

noninstitutionalized population. The first survey, the National Medical Care Expenditure Survey (NMCES) 

was conducted in 1977; and the second survey, the National Medical Expenditure Survey (NMES), was 

carried out in 1987. 

NMES and MEPS data are released to the public in public use data files. NMES data files are available 

from the AHRQ Publications Clearinghouse (E-mail: ahrqpubs@ahrq.gov). MEPS data files are available 

on the MEPS Web site (www.meps.ahrq.gov/). 

References 

For a detailed description of the MEPS-HC survey design, sample design, and methods used to minimize 

sources on nonsampling error, see the following publications: 
Cohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 1. AHCPR Pub. No. 97-0026. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

Cohen, S. Sample Design of the 1996 Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 2. AHCPR Pub. No. 97-0027. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

These publications are available on the MEPS Web site: http://www.meps.ahrq.gov/. 

For more information on the NMES survey design, see the following publications: 

Cohen, S., R. DiGaetano, and J. Waksberg. Sample design of the 1987 Household Survey. AHCPR Pub. 

No. 91-0037. National Medical Expenditure Survey Methods 3. Agency for Healthcare Policy and 

Research. Rockville, Md.: U.S. Department of Health and Human Services, Public Health Service, 1991. 

Edwards, W. and M. Berlin. Questionnaires and data collection methods for the household survey and the 

survey of American Indians and Alaskan Natives. DHHS Pub. No. (PHS) 89-3450. National Medical 

Expenditure Survey Methods 2. National Center for Health Services Research and Health Care 

Technology Assessment. Rockville, Md.: U.S. Department of Health and Human Services, Public Health 

Service, 1989. 

Suggested Citation 

Pancholi, M. and Stagnitti, M. Outpatient Prescribed Medicines: A Comparison of Use and Expenditures, 

1987 and 2001. Statistical Brief #33. June 2004. Agency for Healthcare Research and Quality, Rockville, 

MD.http://meps.ahrq.gov/mepsweb/data_files/publications/st33/stat33.pdf
for U.S. civilian noninstitutionalized population, 1987 and 2001 

19.7 

59.0 

34.7 

134.1 

0 

50 

100 

150 

Total expenditures Total out-of-pocket expenditures 

Dollars (billions) 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the 2001 Medical Expenditure Panel Survey–Household Component. 

Figure 1. Total and out-of-pocket expenditures for prescribed medicines 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 

253 

321 

144 

730 

0 

200 

400 

600 

800 

Average total expenditures Average out-of-pocket expenditures 

Dollars 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the 2001 Medical Expenditure Panel Survey–Household Component. 

Figure 2. Average total and out-of-pocket expenditures for prescribed 

medicines for those with a prescribed medicine purchase, 1987 and 2001 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 
765 

330 

106 

227 

0 

200 

400 

600 

800 

Under 65 65 and over 

Dollars 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the 2001 Medical Expenditure Panel Survey–Household Component. 

Figure 3. Average total out-of-pocket expenditures for prescribed medicines 

for those with a prescribed medicine purchase, by age, 1987 and 2001 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 

194 

344 

150

117 104 

269 

0 

100 

200 

300 

400 

Blacks Whites/Other 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the 2001 Medical Expenditure Panel Survey–Household Component. 

Figure 4. Average total out-of-pocket expenditures for prescribed medicines for 

those with a prescribed medicine purchase, by race/ethnicity, 1987 and 2001 

Hispanics 

Dollars 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001