Tracking health care costs: 13% of patient medical expenses are out-of-pocket

In 2015, $1 of every $8 spent on health care by US civilian, noninstitutionalized, nonelderly citizens was out-of-pocket, according to results from the Medical Expenditure Panel Survey Household Component (MEPS-HC), the only nationally representative data for estimating health-care expenses at the family level.

MEPS-HC data—which include approximately 97.2 million nonelderly families—were used to estimate the amount that members paid out-of-pocket for medical care received in 2015. The data focus on payment levels according to family income and structure.

The overall median out-of-pocket expenses for health care by nonelderly families in the United States was $451, but these increased significantly with increasing income. Approximately 14% of families had out-of-pocket expenses exceeding $2,500, but the proportion varied greatly by income levels, from 4% for poor families to 22% of high-income families.

Families with two or more adults had significantly higher out-of-pocket expenses than those with only one adult, whether or not children were present.

Family income levels significantly affect how much was paid out-of-pocket

Researchers defined poor as a family income of less than 125% of the federal poverty level; low income as between 125% and < 200% of the federal poverty level; middle income as between 200% and 400%; and high income as > 400%.

Median family out-of-pocket expenses increased substantially with family income and ranged from $86 among poor families to $868 among high-income families. A full 52% of poor families had out-of-pocket expenses of less than $100, with the proportion decreasing with income to only 11% of high-income families.

Among high-income families, 22% had out-of-pocket expenses exceeding $2,5000, compared with significantly smaller proportions of families with lower incomes. Only about 4% of poor families and 10% of low income families had out-of-pocket expenses greater than $2,500.

Out-of-pocket expenses also affected by family structure

The authors sorted and analyzed data according to four family category structures:

1. Single adult aged 18 years or older with no children aged 17 years or younger
2. Single adult with children
3. Two or more adults with no children
4. Two or more adults with children

Data showed that the median out-of-pocket expense was more than $600 higher for families with two or more adult members compared with those with only one adult, regardless of having children or not. The differential was $869 vs $242 for families without children and $721 vs $116 for families with children.

About 19% of families with children, and 21% of those without children had out-of-pocket expenses exceeding $2,500 if they were comprised of two or more adults. Only 8% of families with one adult and no children, and 6% of families with one adult and children had out-of-pocket expenses of more than $2,500.

Impact on clinicians and patient care

Such out-of-pocket patient costs can greatly impact patient care. According to a 2017 national patient survey commissioned by The Physicians Foundation, costs are a growing concern for patients, with a full 89% of consumers fearing that future increases in health care costs will adversely impact them.

For example, one-fourth of survey respondents reported not filling a prescription because of cost, and 19% reported that they had skipped doses of their medications for the same reason. Further, 57% of health care consumers feel they are “one sickness away from serious financial trouble,” while 75% are concerned with their ability to pay for medical treatments due to sickness or injury. According to The Physicians Foundation, this is a significant increase from the numbers from its first survey, done in 2016, in which 62% of consumers had such concerns.

In addition, 90% of respondents reported that they feel it is incumbent on physicians and hospitals to consider whether underlying issues may be interfering with patients’ health outcomes.

“The findings gleaned from this second edition of the patient survey are meant to help physicians and patients identify areas for change and improvement,” said Gary Price, MD, clinical assistant professor of surgery, Yale-New Haven Hospital, New Haven, CT, and board member, The Physicians Foundation.