The Centers for Medicare & Medicaid Services' National Health Expenditure Accounts (NHEA) are the official estimates of total healthcare spending in the United States. Dating back to 1960, the NHEA measure annual aggregate U.S. spending for healthcare goods and services, public health activities, program administration, the net cost of private insurance, and research and other investment related to healthcare.
|Data are sourced from the Services Annual Survey (SAS) and the Economic Census, both produced by the U.S. Census Bureau.|
|Collection Unit||Businesses. A business is defined as being an establishment or firm. An establishment is a single physical location where business is conducted, or where services are performed. A firm is a business organization or entity consisting of one or more domestic establishment locations under common ownership or control. In the NHEA, health care spending is classified by type of establishment. Classification systems provided by the federal government are used to catalog the economic activity of these establishments. Goods are classified according to the product codes used by the U.S. Census Bureau. Services are classified by the 2017 North American Industry Classification System (NAICS), and include sector 62, Health Care and Social Assistance, and any government operations that parallel that sector.|
|SAS is a survey of approximately 78,000 selected service businesses with paid employees; supplemented by administrative records data or imputed values to account for non-employer and certain other businesses. Data collection begins in January following the survey year and continues for about 28 weeks. Reported data are for activities which take place during the calendar year. Every five years, the Economic Census collects extensive statistics about businesses that are essential to understanding the American economy. Nearly 4 million business locations, large, medium, and small, covering most industries and all geographic areas of the United States will receive surveys tailored to their primary business activity. The NHEA covers the resident population, which includes all persons, both military and civilian, living in the United States.|
Notable Sample Exclusions
|NHEA data exclude home health care; nursing home care; employee and self-employment contributions and voluntary premiums paid for Medicare Part A; the medical portion of property and casualty insurance; and other health, residential, and personal care expenditures. For the NHEA, the type of establishment providing the service generally determines what is included in a spending category. For example, the NHEA places inpatient hospitalization and other medical services (outpatient hospital care, emergency room services, etc.) in its hospital care category.|
|https://www.cms.gov/files/document/definitions-sources-and-methods.pdf https://www.census.gov/programs-surveys/sas/about.html https://www.census.gov/programs-surveys/economic-census/about.html|
As seen in Chart 1 below, the CE estimates of aggregate annual expenditures of total health care, private health insurance, Medicare Supplementary Insurance Trust Fund, prescription drugs, dental services, and other professional services have historically compared well, with estimates ranging from 65 to 124 percent of those from NHEA. Deviations between the two products are directly attributed to coverage, definitional, and measurement differences. Specifically, differences in estimates from CE and NHEA could partially be the result of the differing sample pools. The CE obtains information from individual consumer units, while the NHEA uses information from U.S. businesses from the SAS and the Economic Census. Beyond that, time period differences between the two surveys, as well as adjustments for population, could also further explain that gap between estimates. The CE and the NHEA differ in the populations they cover. The CE is designed to represent the U.S. civilian noninstitutionalized population and excludes those living in institutions, such as a nursing homes or prisons, and active-duty members of the U.S. Armed Forces living on base. The NHEA covers the larger resident population, which includes all persons, both military and civilian, living in the United States.
Healthcare spending has continued to increase in dollar amount and as a share of household expenditures, regardless of whether the economy is expanding or contracting. The only exceptions were from 2014 to 2015 and from 2017 to 2018 when average household healthcare spending increased, but shares of household healthcare spending decreased. (See chart 2.) For this reason, an understanding of the data sets that measure healthcare spending is crucial.
Chart 1 shows CE estimates of aggregate expenditures for healthcare and CE-NHEA healthcare spending ratios. In 2019, CE aggregate medical care expenditures were $678.6 billion or 86 percent of the NHEA estimate of $791.9 billion.
CE healthcare data represent household payments (after reimbursement) made directly to hospitals and other providers of care, and to insurance companies, for private group and individual health insurance coverage. Payments to the Federal government for Medicare Part B and Part D coverage are also included. Like the CE, NHEA household healthcare spending includes direct payments (net of any reimbursement) to providers and to third-party insurers.
The CE data used in this research are unpublished integrated data showing the most detailed (least aggregated) breakdowns available. The NHEA data were obtained from the Centers for Medicare & Medicaid Services, Downloads, "NHE Tables," https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalHealthAccountsHistorical.html
Last Modified Date: October 19, 2021