National Health Expenditure Accounts
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.
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.
Methodology and Concordance:
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