Some statistical
tests pertaining to health expenditures in 2013 and 2014
Question: Consider the population of people with 12
months of private insurance coverage in 2013 and 12 months of private coverage
in 2014. What happened to the mean and
median in percapita outofpocket health expenditures for fully insured people
after the opening of state exchanges?
Note: The purpose here is to examine how the ACA
may have impacted expenditures for people with private health insurance. Hence, everyone in both samples has coverage
for all 12 months.
Data and Methodology: The data used in this study was obtained from
the 2013 and 2014 MEPS surveys. The
variables examined were TOTEXP14, TOTEXP13, TOTSLF14, and TOTSLF13.
The tests presented here are the standard classical ttest
on the difference between two means, the nonparametric test of differences in
medians and the Wilcoxon rank sum test.
The test on medians works by calculating a common median for
the variables in the two years and looking at the percent above and below the
common median.
The RANKSUM test combines the two years and compares the sum
of the ranks for each year to the expected sum of the ranks for each year.
STATA was used to calculate the test statistics. Here is an informative link to information on
using STATA for median and RANKSUM comparisons.
The statistical tests presented here do NOT employ survey
weights.
Results of
Statistical Tests:
Comparison of Means for
total outofpocket expenses
and total health expenses


TOTSLF

TOTEXP


2013

633.7

4068.857

2014

589.8

4330.368

Diff.

43.9

261.5

% Diff.

6.9%

6.4%

TwoTailed pvalue for
classical ttest

0.0302

0.0935

Comparison of Medians for
total outofpocket expenses
and total health expenses


TOTSLF

TOTEXP


2013

186

972

2014

170.5

951

Diff.

15.5

21

% Diff.

8.3%

2.2%

pvalue for Test on
Equality of Medians

0.006

0.419

pvalue for rank sum test

0.0007

0.4814

Discussion of Statistical Tests:
The percapita mean outofpocket expenditure went down by
6.9%. This change is significant at the
0.05 level.
The mean total health expenditures went up 2.2%. This change is significant at the 0.10
level.
The tests reveal a 8.3% decrease in median outofpocket
expenses. The difference in median
outofpocket expenses is highly significant.
The change in percapita median outofpocket expenditures
is not significant.
Comments on Results:
It appears as though the ACA had a small impact on reducing outofpocket health expenses even though total percapita health expenditures grew and innovations like higher deductible health plans continue to grow in popularity.
The sample sizes used for these tests are around 14,000
fully insured people per year. This is
not large enough for me to be really confident of results because extremely
expensive cases have a disproportionate impact on both total and outofpocket
health expenditures. A general survey
of the entire population does not allow us to understand what is happening
among really expensive health care cases.
The only way to get a handle on the expensive cases is through a
separate sample of really expensive cases.
The more precise information about expensive cases would then be
combined with results from the general survey in order to get a more accurate
estimate of average expenditures.
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