Rates and correlates of expenditure increases for personal health services: pre- and post-medicare and medicaid

This investigation of the increases in expenditures for medical care of the noninstitutionalized population of the United States in two recent periods suggests the following: Price increases contributed substantially more to overall expenditure increases in both periods than did use increases. Hospital price increases contributed most to overall price increases in both periods. Drug use in the first period and hospital use in the second period contributed most to overall use increases. The so-called "free services" made a substantial contribution to increases in use between 1963 and 1970, while apparently making no contribution in the earlier period. In the pre-Medicare/Medicaid period, use increase were greatest among the working-age and male population. However, increases in use also seemed to be relatively high among the low-income group. In the most recent period, use increases shifted not only to the elderly and the very young, but also to the group 55-64. The relatively high rate of use increase for males and the low-income group continued. These findings, then, suggest that institution of the Medicare and Medicaid programs was accompanied by acceleration of some trends that were already taking place, i.e., relatively high rates of increase in the use of health services for the low-income population and the aged. Some groups not considered to be target populations for the programs, such as those 35-54, showed a reduction in their use rates; others those 55-64, increased their use. Finally, the non-white population showed no greater rate of increase in use of health services than the white population, even though the former would presumably be considered a target group.