Other Issues: Source of Payment Data

Throughout the course of the day, a range of other topics was covered. One of these is data needs—especially those related to expenditure accounting and to price index development. Those working on these topics have, because of their complexity, discovered the need to draw from a broad array of data sources—aggregate and micro, longitudinal and cross-sectional, survey and administrative, public and private. Notes on data issues appear throughout this report, particularly in Sections 2.4. and 3.6.

Source of payment data is another important accounting topic raised by Jorgenson. The national accounts view GDP as an aggregate measure of economic activity that involves multiple sectors. In the case of medical care, households supply the patients; the business sector includes the providers of medical care; government plays an important role as a payer of a large portion of this medical care or, in some cases, by functioning as an insurer. Jorgenson, along with participants from CMS, noted the importance of keeping track of payments for medical care by the various sources.

As noted above, the national health expenditure accounts compiled by CMS are organized by sources of payment—the part paid for by the government, the part paid for by private insurance, the part paid out-of-pocket by the household sector, and so forth. Because the national accounts are used to monitor the government budget, they have to be able to indicate precisely the level of public expenditures used to purchase or pay in part for medical services. For private sources of payment, even though they constitute a relatively small portion of total payments, it is also important to distinguish between the parts made by individuals and by businesses. Here, the concern is not with the business of providing medical service, but the role of businesses as buyers of health insurance; the data must allow users to distinguish the health insurance industry and its activities from those of the medical care sector itself.

When thinking about payments for treatments generated by providers, Jorgenson noted that those have to be segregated, as they are in the national health expenditure accounts, by sources of payment, so that links can be made to the other sectors in the economy. These accounts support a key function, which is to document the flow of payments among households, industry, and government budgets. In developing satellite accounts, it is important not to lose sight of the tremendous heterogeneity that characterizes medical care and how that is reflected in part in the sources of payment data.

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