a second survey, the Medical Expenditure Panel Survey (MEPS), which is designed and sponsored by the Agency for Healthcare Research and Quality (AHRQ)—also in HHS—should serve as the source of data for modeling medical care risk, with the results of that modeling to be translated to the CPS ASEC through variables that are common to the two surveys.

MEPS could in fact stand alone as home to the MCRI. Unlike the CPS ASEC, MEPS collects essentially all of the variables that are likely to be needed to construct the MCRI. Although the study panel can recommend a different approach using different data, the argument that the MCRI should be measured from the same data as the SPM is compelling—at least until the two measures are firmly established and their relationships to each other are thoroughly understood. Users will want to know how the two measures compare and how they differ for the same family or individual.

Implications of Alternative Design Options

Two fundamental decisions regarding the design of an MCRI have important implications for its data requirements. The first is whether medical care risk is to be defined retrospectively or prospectively. With a retrospective definition, the principal data need is for out-of-pocket expenditures for medical care during a specified accounting period. For segments of the population that may have forgone care because of limited insurance coverage and an inability to pay for care out-of-pocket, actual expenditures are a poor measure of medical care risk and must be supplemented with other measures. For most of the population, however, actual expenditures may be sufficient to measure risk as a retrospective measure. With a prospective measure, which the 1995 NRC panel recommended, actual expenditures in the recent past, though not unimportant, become less important than measures of current health status on the one hand and the limits of insurance coverage on the other—both of which relate to the likelihood of incurring medical expenditures in excess of what an individual or family can afford to pay. In assessing data availability, I consider all of these characteristics.

The second decision is whether family resources will include only income or also assets. Doyle (1997), in a thoughtful discussion of issues related to defining and constructing an MCRI 2 years after the release of the 1995 NRC report, assumed that some component of assets would be included in the resources measure. She also considered ready access to loans as an alternative resource for covering unexpected medical costs, although she noted that access to such loans was generally restricted to families with significant assets as collateral. The inclusion of assets has important implications for the measurement of medical care risk among the elderly, whose income flows are diminished by retirement but who have had an entire



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