Correcting for the 2007 MEPS Discontinuity in Medical Condition Spending and Treated Prevalence

Under a contract with the Bureau of Economic Analysis (BEA), Altarum has updated estimates of spending by medical condition that were first published in 2009 and that covered the years 1996 through 2005. In this update, data from the Medical Expenditure Panel Survey (MEPS) were used to allocate the civilian non-institutional population portion of spending to medical conditions. The update involved producing estimates for 1996 through 2013 and was complicated by a change in the MEPS survey methodology in 2007 that resulted in a discontinuity in the medical condition spending and prevalence responses.1 In order to produce a consistent time series of spending by medical condition, it was necessary to develop adjustments for the spending discontinuity. Our methodology involved adjusting for the treated prevalence discontinuity as well. The adjustments were designed to approximate what treated prevalence and spending would have been in the 1996 through 2007 period if the new survey method had been used in those years (the new method was introduced in 2007 but only to half of those sampled that year).