LP Data Insight: Medicare Spend by Service Type and Beneficiary Age

Using CMS Limited Data Set (LDS) 2013 claims data, I examined the distribution of all Medicare fee-for-service (FFS) costs. The LDS claims file consist of 100% of all FFS claims for inpatient, outpatient, home health, skilled nursing facilities (SNF), and hospice. However, they include only a 5% sample for claims related to durable medical equipment (DME) and carrier. The carrier file (also referred to as the Physician/Supplier Part B claims file) consists of final FFS claims.1 Due to the 5% sample limitation for these files, I replicated the sample contained in both the DME and carrier file across all other claims files, creating an overall 5% claims file. An important limitation of the claims files are the lack of Medicare parts C and D claims (i.e., Medicare Advantage and pharmacy). Consequently, all calculated costs represent a 5% sample (roughly 1.7 million beneficiaries), and only include parts A and B claims.

For the current visualizations, I calculated the total costs across all types of claims, as well as total costs within each type of claim, at the patient level. This allowed me to examine the distribution of costs in various ways.

Figure 1 displays the distribution of total Medicare spend at each age for Medicare beneficiaries age 65 or older. Through this visualization we can see the changing distribution of spend in beneficiaries at different ages. Not surprisingly, as the population ages, the proportion of spend for institutionalized care (SNF and hospice care) increases significantly, while spend on non-institutionalized care (outpatient and carrier) decrease significantly.

Figure 1. Distribution of Medicare Spend Among Beneficiaries 65 and Older, by Type of Service

Figure 1 Distribution of Medicare Spend Among Beneficiaries 65 and Older, by Type of Service

Figure 2 represents the total Medicare spend by type of service and overall, apportioned to the percent spend at each age, for beneficiaries age 65 or older. This visualization shows the proportion of all dollars spent for each type of service among all beneficiaries at various ages. For outpatient, inpatient, carrier, DME claims, and total claims there is a gradual decrease in the proportion of spend among older beneficiary populations. Contrarily, there is a marked increase in spend among older beneficiaries for SNF, hospice, and home health care, with an abrupt decrease again among the oldest beneficiaries.

Figure 2. Distribution of Medicare Spend Across Each Type of Service, by Beneficiary Age

Figure 2 Distribution of Medicare Spend Across Each Type of Service, by Beneficiary Age

Figure 3 visualizes the distribution of Medicare beneficiaries, all health care claims, and spend overall by type of service and among categorized age groups. This allows for the comparison of the proportion of health care spend and claims relative to the proportion of the Medicare population within each group. Overall, different age groups account for significantly diferent proportions of claims and spend, with the most striking difference seen in the proportion of hospice spend among the oldest Medicare beneficiaries (> 85).

Figure 3. Proportions of Medicare Beneficiaries, Total Claims, and Spend Among Age-Categorized Medicare Beneficiaries

FFigure 3 Proportions of Medicare Beneficiaries, Total Claims, and Spend Among Age-Categorized Medicare Beneficiaries

Each of these figures highlight the expertise of Leavitt Partners in data visualization and analytics, and offer a glimpse into the robust possibilities for research and analysis using Medicare claims data.