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North Carolina
Multi-Payer Analysis
Annual Per-Person Health Care Spending

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A Multi-Payer Analysis of Health Care Spending in North Carolina

Research by:
HCCI Duke Blue Cross Blue Shield North Carolina
With generous support from:
Arnold Ventures Commonwealth Fund

In 2018, the US spent $3.6 trillion on health care. That's a lot of money. But where this money goes and variation in spending is not well understood.

An important starting point in understanding health care spending is exploring data across different populations, geographic areas, and types of services. This, in turn, can motivate further explorations about why spending varies as it does. This project presents an interactive data overview and introduction, as well as a detailed dashboard to explore and many downloadable data resources.

This project is a collaboration between researchers at Duke University, the Health Care Cost Institute (HCCI), and Blue Cross and Blue Shield of North Carolina. HCCI is an independent, non-profit research institute that maintains a comprehensive database of Employer-Sponsored Insurance and Medicare Advantage claims covering 50 million people annually across the U.S., and 100% of Medicare Fee-For-Service claims as a national Medicare Qualified Entity. This project aims to organize health data to enable policymakers, journalists, and the public to explore and understand some of the most important factors influencing health care spending. We focus on total spending in recent years within one large state – North Carolina.

We combine health care spending data for North Carolina residents in 2016 and 2017 in all of the state's 100 counties. The most unique (and challenging) aspect of the project is the combination of health care spending across several distinct sources of health care insurance coverage with data held by different institutions. This includes the federal Medicare program, those who receive insurance coverage through jobs (i.e., Employer-Sponsored Insurance, or ESI) as well as people covered by the North Carolina Medicaid program, which serves over 2 million people including low-income adults, children, pregnant women and women receiving postpartum care, refugees, and people with disabilities.

We calculated total health care spending as the sum of payments from the source of coverage plus any out-of-pocket deductible, copayment or cost-sharing amounts (excluding premium payments) by individuals.

We combined data for two years – 2016 and 2017 – and compared the share of spending across types of health care services. We then looked at the average annual spending amounts per person. Per-person spending was adjusted within each population to account for differences in age and gender across the state. All amounts are inflated to and reported as 2017 U.S. dollars.

Across all sources of coverage, we found that health care spending varied across the state, depending on the population, age group, and county.

For example, this project shows the counties where per-person spending was highest.

And the counties where spending was lowest.

By illustrating differences in health care spending across counties, populations, age groups, and service categories, we aim to contribute to a better understanding of the basic characteristics of health care spending in North Carolina.

Our population includes data on 6.3 million people annually

To begin understanding health care spending in North Carolina, we’ll start by breaking down the study sample to get a sense of who the data represent across the state. Our study population consisted of approximately 6.3 million people annually out of the state’s population of approximately 10.2 million. The 4 million people not included in this analysis are those who are uninsured, those insured through the individual market, those enrolled in Employer-Sponsored Insurance (ESI) plans administered by other issuers, and those enrolled in Tricare or receiving care delivered through the Veterans Administration. Since our study period spanned 2016 and 2017, we analyzed data from our study population over the two-year period.

Four populations make up our study, characterized by the “payer” of insurance claims — Medicare Fee-For-Service (FFS), Medicare Advantage, Employer-Sponsored Insurance (ESI), and North Carolina Medicaid .

Employer-Sponsored Insurance accounted for the most people in the study, representing 43.1% of the study population.Medicaid accounted for 30.2%, followed by Medicare Fee-For-Service, accounting for 18.4%. Finally, Medicare Advantage accounted for 8.4% of the study population.

The Medicare Fee-For-Service population includes those enrolled in the traditional federal Medicare program, including those 65 or older, those under 65 with certain disabilities, and those with end-stage renal disease.

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The Medicare Advantage population includes those eligible for Medicare Fee-For-Service who choose to enroll in a private health insurance plan overseen by the federal Medicare program.

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The Employer-Sponsored Insurance population includes employees and family members who receive health insurance coverage through their employer.

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The North Carolina Medicaid population includes those eligible and enrolled in the state-administered Medicaid program. This includes low-income adults, children, pregnant women and women receiving postpartum care, refugees, and people with disabilities.

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We report data on health care spending overall and by age groups and gender. The age groups include children (0-17 years old), non-elderly adults (18-64 years old), and elderly adults (65+ years old). For the Employer-Sponsored Insurance population, elderly adults were excluded. The Medicare Fee-For-Service and Medicare Advantage populations in the sample included no children.

All four populations had a slightly higher proportion of females than males. For example, Medicaid had the largest gender difference, with 57.7% of its population being female. This is driven by eligibility criteria for NC Medicaid, which includes coverage for low-income women during pregnancy and 60 days postpartum.

The populations also varied by their age group composition. Over 58% of the Medicaid population were children, compared to under 20% for Employer-Sponsored Insurance. Medicaid eligibility rules cover many children in low-income households, but does not include non-disabled childless adults and other populations. The Medicare Advantage population in this study skewed older than the Medicare Fee-For-Service population, with 85.5% of the Medicare Advantage population over 65 years old compared to 75.6% in the Medicare Fee-For-Service population. The difference is driven by younger people with disabilities enrolling more often in Medicare Fee-For-Service than Medicare Advantage.

Use the toggles to see how payer populations vary in their age group and gender composition.

Male
Female
Children
Non-Elderly
Elderly
Gender Breakdown
Age Breakdown

Total spending among the study population was almost $100 billion over the two-year study period

Now that we understand who makes up the study population, we can begin to explore health care spending. Total health care spending for our study population was almost fifty billion dollars per year, or almost one hundred billion dollars total ($97.6 billion). Each population contributed a slightly different share of spending to the total.

Spending by population

The Medicare Fee-For-Service and Employer-Sponsored Insurance populations had roughly the same share of the total spending, accounting for 34.1% and 32.7%, respectively. The Medicaid population accounted for 21.3% of the spending, with the Medicare Advantage population accounting for 11.9%.

Spending by service category

We also wanted to understand how the total spending was distributed among kinds and settings of health care services, or service categories.

We classified spending separately into four broad categories: Inpatient, Outpatient, Professional (Clinician) services, and Prescription drugs .

Breaking down the study population’s total spending by service categories, inpatient services accounted for 27.8% of total spending. Outpatient and professional services both accounted for 27.0%, while prescription drugs accounted for 18.2% of spending.

Inpatient applies to services provided to patients who stay at a health care facility (like a hospital or a nursing home) overnight for treatment. It does not include overnight stays for observation only.

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Outpatient applies to services provided to patients by health care facilities not requiring an overnight stay or hospitalization. For example, an emergency room (ER) visit, an outpatient surgery, or an observation-only stay.

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Professional applies services provided to patients by a health care professional, like at an office visit for preventive services or chronic disease monitoring.

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Prescription drug spending includes payments made for drugs dispensed by retail and mail-order pharmacies. It does not reflect manufacturer rebates.

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The average annual per-person spending in North Carolina was $8,176

Among our study population, the average annual per-person spending was $8,176 (“annual” means the average amount per year based on our two-year study period). We’ll now look at annual per-person spending across populations, demographics, and service categories to better understand spending in North Carolina.

Per-person spending varied across populations

The average annual per-person spending varied by population. Medicare Fee-For-Service had the highest average annual per-person spending at $15,670. This is over $10,000 more than the average annual per-person spending in Medicaid, which was $5,480. The Medicare Advantage average annual per-person spending was $11,199, below the Medicare Fee-For-Service average. The Employer-Sponsored Insurance average annual per-person spending was $6,361.

Per-person spending varied by age groups, even within populations

Average annual per-person spending varied by age groups within each population.

In both the Medicare Fee-For-Service and the Medicare Advantage populations, annual per-person spending for non-elderly adults was higher than for elderly adults. This is likely because non-elderly adults become eligible for Medicare due to disability and may utilize more health care services.

Average annual per-person spending varied by age groups within each population.

In both the Medicare Fee-For-Service and the Medicare Advantage populations, annual per-person spending for non-elderly adults was higher than for elderly adults. This is likely because non-elderly adults become eligible for Medicare due to disability and may utilize more health care services.

Average annual per-person spending varied by age groups within each population.

Among the Employer-Sponsored Insurance population, children had lower average per-person spending ($2,878) compared to non-elderly adults ($7,206).

Average annual per-person spending varied by age groups within each population.

Within the Medicaid population, the average per-person spending for elderly adults, who are more likely to be managing chronic diseases and/or in receipt of institutional long-term care services, was over $16,000 higher than the average per-person spending for children, who are generally healthy, equaling $19,075 and $2,467, respectively.

Use the toggles to see how per-person spending varied by demographic within each population.

Medicare Fee-for-Service
Medicare Advantage
Employer-Sponsored Insurance
Medicaid

Each population had a different proportion of per-person spending attributed to each service category

The composition of annual per-person spending by service category also varied by population.

Among the Medicare Fee-For-Service population, inpatient services accounted for 30.5%, outpatient services accounted for 22.4%, professional services accounted for 20.7%, and prescription drugs accounted for 26.4% of annual per-person spending.

The composition of annual per-person spending by service category also varied by population.

Among the Medicare Advantage population, inpatient services accounted for 26.9%, outpatient services accounted for 22.5%, professional services accounted for 23.9%, and prescription drugs accounted for 26.7% of annual per-person spending.

The composition of annual per-person spending by service category also varied by population.

Among the Employer-Sponsored Insurance population, inpatient services accounted for 18.1%, outpatient services accounted for 34.4%, professional services accounted for 28.1%, and prescription drugs accounted for 19.4% of annual per-person spending.

The composition of annual per-person spending by service category also varied by population.

Among the Medicaid population, inpatient services accounted for 32.1%, outpatient services accounted for 17.8%, professional services accounted for 30.3%, and prescription drugs accounted for 19.9% of annual per-person spending.

Use the toggles to see how per-person spending varies by service category within each population

Medicare Fee-For-Service
Medicare Advantage
Employer-Sponsored Insurance
Medicaid

Explore service category variation in per-person spending across populations

Inpatient services accounted for the largest share of annual per-person spending for all populations except those with Employer-Sponsored Insurance, where the largest share of spending was on outpatient services. In contrast, outpatient spending accounted for the lowest share of annual per-person spending in Medicaid (17.8%). Prescription drug spending was a larger share of total spending for Medicare Advantage (26.7%) and Medicare Fee-For-Service (26.4%) compared to Employer-Sponsored Insurance (19.4%) and Medicaid (19.9%), which aligns with findings that prescription drug use increases with age.

Mouseover segments on the chart to see more.

Across the state, spending varied widely

Not only is there variation in spending among populations and service categories, there is also variation in spending across North Carolina’s 100 counties.

We adjusted per-person spending at the county level to remove gender and age as the drivers of variation within a population. For example, the composition of the ESI population in each county was adjusted to “look” like the composition of the ESI population at the state level in its gender and age make-up.

Across all populations and age groups, adjusted spending in Jones County, the county with the highest per-person spending, was $10,282. This figure was $2,106 (20.5%) higher than the state average and $3,010 (29.3%) higher than adjusted per-person spending in Wake County, the county with the lowest average.

Mouseover a county to see more.

Adjusted per-person spending for each county varied across the populations

Even after adjustment, the per-person spending among the Medicare Fee-For-Service, Medicare Advantage, and Medicaid populations were higher in Jones county compared to the state averages. The per-person spending in Wake County was lower than the state averages in the Medicare Fee-For-Service, Employer-Sponsored Insurance, and Medicaid populations.

Mouseover a county to see more.

Similar variation occurred across counties. For example, average adjusted per-person spending for the Medicare Fee-For-Service and Medicare Advantage populations in Stanly County were lower than the state average, but those with Medicaid and Employer-Sponsored Insurance had average adjusted spending that was higher than the state averages.

Within each population, adjusted per-person service category spending varied by county

Within each population, there was variation in adjusted service category spending across counties.

Average professional services spending for the Medicare Fee-For-Service population was $3,452 in Gaston County compared to $2,864 in Cleveland County.

Within a population, there was variation in adjusted service category spending across counties.

In the Medicare Advantage population, outpatient services spending was $2,260 in New Hanover County compared to $2,882 in Stokes County.

Within a population, there was variation in adjusted service category spending across counties.

The average per-person prescription drug spending for the Employer-Sponsored Insurance population was $953 in Mecklenburg County compared to $1,347 in Wake County.

Within a population, there was variation in adjusted service category spending across counties.

In the Medicaid population, inpatient services spending averaged $1,866 per-person in Davidson County compared to $1,350 per-person in Macon County.

Use the toggles to see how distribution across service categories varies by population. Mouseover a county to see more.

Medicare Fee-For-Service
Medicare Advantage
Employer-Sponsored Insurance
Medicaid

How to use this tool

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1.

Use the toggles to filter the map by payer type and service category

2.

Hover over counties to see summary spending information.

3.

Click on a county or use the county search bar to dig into county-specific data.

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Per-Person Health Care Spending in North Carolina

Payer Type

The Medicare Fee-For-Service population includes those enrolled in the traditional federal Medicare program, including those 65 or older, those under 65 with certain disabilities, and those with end-stage renal disease.

The Medicare Advantage population includes those eligible for Medicare Fee-For-Service who choose to enroll in a private health insurance plan overseen by the federal Medicare program.

The Employer-Sponsored Insurance population includes employees and family members who receive health insurance coverage through their employer.

The North Carolina Medicaid population includes those eligible and enrolled in the state-administered Medicaid program. This includes low-income adults, children, pregnant women and women receiving postpartum care, refugees, and people with disabilities.

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Service Category

Inpatient applies to services provided to patients who stay at a health care facility (like a hospital or a nursing home) overnight for treatment. It does not include overnight stays for observation only.

Outpatient applies to services provided to patients by health care facilities not requiring an overnight stay or hospitalization. For example, a simple emergency room (ER) visit, an outpatient surgery, or an observation-only stay.

Professional applies services provided to patients by a health care professional, like at an office visit for preventive services or chronic disease monitoring.

Prescription drug spending includes payments made for drugs dispensed by retail and mail-order pharmacies. It does not reflect manufacturer rebates.

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NC Avg. Per Person

Annual Per-Person Health Care Spending

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Per Person Spending Breakdown by Payer Type

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Population Breakdown

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