Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

This paper examines trends in Medicare spending over the last three decades for groups of beneficiaries characterized by gender and race. The empirical evidence is drawn from the Continuous Medicare History Sample (CMHS). The CMHS contains longitudinal information on a 5 percent random sample of all Medicare beneficiaries. We find that Medicare spending on behalf of black women and men rose relative to white men both in terms of annual averages and in terms of averages by age. In contrast, average Medicare spending on behalf of white women did not reveal a significant time trend when compared to the spending of white men. Importantly, the gains in Medicare spending on behalf of black males are concentrated in hospitalization spending, while some of the measured gains in relative spending on behalf of black females are associated with spending during the last two years of life. Taking advantage of the longitudinal nature of the data, we further examine the average spending profiles by age of death for successive birth years. The analysis shows that Medicare will have spent more on white and black women than on men for ages of death up the early 80s. Further, average lifetime spending for a representative new entrant to Medicare is calculated using historical and prospective data. The prospective estimates indicate that black women are expected to have the highest lifetime spending and white men are expected to have the lowest. White women and black men are expected to have about equal spending between the spending of black women and white men.