Distribution of elderly peoples visits to physicians

Executive Summary
In the following paper, we aim to The following papers aim is to
explain the distribution of the visits of elderly people to physicians.
The NBD models are based on a sample of the 1987 National Medical
Expenditure Survey1 that has 4,406 individual observations and was
taken in the United States.
I will not only look at the data set as a whole but I will compare
different segments to understand their differences, if any. The reader
will find if there is a major difference between the behavior of women
and menmale and female behavior, if the perceived health makes an
impact on the amount of visits and if having private insurance or
being part of the Medicaid program somehow influenced the
populations behavior.
Motivation
My main motivation is to understand one of the cost drivers for
insurance companies, which is the frequency of visits to physicians.
This dataset does not contain the cost of each visit or other type of
costs like hospitalization or emergency visits, therefore it is not
enough does not allow us to estimate lifetime cost of a customer but
will definitely prove or disprove my initial hypothesis that elder people
are used to visit physicians very often. I came to this hypothesis
based on two things: first,on the fact that elder people have more
time; second, elder people and, additionally, tend to get sick often,
hence making themthey are more propense to visit a physician.
Data Source

1 Deb, P. and P.K. Trivedi (1997) Demand for Medical Care by the
Elderly: A Finite Mixture Approach, Journal of Applied Econometrics,
12, 313-326.
1

As mentioned in the executive summary, the data used is from the

1987 National Medical Expenditure Survey,. This dataset isit is divided
into six categories but, for the purpose of this paper, I focused on two:
the number of physician office visits and the number of physician
outpatient visits because I believe them to be the most representative
of all. For example, the non-physicians is a big category and therefore
the visit could relate to personal health or other type of problems.
Regarding the attributes, I focused in the ones I feel believe are the
more relevant: I care about the gender because women could be
more likely to recognize that they need to see a doctor than men, on
perceived health because if a person thinks that he or she is sick he
or she will be more likely to visit a doctor, and, finally, on having
private insurance or Medicaid as it should influence the frequency of
usage since, usually in this cases, usually people need to do a copayment instead of paying the full bill. Please refer to Exhibit 1 for a
sample of the data used and Exhibit 2 for the labels
descriptiondescription of the variables.
NBD Analysis
As mentioned before I ran four different models to understand the
distribution of elderly peoples visits to the physicians. My initial
assumption was that their exposure rates would be high; hence the r
of the NBD should be grater than 1. After conducting the four
analyses I found that all the r parameters obtained in these models
are closer to 1 than to two, meaning that elders do not go to the
physician as often as I thought. It is important to point out that this
does not mean that they do not want to go to the doctor, it means
that they are less likely to go but even though they would not have
any problem in going.
Before going in depth into each NBD, given the long tail presented in
the data I chose to take the first 20 rows as they are aand tothen
aggregate all the rest.

For example, the range of the total sample went from 0 visits to 141
visits per year. Instead of trying to fit a model for that range I will
rather focus on the first 20 rows and add up the rest from 21 to 141.
600
500
400
300

Pa ents

200

0
3
6
9
12
15
18
21
24
27
30
33
36
40
43
46
50
54
58
62
68
110

100

Original data set

600
500
400
300

Pa ents

200
100
0
0

10

12

14

16

18

20

Aggregated data set

I took this decision given that I do not know the details of the data
therefore I do not have a story for the outliers.s.
Visits to Physicians by the total sample
The NBD using the total sample resulted in an r parameter of 1.15,
which means that our population does not visit physicians as often as
I thought. Because this NBD had a P-Value for the Chi-Squared test of
0.04, I decided to run a new NBD with a spike at 0 assuming that
there might be a part of the sample that just did not go to physicians.
After re-running the model, I obtained an r parameter of 1.31, aPValue of 0.52 and a LRT P P-Value of 0.00, hence the model with the
spike at 0 is not only better in terms of fit but we can say that both
models are different. From the new NBD model we can conclude that
there are 3.465% of the population that would not go to see a

physician and that the mean is 6.55 visits per year. [El 3.5% es en
cantidad o en probabilidad?]
Using the Method of Moments and Mean and Zeroes I obtained even
smaller r, 0.76 and 1.03 respectively. This implies that using this
analyses one could believe that elders are less likely to go to the
doctor than they actually are.
The table with the relevant outcomes of the model and both
histograms is in Exhibit 3.
Men vs. Women
In order to get a deeper understanding of the sample I decided to
analyze the differences between men and women. My initial
hypothesis is that men are less likely to go to the doctor than women,
I could even argue that there will be a spike at 0 for men and not for
women. After analyzing both scenarios I proved my hypothesis, as
men have a spike at 0 of 5.4% while womens model does not have
one. [El 5.4% es en cantidad o en probabilidad?]
Both r are similar: 1.29 for men and 1.33 for women, this means that
both do not visit a physician very often,; the difference, as pointed
before, is that 5.4% of men in our sample will never visit a physician.
In both analyses, but especially for Men, the histograms do not show
a good fit. As you can see in Exhibit 4 and 5, even though the P-Values
are large enough, the histograms do not show a good fit between the
actual and the expected number of persons.
When I used the Method of Moments and Means and Zeroes I saw how
the predicted r for men was lower than the one for women. In this
case, , my interpretation is that this is the way in which both methods
show the spike at cero for men.
r
Method of Moments
Meansand Zeroes

Men Women
0.62
0.89
0.92
1.06

Results for Method of Moments and Means and Zeroes

Please refer to Exhibits 4 and 5 for the complete results of the NBDs.

Self perceived health

One variable that I believe is extremely relevant is how each person
perceives each its own health., in In this matter, my hypothesis is that
people that perceive their health as being poor will be more inclined
to see a physician than people that perceive their health as excellent.
The three parameters of this attribute are poor, other, and excellent.
The NBD for people with poor self-perceived health had P-Value of
0.07 but there was little fit according to the histogram (Exhibit 6) that
is why I decided to run a model with a spike at 0. The new models
histogram (Exhibit 6) still did not show a good fit but had a P-Value of
0.64, which is much larger than the initial 0.07. The NBD with spike at
zero has an r of 1.9 that confirms that people who think they have
poor health are more likely to see a physician, at least more likely that
than the sample as a whole, which had an r of 1.31 (Exhibit 3). The
analysis also shows that 4.6% of the people with poor self-perceived
health will never go to a physician. [de Nuevo, el 4.6% es levels o %?]
The Method of Moments and the Means and Zeros methods give both
lower r than the MLE, again I assume that they are somehow
accounting for the spike at zero.
The NBD for people that did not specified their perceived condition
other (Exhibit 7) is similar to the NBD for the whole sample. It has
an r of 1.37 vs. an r of 1.31 of the total sample, and it has a spike at 0
of 3.47% vs. 3.46% of the total population. I assume that this is
because there are 3,509 others vs. a total population of 4,406;
therefore they tend to behave the samein a similar way. The Method
of Moments and the Means and Zeros both give lower r but they are
not similar to the ones from the total sample, this may prove that
both methods are not as accurate in estimated estimating the true r.
Finally we have the people with excellent self-perceived health.
When I compared the NBD with the NBD with spike at 0 for this group,
the conclusion is that there is no significant difference between both
groups, as the test shows anthey have a LRT P-Value of 0.19 (Exhibit
8). As expected, the r for this people is 1.12, which is lower than the

1.9 that we got from the people with poor self-perceived health.
This means that they are less likely to go to a physician, but since
there is no spike at 0 all of them would be ok going while in the other
group we do have 4.6% that will never visit. In this case the Method of
Moments and the Means and Zeroes methods have r of 0.65 and 0.55
respectively, which are much smaller than the 1.12 we got with the
MLE. This will imply a much lower usage of physicians than the reality.
r
Method of Moments
Meansand Zeroes

Poor
0.98
1.51

Other
0.80
0.91

Excellent
0.65
0.55

Results for Method of Moments and Means and Zeroes

Please refer to Exhibits 6, 7 and 8 for the complete results of the
NBDs.
Coverage (Medicaid and Private Insurance)
When analyzing the NBD of people with and without coverage I found
a similar problem than with the others category in self-perceived
health, there are 3,672 people with some kind of coverage and that
makes their parameters similar to the ones in the total sample. It has
a spike of 2.55% at 0 and an r of 1.39. As in the other scenarios, the
other two methods show lower r but do not seem to capture much
more information.
When I analyzed the people who are not covered I found that they
had an r of 0.76 and no spike at zero, this is very interesting because
it means that they do not go to the physician often, probably because
they do not have coverage, but the would go if they want or maybe if
they could. This is also showed in the mean, which is the lowest of all
the NBDs at 4.75 visits vs. the 6.55 of the total sample.
r
Method of Moments
Meansand Zeroes

Coverage
0.84
0.99

NoCoverage
0.42
0.74

Results for Method of Moments and Means and Zeroes

Please refer to Exhibits 9 and 10 for the details of the NBDs.

Conclusions
Given the research we can conclude that elder people do not go as
often to see a physician as we would have expected to see a
physician, there is a total mean of 6.55 with a median of 4 [of visits
per year?]. Regarding the segments, all the hypothesis were proved
right. , eEven though men and women who visit physicians do it in a
similar way, there are 5.4% men who would not see a physician while
there is no spike at women.
Again, as we expected, there are people with poor self-perceived
health are who are more likely to see a physician than people with
excellent self-perceived health. Finally, because they are compose
approximately 85% of the sample it is hard to conclude anything
different about the covered people, while in the case of the uncovered
we know that they do not visit physicians as often as the rest of the
categories.
In general, even though there is not complete data to asses a thethe
elders insurance market, the reader could get an idea of how to
segment that market and what to expect from that segmentation.
[Haria referencia a las tablas del apendice en el texto o las incluiria
entre el texto. Si no son parte de las referencias, no deberan estar]

Exhibits
Exhibit 1, Data Set Sample

ofp ofnp opp opnp emr hosp numchron adldiff age black
1 5
2 1
3 13
4 16
5 3
6 17
7 9
8 3
9 1
10 0

0
0
0
0
0
0
0
0
0
0

0
2
0
5
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
2
3
1
0
0
0
0
0
0

1
0
3
1
0
0
0
0
0
0

2
2
4
2
2
5
0
0
0
0

0
0
1
1
1
1
0
0
0
0

6.9
7.4
6.6
7.6
7.9
6.6
7.5
8.7
7.3
7.8

yes
no
yes
no
no
no
no
no
no
no

sex

maried school

male
female
female
male
female
female
female
female
female
female

yes
yes
no
yes
yes
no
no
no
no
no

6
10
10
3
6
7
8
8
8
8

faminc employed privins medicaid

2.881
2.7478
0.6532
0.6588
0.6588
0.3301
0.828
3.0456
3.0456
3.0456

yes
no
no
no
no
no
no
no
no
no

yes
yes
no
yes
yes
no
yes
yes
yes
yes

no
no
yes
no
no
yes
no
no
no
no

region

hlth

other
other
other
other
other
other
midwest
midwest
midwest
midwest

other
other
poor
poor
other
poor
other
other
other
other

Exhibit 2, Description of Labels

Label
ofp
ofnp
opp
opnp
school
faminc
employed
emr
hosp
numchron

Descrpiction
number of physician office visits
number of nonphysician office visits
number of physician outpatient visits
number of nonphysician outpatient visits
number of years of education
familyincomein 10000\$
istheperson employed ?
number of emergencyroomvisits
number of hospitalizations
number of chronic conditions

Label

Descrpiction

adldiff
privins
medicaid
region
age
black
sex
maried
hlth

theperson hasacondition that limitsactivities of dailyliving?

istheperson covered byprivatehealth insurance?
istheperson covered bymedicaid ?
theregion (noreast
agein years(divided by10)
istheperson africanamerican ?
istheperson male ?
istheperson maried ?
self-perceived health (excellent

Exhibit 3, NBD model results for Visits to Physicians of the

total sample
NBD
r
Alpha
P Value
Mean
Spikeat 0

1.15
0.18
0.04
6.39

LRTP Value

NBDwithSpikeat0
1.31
0.20
0.52
6.55
3.46%
0.00

600

600

500

500

400

400
Pa ents

300

Pa ents

300

Expected

Expected

200

200

100

100

0
0 1 2 3 4 5 6 7 8 9 101112131415161718192021
NBD

0 1 2 3 4 5 6 7 8 9 101112131415161718192021
NBDwith Spikeat 0

Exhibit 4, NBD model results for Visits to Physicians of Men

NBD
r
Alpha
P Value
Mean
Spikeat 0

1.05
0.18
0.20
5.83

LRTP Value

NBDwithSpikeat0
1.29
0.20
0.79
6.45
5.40%
0.00

300

300

250

250

200

200
Pa ents

150

Pa ents

150

Expected

Expected

100

100

50

50

0
0 1 2 3 4 5 6 7 8 9 101112131415161718192021

0 1 2 3 4 5 6 7 8 9 101112131415161718192021

NBD

NBDwith Spikeat 0

Exhibit 5, NBD model results for Visits to Physicians of Women

NBD
r
Alpha
P Value
Mean
Spikeat 0

1.22
0.19
0.40
6.42

LRTP Value

NBDwithSpikeat0
1.33
0.20
0.59
6.65
2.15%
0.05

350

350

300

300

250

250

200

Pa ents

150

Expected

200

100

100

50

50

Pa ents

150

Expected

0
0 1 2 3 4 5 6 7 8 9 101112131415161718192021
NBD

0 1 2 3 4 5 6 7 8 9 101112131415161718192021
NBDwith Spikeat 0

Exhibit 6, NBD model results for Visits to Physicians of people

with poor self-perceived health
NBD
r
Alpha
P Value
Mean
Spikeat 0

1.45
0.15
0.07
9.67

LRTP Value

NBDwithSpikeat0
1.90
0.18
0.64
10.56
4.60%
0.00

70

70

60

60

50

50

40

40

Pa ents

30

Pa ents

30

Expected

20

20

10

10

Expected

0
0 1 2 3 4 5 6 7 8 9 101112131415161718192021

1 2 3 4 5 6 7 8 9 10111213141516171819202122

NBD

NBDwith Spikeat 0

Exhibit 7, NBD model results for Visits to Physicians of people

with other self-perceived health
NBD
r
Alpha
P Value
Mean
Spikeat 0

1.20
0.20
0.16
6.00

LRTP Value

NBDwithSpikeat0
1.37
0.22
0.76
6.23
3.47%
0.00

500

500

450

450

400

400

350

350

300

300

250

Pa ents

250

Pa ents

200

Expected

200

Expected

150

150

100

100

50

50

0
0 1 2 3 4 5 6 7 8 9 101112131415161718192021

0 1 2 3 4 5 6 7 8 9 101112131415161718192021

NBD

NBDwith Spikeat 0

Exhibit 8, NBD model results for Visits to Physicians of people

with excellent self-perceived health
10

NBD
r
Alpha
P Value
Mean
Spikeat 0

1.12
0.31
0.19
3.61

LRTP Value

NBDwithSpikeat0
1.43
0.37
0.17
3.86
6.83%
0.19

80

80

70

70

60

60

50

50
Pa ents

40
30

Pa ents

40

Expected

Expected

30

20

20

10

10

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 15 17 19 22 65

0 1 2 3 4 5 6 7 8 9 10 11 12 13 15 17 19 22 65

NBD

NBDwith Spikeat 0

Exhibit 9, NBD model results for Visits to Physicians of people

with coverage
NBD
r
Alpha
P Value
Mean
Spikeat 0

1.26
0.19
0.15
6.63

LRTP Value

NBDwithSpikeat0
1.39
0.21
0.52
6.62
2.55%
0.00

450

450

400

400

350

350

300

300

250

Pa ents

200

Expected

250

150

150

100

100

50

50

Pa ents

200

Expected

0
0 1 2 3 4 5 6 7 8 9 101112131415161718192021
NBD

0 1 2 3 4 5 6 7 8 9 101112131415161718192021
NBDwith Spikeat 0

Exhibit 10, NBD model results for Visits to Physicians of

people without coverage
11

NBD
r
Alpha
P Value
Mean
Spikeat 0

0.76
0.16
0.80
4.75

LRTP Value

NBDwithSpikeat0
0.94
0.18
0.89
5.22
7.05%
0.11

160

160

140

140

120

120

100

100
Pa ents

80

Expected

60

Expected

60

40

40

20

20

Pa ents

80

0
0 1 2 3 4 5 6 7 8 9 101112131415161719202122
NBD

1 2 3 4 5 6 7 8 9 1011121314151617181920212223
NBDwith Spikeat 0

12