We review in considerable detail the conceptual and measurement issues that underlie construction of medical care price indexes in the US, focusing in particular on the medical care consumer price indexes (MCPIs) and medical-related producer price indexes (MPPIs). We outline salient features of the medical care marketplace, including the impacts of insurance, moral hazard, principal-agent relationships, technological progress and organizational changes. Since observed data are unlikely to correspond with efficient outcomes, we discuss implications of the failure of transactions data in this market to reveal reliable marginal valuations, and the consequent need to augment traditional transactions data with information based on cost-effectiveness and outcomes studies.We describe procedures currently used by the US Bureau of Labor Statistics in constructing MCPIs and MPPIs, including recent revisions, and then consider alternative notions of medical care output pricing that involve the price or cost of an episode of treatment, rather than prices of fixed bundles of inputs. We outline features of a proposed new experimental price index -- a medical care expenditure price index -- that is more suitable for evaluation and analyses of medical care cost changes, than are the current MCPIs and MPPIs. We discuss the ways in which medical care transactions enter national economic accounts, including inter-industry flows and national health accounts, as well as aggregate economy implications of possible mismeasurement of prices in the medical sector. We conclude by suggesting future research and measurement issues that are most likely to be fruitful.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Download reference. The following formats are available: HTML,
plain text,
BibTeX,
RIS (EndNote),
ReDIF This chapter was published in: A. J. Culyer & J. P. Newhouse (ed.) Handbook of Health Economics, , chapter 03, pages 119-180, 2000.
For technical questions regarding this item, or to correct its listing, contact: (Heidi Boesdal).
Related research
This chapter was published in the following book, which is listed on IDEAS: A. J. Culyer & J. P. Newhouse (ed.), 2000.
"Handbook of Health Economics,"
Handbook of Health Economics,
Elsevier,
edition 1, volume 1, number 1.
[Downloadable!] (restricted) Keywords:
Find related papers by JEL classification: I1 - Health, Education, and Welfare - - Health
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)