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The Medical Treatment of Depression, 1991-1996: Productive Inefficiency, Expected Outcome Variations, and Price Indexes

  • Ernst R. Berndt
  • Anupa Bir
  • Susan H. Busch
  • Richard G. Frank
  • Sharon-Lise T. Normand
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    We examine the price of treating episodes of acute phase major depression over the 1991-1996 time period. We combine data from a large retrospective medical claims data base (MarketScanTM, from the MedStat Group) with clinical literature and expert clinical opinion elicited from a two-state Delphi procedure. This enables us to construct a variety of treatment price indexes that include variations over time in the proportion of off-frontier' production, as well as the corresponding variations in expected treatment outcomes. We also incorporate the fact that the no treatment option ( waiting list') frequently results in spontaneous remission of depressive symptoms. We find that in general the incremental cost of successfully treating an episode of acute phase major depression has generally fallen over the 1991-96 time period. Based on hedonic regression equations that account for the effects of changing patient mix, we find price reductions that range from about -1.66% to -2.13% per year. An implication of this is that, since expenditures on depression are thought to be increasing since at least 1991, the source of the spending increases is volume (quantity) increases, and not price increases.

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    File URL: http://www.nber.org/papers/w7816.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7816.

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    Date of creation: Jul 2000
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    Publication status: published as Berndt, Ernst R., Anupa Bir, Susan H. Busch, Richard G. Frank and Sharon-Lise T. Normand. "The Medical Treatment Of Depression, 1991-1996: Productive Inefficiency, Expected Outcome Variations, And Price Indexes," Journal of Health Economics, 2002, v21(3,May), 373-396.
    Handle: RePEc:nbr:nberwo:7816
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    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    1. Berndt, Ernst R. & Cutler, David M. & Frank, Richard G. & Griliches, Zvi & Newhouse, Joseph P. & Triplett, Jack E., 2000. "Medical care prices and output," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 3, pages 119-180 Elsevier.
    2. Berndt, Ernst R. & Finkelstein, Stan N. & Greenberg, Paul E. & Howland, Robert H. & Keith, Alison & Rush, A. John & Russell, James & Keller, Martin B., 1998. "Workplace performance effects from chronic depression and its treatment," Journal of Health Economics, Elsevier, vol. 17(5), pages 511-535, October.
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