Chapter

Price Indexes for Medical Care Goods and Services

Ernst R. Berndt, David M. Cutler, Richard G. Frank, Zvi Griliches, Joseph P. Newhouse and Jack E. Triplett

in Medical Care Output and Productivity

Published by University of Chicago Press

Published in print April 2001 | ISBN: 9780226132266
Published online February 2013 | e-ISBN: 9780226132303 | DOI: http://dx.doi.org/10.7208/chicago/9780226132303.003.0005
Price Indexes for Medical Care Goods and Services

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The measurement of the output of the medical care system is necessary to assess the productivity levels and growth of a country's economy and medical care system. Medical price indexes have uses other than those involving output and productivity measurement. In the United States, both within the health sector and more generally, contracts occasionally contain provisions that depend on growth of the medical Consumer Price Index (CPI). The CPI and the Producer Price Index (PPI) are also employed in updating fee schedules for certain administered pricing schemes and payments to some health plans. This chapter reviews the measurement issues underlying the construction of medical care price indexes. It describes procedures employed by the U.S. Bureau of Labor Statistics in the construction of its medical CPIs and PPIs (including recent revisions and changes). It also discusses alternative notions of medical care output that involve the price of a treatment episode rather than the prices of fixed bundles of inputs. Finally, the chapter outlines salient features of a new price index for health expenditures.

Keywords: price indexes; medical care; health expenditures; United States; Consumer Price Index; Producer Price Index; Bureau of Labor Statistics; output; prices

Chapter.  26606 words.  Illustrated.

Subjects: Econometrics and Mathematical Economics

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