Pricing Heart Attack Treatments / David M. Cutler, Mark McClellan, Joseph P. Newhouse, Dahlia Remler.

Format:

Book

Author/Creator:

Cutler, David M.

Contributor:

National Bureau of Economic Research.

McClellan, Mark.

Newhouse, Joseph P.

Remler, Dahlia.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7089.

NBER working paper series no. w7089

Language:

English

Subjects (All):

Medical care, Cost of.

Price indexes.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Cambridge, Mass. : National Bureau of Economic Research, 1999.

Summary:

In this paper, we estimate price indices for heart attack treatments, demonstrating the techniques that are currently used in official price indices and presenting some alternatives. We consider two types of price indices, a Service Price Index, which prices specific treatments provided, and a Cost of Living Index, which prices the health outcomes of patients. Both indices are complicated by price measurement issues: list prices and transactions prices are fundamentally different in the medical care field. The development of new or modified medical treatments further complicates the comparison of like' goods over time. And the Cost of Living Index is hampered by the need to determine how much of health improvement results from medical treatments in comparison to other factors. We describe methods to address each of these obstacles. We conclude that whereas traditional price indices when applied to heart attack treatments are rising at roughly 3 percent per year above general inflation, a corrected service price index is rising at perhaps 1 to 2 percent per year above general inflation, and the cost of living index is falling by 1 to 2 percent per year relative to general inflation. We discuss the implications of these results for official price index calculations.

Notes:

Print version record

April 1999.