Producing disease-based price indexes

Monthly Labor Review

Volumn 133, Issue 2, 2010, Pages 20-28

  Bradley, Ralph ^a   Cardenas, Elaine ^a   Ginsburg, Daniel H ^a   Rozental, Lyubov ^a   Velez, Frankie ^a  

^a BUREAU OF LABOR STATISTICS   (United States)

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EID: 77953667028     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (19)

1. A full description of how the CPI measures medical care price movement can be found in " Consumer Price Index: Measuring Price Change for Medical Care in the CPI" (Bureau of Labor Statistics, Feb. 23, 2010), on the Internet at www.bls.gov/cpi/cpifact4.htm (visited Feb. 28, 2010).
2. A Report to the President on Medical Prices (U.S. Department of Health, Education, and Welfare, 1967), p. 13.
3. Matthew D. Shapiro and David Wilcox, " Mismeasurement in the Consumer Price Index: An Evaluation," NBER Macroeconomics Annual, December 1996, pp. 93-142.
4. David M. Cutler, Mark McClellan, Joseph P. Newhouse, and Dahlia Remler, " Are Medical Prices Declining? Evidence from Heart Attack Treatments," Quarterly Journal of Economics, November 1998, pp. 991-1024.
5. See Ernst R. Berndt, Iain M. Cockburn, Zvi Griliches, Theodore E. Keeler, and Martin Neil Baily, " Pharmaceutical Innovations and Market Dynamics: Tracking Effects on Price Indexes on Anti-Depressant Drugs," Brookings Papers on Economic Activity, Microeconomics (Washington, DC, Brookings Institution, 1996), pp. 133-99.
6. Ernst R. Berndt, 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, May 2002, pp. 373-96.
7. An exception is the substitution of less expensive generic drugs for brand-name drugs
8. See Ana M. Aizcorbe, Bonnie A. Retus, and Shelly Smith, " BEA Briefing: Toward a Health Care Satellite Account," Survey of Current Business, May 2008, pp. 24-30.
9. The Federal Medicare Part A program sets its schedule of reimbursement by diagnosis-related groups, which some private insurers use. However, reimbursement is for a particular medical service that treats a particular disease, not for all the treatments for a given diagnosis-related group.
10. See Ana Aizcorbe and Nicole Nestoriak, " The Importance of Pricing the Bundle of Treatments," BEA working Paper no. 2008-04 (Bureau of Economic Analysis, July 2008), on the Internet at www.bea.gov/papers/pdf/wp2008-04_bundle_treatments_paper.pdf (visited Mar. 4, 2010).
11. See Christopher J. Mackie and the National Research Council, Strategies for a BEA Satellite Health Care Account: Summary of a Workshop/Committee on National Statistics, Division of Behavioral and Social Sciences and Education, Christopher Mackie, Rapporteur (Washington, DC, National Academies Press, 2009).
12. See Charles Schultze and Christopher Mackie, eds., At What Price? Conceptualizing and Measuring Cost-of-Living and Price Indexes (Washington, DC, National Academies, 2002). " ICD-9" is an abbreviation used in the medical field that stands for " International Classification of Diseases, ninth revision." The ICD-9 provides a standard classification of diseases for the purpose of maintaining health records. The World Health Organization assigns, publishes, and uses the ICD-9 to classify diseases and to track mortality rates on the basis of death certificates and other vital health records. Medical conditions and diseases are translated into a single format by means of ICD-9 codes.
13. Xue Song, William Marder, William Houchens, John E. Conklin, and Ralph Bradley, " Can a Disease Based Price Index Improve the Estimation of the Medical CPI?" in Price Index Concepts and Measurement (NBER, 2008), pp. 329-72.
14. As a rule, patients move in and out of databases. Thus, when an increase in, for example, the number of patient visits used to treat diabetics is observed in a database, it is unclear whether the change was due to a less effective use of physicians' services or an increase in the number of relatively less healthy patients.
15. In the medical field, the quantity (amount) of a service or good used to treat a disease is oftentimes referred to as utilization. In this article, the quantity of a service (that is, the number of hospital visits) is synonymous with the utilization of that service.
16. Additional information on the MEPS may be found on the Internet at www.meps.ahrq.gov/mepsweb (visited Feb. 28, 2010).
17. Ralph Bradley, " Issues in Computing Disease Based Price Indexes," unpublished BLS manuscript, 2006
18. Cutler, McClellan, Newhouse, and Remler, " Are Medical Prices Declining?"
19. Ralph Bradley, " The Effects of Health Insurance Prices on the Cost of Living Index: The Shadow Price of Worry," unpublished BLS manuscript, 2008