Unbiased Analysis of Today's Healthcare Issues

Which inflation index should I use?

Many studies use data on health care costs from multiple time periods.  To make costs comparable over time, researchers often use an inflation index to translate previous years costs to current dollars.  The first question is, what inflation indices are available to make this adjustment.  A paper by Dunn et al. (2018) reviews the potential […]

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How to construct a Price Index

Price indices are useful for calculating inflation over time.  The consumer price index (CPI) measures changes in prices for the overall economy.  Researchers can also use price indices to understand the evolution of the price of health care over time.  For instance, the Bureau of Labor Statistics also calculates a CPI for Medical Care and […]

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Calculating zero inflation when drug costs rose from $100 to $36,000

A paper by  Claudio Lucarelli and Sean Nicholson  (2009) examines the skyrocketing cost of colorectal cancer treatment.  In 1993, the price of treating these patients with chemotherapy was only $100.  By 2005, this price had skyrocketed to $36,000.  Is this what is wrong with our health care system? The authors claim that the answer is […]

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Health Insurance costs increase 60% over 3 years?

At least this is what David Williams of the Health Business Blog has experienced in paying for his firm’s Blue Cross/Blue Shield plan.  “This year’s increase is 13.3 percent, on top of last year’s 26.3 percent increase and an 11 percent increase the year before. Thanks to the magic of compounding it means the premium […]

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Medical CPI

For many years price increases in the medical sector has outpaced overall inflation by a significant amount. According to the Bureau of Labor Statistics, here is the increase in consumer prices over the last few years. Year Medical CPI CPI Δ 2001 4.7 1.6 3.1 2002 5.0 2.4 2.6 2003 3.7 1.9 1.8 2004 4.2 […]

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