Unbiased Analysis of Today's Healthcare Issues
Can health care productivity be increasing even as costs are rising so fast? This may be the case. One study by Aizcorbe and Nestoriak (2011) examines this phenomenon. “Using retrospective claims data for a sample of commercially insured patients, we find that, on average, expenditures to treat diseases rose 11% from 2003Q1 to 2005Q4 and…
In this post, I discussed how to construct the Laspeyres, the Paasche, and the Fisher price index. In practice, the Laspeyres tends to overstate the price increase and the Paasche tends to understate the price increases. Let us look at the following example to see why this is the case. In this spreadsheet, I use…
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…
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…
One question that plagues health economists is estimating the price inflation of medical care. The output measured in these indices should be “health,” but this is often difficult to measure. Typically, economists simply look at the price increase of different inputs (e.g., the cost of a doctor’s visit, the cost of pharmaceuticals, the cost of…