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Medical Care in the Consumer Price Index

Medical Care in the Consumer Price Index

(p.203) 5 Medical Care in the Consumer Price Index
Medical Care Output and Productivity
Ina Kay FordDaniel H. Ginsburg
University of Chicago Press

The medical care component of the Consumer Price Index (CPI) is evolving into a more comprehensive measure of household medical expense price movement in the economy. The personal consumption expenditure is the part of gross domestic product that approximately corresponds to the CPI. The sample of retail outlets for most CPI basic indexes is drawn from the Point of Purchase Survey (POPS), conducted by the Census Bureau for the Bureau of Labor Statistics (BLS). As of publication of the January 1995 CPI, BLS changed the way the CPI treats prescription drugs that lose patent protection. The CPI has not been able to develop a feasible method to directly price health insurance. This chapter discusses the CPI's use of health expenditures, measurement approaches, and other methodological issues to obtain weights and prices. It looks at the organization of the CPI medical care major group as of January 1998, when a revised CPI was introduced.

Keywords:   medical care, Consumer Price Index, personal consumption expenditure, Point of Purchase Survey, prescription drugs, health insurance, health expenditures, measurement

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