Measuring and Modeling Health Care Costs

Measuring and Modeling Health Care Costs

Ana Aizcorbe, Colin Baker, Ernst R. Berndt, and David M. Cutler

Print publication date: 2019

ISBN: 9780226530857

Publisher: University of Chicago Press


National statistical agencies keep good track of how medical care dollars are spent—how much is paid to hospitals, physicians’ offices, pharmaceutical companies, and the like. However, it has proven much more challenging to measure the productivity of those dollars. What is medical care doing for our health? Given the large size of the US health care sector—roughly $3 trillion annually—measuring medical care productivity is essential in understanding what we get for our medical care dollars and in evaluating productivity growth in the economy as a whole. The National Bureau of Economic Research/Conference on Research in Income and Wealth last published a volume devoted to medical care accounting in 2001 (Cutler and Berndt, eds., “Medical Care Output and Productivity”). That volume brought to the forefront issues of productivity assessment in medicine. In the past 15 years, much has happened in the US health sector and in the ability to evaluate medical care productivity. This present volume thus returns to these themes. We report on methodological issues in measuring health care costs and outcomes, describe analyses of populations and market segments, explore prescription pharmaceutical markets in detail, consider issues in industrial organization and market design, and conclude with chapters on the “benefit incidence” of US public spending on medical care and the relationship between medical R&D and health improvement.

Table of Contents


Ana Aizcorbe, Colin Baker, Ernst R. Berndt, and David M. Cutler

I Methodological Issues in Measuring Health Care Costs and Outcomes

2 A Cautionary Tale in Comparative Effectiveness Research

Armando Franco, Dana P. Goldman, Adam Leive, and Daniel McFadden

3 Decomposing Medical Care Expenditure Growth

Abe Dunn, Eli Liebman, and Adam Hale Shapiro

II Analyses of Subpopulations and Market Segments

5 Measuring Output and Productivity in Private Hospitals

Brian Chansky, Corby Garner, and Ronjoy Raichoudhary

6 Attribution of Health Care Costs to Diseases

Allison B. Rosen, Ana Aizcorbe, Tina Highfill, Michael E. Chernew, Eli Liebman, Kaushik Ghosh, and David M. Cutler

III Prescription Pharmaceutical Markets

8 The Regulation of Prescription Drug Competition and Market Responses

Murray L. Aitken, Ernst R. Berndt, Barry Bosworth, Iain M. Cockburn, Richard Frank, Michael Kleinrock, and Bradley T. Shapiro

IV Issues in Industrial Organization and Market Design

11 Measuring Physician Practice Competition Using Medicare Data

Laurence C. Baker, M. Kate Bundorf, and Anne Royalty

13 Going into the Affordable Care Act

Pinar Karaca-Mandic, Jean M. Abraham,Kosali Simon, and Roger Feldman

V Potpourri