A systematic examination of quality-adjusted price index alternatives for medical care using claims data

Seidu Dauda, Abe Dunn and Anne Hall

Journal of Health Economics, 2022, vol. 85, issue C

Abstract: We investigate alternative methods for constructing quality-adjusted medical price indexes both theoretically and empirically using medical claims data. The methodology and assumptions applied in the formation of the index have substantive effects on the magnitude of the quality-adjusted price changes. A method based on utility theory produces the most robust and accurate results, while alternative methods used in recent work overstate inflation. Based on Medicare claims data for three medical conditions, we find declining prices across each condition when properly adjusted for quality.

Keywords: Price index; Quality adjustment; Medical spending (search for similar items in EconPapers)
JEL-codes: E01 E31 I10 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:85:y:2022:i:c:s0167629622000819

DOI: 10.1016/j.jhealeco.2022.102662

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