Decomposing Medical-Care Expenditure Growth

Abe Dunn, Eli Liebman and Adam Shapiro

BEA Working Papers from Bureau of Economic Analysis

Abstract: Medical-care expenditures have been rising rapidly, accounting for almost one-fifth of GDP in 2009. In this study, we assess the sources of the rising medical-care expenditures in the commercial sector. We employ a novel framework for decom- posing expenditure growth into four components at the disease level: service price growth, service utilization growth, treated disease prevalence growth, and demographic shift. The decomposition shows that growth in prices and treated prevalence are the primary drivers of medical-care expenditure growth over the 2003 to 2007 period. There was no growth in service utilization at the aggregate level over this period. Price and utilization growth were especially large for the treatment of malignant neoplasms. For many conditions, treated prevalence has shifted towards preventive treatment and away from treatment for late-stage illnesses.

JEL-codes: E60 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Decomposing Medical-Care Expenditure Growth (2017)
Chapter: Decomposing Medical Care Expenditure Growth (2016)
Working Paper: Decomposing Medical-Care Expenditure Growth (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bea:wpaper:0088

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