Decomposing Medical-Care Expenditure Growth

Abe Dunn, Eli Liebman and Adam Shapiro

No 23117, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Medical-care expenditures have been rising rapidly, accounting for over 17 percent of GDP in 2012. In this study, we assess the sources of the rising medical-care expenditures in the commercial sector. We employ a novel framework for decomposing 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: I10 I11 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-hea
Note: EH
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Citations: View citations in EconPapers (2)

Published as Decomposing Medical Care Expenditure Growth , Abe Dunn, Eli Liebman, Adam Hale Shapiro. in Measuring and Modeling Health Care Costs , Aizcorbe, Baker, Berndt, and Cutler. 2018

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Related works:
Chapter: Decomposing Medical Care Expenditure Growth (2016)
Working Paper: Decomposing Medical-Care Expenditure Growth (2012)
Working Paper: Decomposing Medical-Care Expenditure Growth (2012)
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