Measuring the Output of Health in the United States

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Measuring the Output of Health in the United
States

• Workshop on Measurement of Non-Market Output in
  Education and Health

Michael S. Christian U.S. Bureau of Economic
Analysis October 4, 2006
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Two Projects in Health Economics

• Home and volunteer production
• Direct volume measurement

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Direct Volume Measurement

• Real health care services measured in U.S. GDP
  accounts by price deflation
• CPI, PPI, input price indexes
• Based on prices of procedures
• Direct volume measurement is an interesting
  alternative

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Inpatient Hospital Services (1)

• Volume of inpatient hospital services
• Simple count of discharges
• Fisher index of discharges by condition
• Fisher index adjusted by survival rate
• Measuring by condition measures some cost savings
  as price decreases
• Substitution to less expensive procedures

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Inpatient Hospital Services (2)

• Survival rate adjustment adapted from Dawson et
  al (2006)
• Two sources on volume, survival rates
• Nationwide Inpatient Sample (NIS)
• National Hospital Discharge Survey (NHDS)
• Fisher weights are mean charges by condition from
  NIS

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Inpatient Hospital Services (3)
Annual volume growth, 1993-2003 Annual volume growth, 1993-2003 Annual volume growth, 1993-2003
NIS NHDS
Simple count 1.1 1.2
Fisher index 1.3 1.6
Survival adjustment 2.1 2.5
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NIS Inpatient Discharges
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NHDS Inpatient Discharges
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Aggregate Survival Adjustment
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Inpatient Hospital Services (4)

• Large effects from survival adjustment
• Indexes only account for cost-saving
  substitutions within inpatient services
• Ignores potentially important substitutions
  across service categories
• Aizcorbe and Nestoriak (2006)