Price Of Medical Services Research Articles

Cost effectiveness of vaccination against pneumococcal pneumonia: an update.

We updated a 1978 cost-effectiveness analysis of vaccination against pneumococcal pneumonia in light of the introduction in 1983 of a 23-valent vaccine, recent medical literature, and different relative prices of medical services. Although other base-case assumptions have remained reasonable, the low estimates of 10% of pneumonia as pneumococcal and a 3-year duration of immunity now appear more likely. Vaccination of a person age 65 or older could gain a year of healthy life for about $6000 in 1983 dollars. Medicare has covered pneumococcal vaccination since 1981. With the revised assumptions, net Medicare expenditures ranged from about $5.50 to $10.50 per vaccination, or from $4400 to $8300 per year of healthy life gained. Vaccination of an elderly person would almost break even, if duration of immunity were 8 years and would be cost saving if the vaccine were administered under a public program. Current levels of vaccination appear too low considering the potential health benefits and cost-effectiveness.

Food Demand and Savings in a Complete, Extended, Linear Expenditure System

Demand equations derived from the classical, constrained, utility-maximization problem state that quantities demanded are functions of all prices and income. An implication is that consumer purchase decisions are interrelated and should be viewed from a systems context. Recent economic events have focused attention on the high prices of energy, medical services, food, and housing, as well as the low level of consumer savings. Such concerns make it desirable that we have estimates of a set of parameters which will allow inferences to be made about the probable response of food demand and savings to changes in consumer income and a comprehensive set of consumer prices. The purpose of this note is to present and compare the parameter estimates and systems projections obtained from two alternative formulations of Lluch's extended linear expenditure system (ELES). Savings is explicitly introduced into both variants by the constrained maximization procedure. From a practical viewpoint, we delineate a set of demand categories which we feel are more relevant to the study of current economic problems than those used in most published studies.

Measuring price inflation in the physician sector of the health care market

The purpose of this study was to indicate the need for the development of an adequate measure of the inflation in prices of medical care services. Although the CPI provides a medical care component, the index has a number of serious shortcomings. These shortcomings hinder its usefulness for policy purposes. The main thrust of this analysis was to suggest an alternative measure of prices of medical care services. This suggested hedonic approach will produce a more realistic measure of medical care prices for policy purposes.

Equal Treatment and Unequal Benefits: The Medicare Program

This paper analyzes the distribution of Medicare benefits among elderly persons on the basis of income, race, and geographical location. It first presents available statistical evidence from Medicare on the distribution of benefits and the magnitude of differentials among these elderly. It then sorts out the contribution to differentials arising from differences in the availability of medical resources. prices of medical services, and other demographic factors. The importance of various Medicare program features on remaining differentials--such as the cost-sharing provisions of Medicare, reimbursement policies, and nondiscrimination enforcement procedures--are then investigated. The effect of health status on utilization of medical services by the elderly is also analyzed, and the distribution of Medicare benefits by income for elderly persons of similar health status is presented. The paper concludes with recommendations for reducing differentials in Medicare benefits and indicates those policy changes which would result in a distribution of benefits more closely related to health care needs of the elderly.

The Pricing Behavior of Medical Groups

This study discusses a model of the pricing behavior of medical groups. Using data collected, by a mail survey, from medical groups in North Carolina, an empirical test of the model is performed. The results suggest that the prices charged by medical groups are positively influenced by the per capita income of the county in which the group is located, and the per physician utilization of medical, technical, and office personnel. They also suggest that for groups in the sample, a non-physician manager and a non-salaried system of remuneration to member physicians are negatively related to the price of medical services. The results of this study also indicate that the managerial structure of group practice is an important area for further research.

Productivity and the Price of Medical Services

The increase in the price of medical services over the last few decades measured in the Consumer Price Index (CPI) has exceeded the total for all other items. The clear implication is that not only have medical services become relatively more expensive but also that the production of these services is subject to a smaller productivity advance than are products and services in the rest of the economy. Table 1 summarizes the relevant figures. It is the argument of this paper that these figures are a poor reflection of productivity change and that in fact the rate of increase of productivity in the medical services has exceeded somewhat the overall productivity increase in the rest of the economy. The CPI (U.S. Department of Labor, relevant issues) attempts to provide a measure of the income compensation required to maintain the consumer at a given utility level. It seems clear that the commodities and services constituting the base for the index should be arguments in the consumer's utility function.

Research on the Demand for Health Services

A Framework for Analysis The sharp rise in the prices of medical care services and expenditures on medical care over the past 20 years has been the major cause for concern over the adequate provision and financing of health services.' If each person's consumption of medical care services were small and the prices charged for these services were low, the welfare aspects of the problem would diminish as would the costs of misallocation of medical care resources. Time could then be spent analyzing other problems of concern to society. Unfortunately, the converse is largely true. Therefore, to avoid costly errors in planning and to minimize the hardships of any unmet needs, the factors that influence prices and utlization in the medical care market must be understood.

Anticipating the Health Needs of Americans: Some Economic Projections

Per capita demand for medical goods and serv ices depends upon three categories of variables: (1) consumer preferences, (2) consumer purchasing power, and (3) prices of medical goods and services compared with other goods and services. Forces in each category are operating to raise market demand. Research is providing new and improved drugs and therapeutic devices which tend to affect prefer ences and direct spending toward health. Rising income is similarly leading to increased demand for medical goods and services; and more crowded urban living quarters with rising prices of household servants are increasing the difficulty of home care for the ill and are producing an enhanced demand for hospital services. While additional medical resources will be needed to meet the rising per capita demand, both the ratios of physicians and hospital beds to population are declining. Adverse effects of the declining relative number of physicians are being reduced by rising physician productivity, but the relative decline in the number of hospital beds is particularly serious in the light of increased per capita use of hospitals. Increased demand for health services is also being reflected in the government medical research and health services budgets. For some years, the percentage of income devoted to the prevention of illness and to treatment of the ill will grow.

Price Behavior and Productivity in the Medical Market

During the past five years, the price of medical services as measured by the relevant components of the Consumer Price Index has risen twice as fast as the cost of living generally. Because the financing of medical care is a key factor in the development of private as well as public plans and proposals for health insurance, the movement of medical care prices is of widespread concern. This article analyzes mainly the behavior of physicians' and surgeons' fees over the past two decades, in an effort to determine the relative importance of the factors responsible for their upward movement. As a result of this analysis, the author finds that the growth of health insurance has not been as important in the rise of medical care prices as is commonly believed, and that the most important factor has been the failure of the supply of medical services to grow with the demand for more medical care. (Author's abstract courtesy EBSCO.)