NBER Program Project on Satelite National Health Accounts

To give some background, this project is a response to repeated calls of many observers for a ‘satellite’ National Health Account. Satellite accounts derive their name from the fact that they ‘orbit’ around the National Income and Product Accounts, overlapping with them in market activity and supplementing them in non-market activity. The establishment of satellite accounts has been recommended for health, home production, the environment, education, and government/non-profits. Our goal is to develop a satellite account for the U.S. health sector. Satellite accounts have both inputs and outputs, as do traditional national income accounts (e.g., inputs are labor, capital, and raw materials, and output is total sales). The fundamental output of the health system is health. The major inputs are medical spending and risk factors such as smoking and obesity. While there are other inputs (time, the quality of the environment) and outputs (the external financial consequences of improved health), the ones listed above are the major inputs and outputs, and they are what this project focuses on.