NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Decomposing Medical-Care Expenditure Growth

Abe Dunn, Eli B. Liebman, Adam Shapiro

NBER Working Paper No. 23117
Issued in February 2017
NBER Program(s):Health Care, Health Economics

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.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23117

Published: 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

Users who downloaded this paper also downloaded* these:
Doyle, Graves, and Gruber w23166 Evaluating Measures of Hospital Quality
Einav, Finkelstein, and Mahoney w23100 Provider Incentives and Healthcare Costs: Evidence from Long-Term Care Hospitals
Vogl w23081 Aggregating the Fertility Transition: Intergenerational Dynamics in Quality and Quantity
Dunn, Liebman, and Shapiro Decomposing Medical Care Expenditure Growth
Bernard, Selden, and Pylypchuk w23150 The Distribution of Public Spending for Health Care in the United States on the Eve of Health Reform
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us