NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Price Indexes for Acute Phase Treatment of Depression

Ernst R. Berndt, Susan H. Busch, Richard G. Frank

NBER Working Paper No. 6799
Issued in November 1998
NBER Program(s):   HC

Although broad trends in medical spending in the U.S. over the last decade have received widespread attention from policymakers, very little attention has focused on the components of those changes. For many other industries, economists typically divide nominal expenditures by an official government price index to decompose these expenditures into price and quantity components. In this paper we construct a new price index for the treatment of one illness depression. Making use of results from the published clinical literature and from official treatment guideline standards, we identify therapeutically similar treatment bundles. These bundles can then be linked and weighted to construct price indexes for specific forms of major depression. In doing so, we construct CPI and PPI-like medical price indexes that deal with prices of treatment episodes rather than prices of discrete inputs, that are based on transaction rather than list prices, that take quality changes and expected outcomes into account employ current, time-varying expenditure weights in the aggregation computations. We find that regardless of which index number procedure is employed time period the treatment price index for the acute phase of major depression has hardly changed remaining at 1.00 or falling slightly to around 0.97. This index grows considerably less rapidly than the various official PPIs -- thus the price index for the treatment of the acute phase of major depression has fallen over the 1991-95 time period. A hedonic approach to price index measurement yields broadly similar results. These results imply that given a budget for treatment of depression accomplished in 1995 than in 1991. Our results suggest that at least in the case of acute phase major depression, aggregate spending increases are due to a larger number of effective treatments being provided.

download in pdf format
   (314 K)

email paper

A non-technical summary of this paper is available in the April 1999 NBER digest.  You can sign up to receive the NBER Digest by email.

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.

This paper is available as PDF (314 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6799

Published: Ernst R. Berndt & Susan Busch & Richard Frank, 2001. "Treatment Price Indexes for Acute Phase Major Depression," NBER Chapters, in: Medical Care Output and Productivity, pages 463-508 National Bureau of Economic Research, Inc.

Users who downloaded this paper also downloaded these:
Berndt, Busch, and Frank Treatment Price Indexes for Acute Phase Major Depression
Berndt, Bir, , Frank, and Normand w7816 The Medical Treatment of Depression, 1991-1996: Productive Inefficiency, Expected Outcome Variations, and Price Indexes
 
Publications
Activities
Meetings
Data
People
About

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

Contact Us