NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Colin S. Baker

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NBER Working Papers and Publications

February 2017Introduction to "Measuring and Modeling Health Care Costs"
with Ana Aizcorbe, Ernst R. Berndt, David Cutler
in Measuring and Modeling Health Care Costs, Ana Aizcorbe, Colin Baker, Ernst Berndt, and David Cutler, editors
Medical care costs accounts for nearly 18% of Gross Domestic Product (GDP) and 20% of government spending. As a country, we know a lot about where the medical dollar goes. Thirty-eight percent of medical care dollars are paid to hospitals, 31% is paid for professional services, 12% is for outpatient pharmaceuticals, and so forth. But this is not really what we value. The goal of medical care is not to poke, prod, or take pictures of our insides; rather, it is to improve our wellbeing. To really understand health care, we need to determine what it is doing for our health. Health accounting is not easy. Academics and statistical agencies have struggled with it for decades. Questions range from the mundane – how do colonoscopy prices vary across payers? – to the fundamental – to what extent i...
December 2013The Simultaneous Effects of Obesity, Insurance Choice, and Medical Visit Choice on Healthcare Costs
with Ralph Bradley
in Measuring and Modeling Health Care Costs, Ana Aizcorbe, Colin Baker, Ernst Berndt, and David Cutler, editors
Several studies have estimated the increases in health care spending from rising obesity prevalence, but they have not accounted for the endogeneity of insurance. This study recognizes that there are unobserved heterogeneous factors that guide choices on health insurance, body mass index (BMI) and care-seeking behavior, with the idea that neither health insurance nor BMI should be treated as exogenous when estimating a cost function. Also, this study uses a Tobit model to account for corner solutions in which individuals have a medical expenditure of zero. We find that obesity raises medical costs by $430.33, and that a 10% reduction in the BMI of each obese person would only lower costs by $45.28. The obesity elasticity with respect to cost is only .0115%.
 
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