Statistics Canada, Ottawa, Ontario
Canada K1A 0T6
NBER Working Papers and Publications
|September 2014||Experimental Measures of Output and Productivity in the Canadian Hospital Sector, 2002 to 2010|
with Wulong Gu
in Measuring Economic Sustainability and Progress, Dale W. Jorgenson, J. Steven Landefeld, and Paul Schreyer, editors
This paper constructs a direct output measure of the hospital sector in Canada. The volume index of the output of the hospital sector is estimated from aggregating the number of inpatient cases and outpatient cases using their cost share as weights. It also examines two potential sources of bias in this cost-weighted volume index: substitution bias and aggregation bias. The analysis reveals a large substitution bias in the volume index when inpatient treatment and outpatient treatment of the same medical disease/condition are aggregated using their respective unit costs as weights. The substitution bias essentially captures quality improvements associated with the shift away from inpatient treatment toward outpatient treatment. The volume index of the hospital sector output corrected for s...