Quantifying Productivity Growth in Health Care Using Insurance Claims and Administrative Data
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Chapter in forthcoming NBER book Big Data for 21st Century Economic Statistics, Katharine G. Abraham, Ron S. Jarmin, Brian Moyer, and Matthew D. Shapiro
We assess changes in multifactor productivity (MFP) in delivering episodes of care (including that received after initial discharge from a hospital) for elderly Medicare beneficiaries with three important conditions over 2002-2014. Across the conditions, we find that MFP declined during the 2000s and then stabilized. For heart attack, for example, MFP decreased by 15.9% over the study period. While heart-attack patients experienced better health outcomes over time, growth in the cost of care for these episodes dominated. The cost of hospital readmissions among heart-attack patients appears to have increased substantially.