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The medical‐care sector often experiences changes in medical protocols and technologies that cause shifts in treatments. However, the commonly used medical‐care price indexes reported by the Bureau of Labor Statistics hold the mix of medical services fixed. In contrast, episode expenditure indexes, advocated by many health economists, track the full cost of disease treatment, even as treatments shift...
This study introduces a new framework for measuring and analyzing medical-care expenditures. The framework focuses on expenditures at the disease level that are decomposed between price and utilization. We find that both price and utilization differences are important contributors to expenditure differences across commercial markets. Further examination shows that for some diseases utilization drives...
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