Date and Time
February 25, 2009
1:30 PM - 3:00 PM

Availability
Open to the public
No RSVP required

Speaker
M. Kate Bundorf - Stanford University

Collaborators: Loren Baker and Anne Royalty

Health expenditures per capita have risen faster than inflation each year since 1980. Despite widespread concern over the size and persistence of cost increases, much remains unknown about the sources of cost growth. While researchers usually identify technological advance as the primary driver of cost growth, much of the evidence for this relies on “residual” methods in which researchers attribute the portion of cost growth that is not explained by other, more easily measurable, factors to changing technology. Studies decomposing trends in health care spending have tended to focus on particular aspects of growth among Medicare beneficiaries. Existing work leaves open important questions about how changing utilization patterns and changing prices contribute to cost growth among the working-aged population with employer-sponsored coverage. In this talk, I present evidence on the sources of cost growth among the privately insured by analyzing the contributions to spending growth of changes in prices and changes in the number and types of services performed. Using detailed insurance claims data from 8 large self-insured employers covering the period 2001 to 2006, we document the rate of growth of spending overall as well as by sector (in-patient services, out-patient services and pharmaceuticals). We then decompose spending growth within each sector into changes in prices and changes in quantities for more detailed sets of services.