Are Health Care Prices Rising When Adjusted for Outcomes? Evidence from Heart Attack Treatments in Ontario

34 Pages Posted: 22 Jun 2007

See all articles by Ruolz Ariste

Ruolz Ariste

Université Laval; Université du Quebec en Outaouais (UQO)

Charles Mallory

Government of Canada - Health Canada

Bachir Belhadji

Government of Canada - Health Canada

Date Written: February 2006

Abstract

Increase in medical spending is an issue in all the developed countries and particularly in Canada. However, given that medical technology is evolving rapidly, we do not know whether price or quantity/quality of services is responsible for more of this increase. The objective of this study is to address the issue of measuring health care price in Canada. We estimate two types of price indices: a service price index (SPI), which prices specific medical services without any adjustment for health outcomes, and a cost-of-living index (COLI), which measures an outcome- adjusted cost of treating a specific health problem. These indices are applied to Acute Myocardial Infarction (AMI - or heart attack) treatment for the period 1995/96 and 2001/02, with cost data provided by the Ontario Case Costing Initiative (OCCI) and mortality data obtained from the Discharge Abstract Database. While we estimate a positive real annual change in AMI treatment price for the SPI, the real COLI fell about 1.0 percent per year under our benchmark assumption on the value of life, without even considering the quality of life of AMI patients.

Keywords: Health Care, Price Index, Cost of Living, Cost-Benefit Analysis, Acute Myocardial Infarction

JEL Classification: I12, D61

Suggested Citation

Ariste, Ruolz and Mallory, Charles and Belhadji, Bachir, Are Health Care Prices Rising When Adjusted for Outcomes? Evidence from Heart Attack Treatments in Ontario (February 2006). Available at SSRN: https://ssrn.com/abstract=993257 or http://dx.doi.org/10.2139/ssrn.993257

Ruolz Ariste (Contact Author)

Université Laval

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Université du Quebec en Outaouais (UQO) ( email )

Case postale 1250
succursale Hull
Gatineau, Québec J8X 3X7
Canada

Charles Mallory

Government of Canada - Health Canada ( email )

200 Eglantine Driveway
Ottawa, Ontario K1A 0K9
Canada

Bachir Belhadji

Government of Canada - Health Canada ( email )

200 Eglantine Driveway
Ottawa, Ontario K1A 0K9
Canada

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