Modernizing the Consumer Price Index for the 21st Century (2022) / Chapter Skim
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Pages 126-142
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From page 126... ...
To date, compliance with this requirement has been extremely low.19 However, in a bid to improve compliance, the Biden 19 Documentation of this point can be found here: https://healthcareexecintelligence. healthitanalytics.com/news/hospitals-fall-short-of-price-transparency-rule-compliance. A00858 -- Consumer Price Index REV.indd 126 8/15/22 11:54 AM
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The above recommendation notwithstanding, the panel recognizes that fall ing response rates are making reliance on the indirect method increasingly 20 www.cms.gov/newsroom/press-releases/cms-oppsasc-final-rule-increases-price-trans parency-patient-safety-and-access-quality-care. A00858 -- Consumer Price Index REV.indd 127 8/15/22 11:54 AM
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From page 128... ...
The volatility shown in the insur ance services component of the total health insurance price index has been a source of concern for users. We show in Appendix 5A that part of this volatility may reflect unantici pated price changes that do not affect the total health insurance price index but move the price of insurance services and medical services in opposite directions.
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would help smooth out any noise in the quarterly patterns of retained earnings. A first step in this work is to test the performance of estimates based on disaggregated financial statement data against those based on the lagged A00858 -- Consumer Price Index REV.indd 129 8/15/22 11:54 AM
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Recommendation 5.8: As the data ecosystem continues to evolve, re search by BLS should continue evaluating how to accelerate incorpora tion of claims data, hospital data, health plan data, and scanner data on drugs to improve the coverage, detail, and timeliness of price and quan tity information in the medical care component of the CPI. Given the large cost in both time and money associated with using claims data, BLS should combine the efforts of those producing PPIs with those A00858 -- Consumer Price Index REV.indd 130 8/15/22 11:54 AM
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Another motivation for acquiring and developing agility using claims data is that these data are crucial for constructing disease-based price indexes that can eventually be used to quality adjust health care prices. As noted in much of the literature on health care quality, the only way to properly ac count for the changing quality of health care is by tracking outcomes, and a first necessary step in such an endeavor is to track nominal spending by disease, which can then be deflated by an index that accounts for changes in outcomes from treatments for that disease over time.
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The primary data source for the BEA and BLS disease-based price indexes is the Medical Expenditure Panel Survey, which is not timely and has a relatively small sample size particularly for calculating price indexes for less common medi cal conditions. To address these deficiencies, BLS must acquire and research integration of claims data for this use.
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. A00858 -- Consumer Price Index REV.indd 133 8/15/22 11:54 AM
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are fixed at t-1 values so, if these weights change over the period, this approximation will differ from true premium inflation. A00858 -- Consumer Price Index REV.indd 134 8/15/22 11:54 AM
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P t−1 RE t−1 M ,t−1 t−1 B t−1 REt P RE P Q B = M ,t * t −1 M ,t , M,t + t − 1 RE Prem PM ,t−1 Premt−1 t−1 t−1 P Q M t – 1 M, t – 1 PM ,t REt−1 REt PM ,t−1QM ,t−1 PM ,t PM ,t−1QM ,t−1 = + PM ,t−1 Premt−1 PM ,t QM ,t REt−1 PM ,t−1 Premt−1 Premt REtQM ,t−1 PM ,t QM ,t QM ,t−1 QM ,t−1 Premt−1 = + = REt + Bt = Premt−1QM ,t Premt−1QM ,t Premt−1QM ,t QM ,t QM ,t−1 A00858 -- Consumer Price Index REV.indd 135 8/15/22 11:54 AM
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28 Small effects could be observed since, although patients may not have much exposure to the full price, they have some and demand is not perfectly inelastic. A00858 -- Consumer Price Index REV.indd 137 8/15/22 11:54 AM
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This formulation would partially bridge the gap between the indirect and the direct methods, as can be seen by comparing equation (5.2) with the formulation of the direct method: A00858 -- Consumer Price Index REV.indd 138 8/15/22 11:54 AM
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has responded over the years is to produce price indexes (as well as other economic statistics) tailored to measuring trends for specific population subgroups.
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The m echanics of the calculation are readily illustrated by the several versions of the CPI already published. BLS currently produces official price indexes for two population subgroups -- all urban consumers (CPI-U)
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