Measuring Prices in Health Care Markets Using Commercial Claims Data

Health Services Research
March 2015
Neprash, H.T., Wallace, J., Chernew, M.E., and McWilliams, J.M.

Increasingly, policy makers and health services researchers are interested in measuring prices of health care services and understanding how the price of services varies as a function of quality, market structure, managed care penetration, public payer prices, and other factors. Before any conclusions can be reached about determinants of price, price measures must be constructed and their construct validity assessed. This Methods Brief explores different approaches to measuring price, presenting tradeoffs and considerations for various empirical settings. The authors find that market-level price measures that reflect broad sets of services are likely to rank markets similarly. Price indices relying on individual sentinel services may be more appropriate for examining specialty- or service-specific drivers of prices.

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