The paper by Papanicolas (2024) seeks to answer the question of how health care prices have changed over the past two decades, comparing US prices to those of Australia, Canada, France, and the Netherlands between 2000 and 2020.
Before delving into the results, it is essential to understand the types of price indices available. The authors highlight three main categories:
- Economy-wide price indices: Examples include GDP price index.
- Price indices covering all household goods and services: Examples include actual individual consumption (AIC) price index.
- National health deflators: These are health-specific price indices produced by various government entities, such as the Centers for Medicare and Medicaid Services in the US.
The authors argue that economy-wide and AIC deflators may not accurately capture changes in health care prices due to the unique nature of health care providers, such as governments.
Although widely used for international comparisons, GDP and AIC price indices may not reflect healthcare-specific price changes accurately. Healthcare prices, provided by non-market producers like governments, may differ significantly from these indices.
The data sources used by the authors include indices such as the Total Health Price Index in Australia and the Personal Health Care Price Index in the US.
Results:
Health care spending growth rates were highest in Australia and the US but lowest in France. The US saw a larger proportion of spending growth attributed to price increases compared to other countries.
The United States exhibited the highest relative cumulative “excess” growth in health prices over the study period, followed by Canada. Meanwhile, France showed the lowest cumulative price growth.
Further analysis showed that price growth for health care purchased by public payers outpaced that of households, as depicted in the figures provided in the full paper.
The full paper can be read here.
