Économie et Statistique n° 361 Prices - Education - Employment - Society

Economie et Statistique
Paru le : 01/06/2003
Consulter

Measuring health and welfare prices: some methodological problems

Christophe Barret, Jacky Bonotaux et François Magnien

There are numerous problems inherent in the construction of price indices for health goods and services and welfare services. Firstly, there is the very concept of price since these goods and services have «gross» prices, the market prices at which they are sold in the absence of a social security policy, and «net» prices, representing the price that is actually paid by the consumer once a social security body or, more generally, an administration has paid for all or part of the cost. The choice between «gross» price indices and «net» price indices is no mean task, since growth differences can be considerable, especially in the event of social security reimbursement changes. We establish the precise circumstances in which such a change induces contrary gross and net price growth. Another challenging price problem is also raised by health insurance as provided by mutual insurance companies, provident institutions and insurance firms to supplement social security benefits. The ideal would be to monitor net prices ­ premiums paid minus benefits received. Yet in practice, it is only possible to measure the growth in gross prices in the form of the premiums. Our first approximation shows that the induced growth gap is double the growth gap between the premiums paid and the benefits received. Net prices for certain services, especially crèches, depend on the household's income. Correctly incorporating their growth into the calculation of the price index raises all sorts of problems, but enables a subsequent analysis of the determinants of the elasticity of prices to income, which provides a great deal of information about the welfare action field.

Economie et Statistique
No 361
Paru le : 01/06/2003