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Use of econometric models to estimate expenditure shares
Justin G Trogdon1, Eric A Finkelstein, Thomas J Hoerger
1RTI International, 3040 Cornwallis Rd., PO Box 12194, Research Triangle Park, NC 27709-2194, USA.
Objective:
To investigate the use of regression models to calculate disease-specific shares of medical expenditures.
Data Sources/Study Setting:
Medical Expenditure Panel Survey (MEPS), 2000-2003.
Study Design:
Theoretical investigation and secondary data analysis.
Data Collection/Extraction Methods:
Condition files used to define the presence of 10 medical conditions.
Principal Findings:
Incremental effects of conditions on expenditures, expressed as a fraction of total expenditures, cannot generally be interpreted as shares. When the presence of one condition increases treatment costs for another condition, summing condition-specific shares leads to double-counting of expenditures.
Conclusions:
Condition-specific shares generated from multiplicative models should not be summed. We provide an algorithm that allows estimates based on these models to be interpreted as shares and summed across conditions.
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