A problem with consumer surplus measures of the cost of practice variations

David Dranove*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Estimates of the surplus loss due to physician practice variation measure the area under the 'shifted' demand curve. This method is valid only if the unshifted demand curve is derived from the distribution of true (ex post) values of care. If the unshifted demand curve does not reflect the true value of care, then the traditional methods of measuring surplus loss can be seriously biased.

Original languageEnglish (US)
Pages (from-to)243-251
Number of pages9
JournalJournal of Health Economics
Volume14
Issue number2
DOIs
StatePublished - Jun 1995

Keywords

  • Consumer surplus
  • Medical demand
  • Medical practice variations

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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