| The measurement objective of the consumer price index is to provide information regarding how much the current cost of acquiring a constant level of utility is different from the cost of acquiring the same level of utility in a base period. Since the true cost of living index cannot be constructed due to the inability of observing consumers' utility levels, various estimating methods have been suggested and tested. Most of the estimating methods, such as the Laspeyres index and the Paasche index, incur a certain degree of estimating errors because fixed bundles of final goods and services are used to construct the price index. More significant informational distortion could occur by constructing the index with inappropriately defined prices and products.; The current medical care price index is constructed by measuring price changes of the major input factors—physician services, hospital services, and pharmaceutical drugs—of delivering final medical care services. The research medical price index was constructed with diagnosis-related medical treatment as the output service, and the total price of delivering a specific medical treatment as a price. A group of research outpatient price indices reveals a significant diversion from the current outpatient price index constructed by the Bureau of Labor Statistics (BLS). |
