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Properties of the inverse gaussian distribution are presented with comments on fitting the distribution to lentgh-of-stay data. A conceptual framework for the hospitalization process is described; it suggests that the inverse gaussian distribution has considerable potential as both a descriptive and prescriptive model of length of stay, especially in the setting of psychiatric hospitals.

The mortality component of contemporary health indexes is discussed. Since these indexes reduce to mortality indexes when only life and death states enter the analysis, they share the conceptual weaknesses of mortality indexes. Also, they do not incorporate consumption variables explicity and therefore provide no structure for relating health status and living standard. Some attention is devoted to methodological problems of assessing survival probabilities, either from survey or experimental data or from beliefs of experts or individuals who are affected directly. The final section deals with individual preferences for survival lotteries. Conceptual weaknesses of common indexes are discussed, several canonical models for survival preferences are presented, the interdependence of individual utilities is discussed, and methods for eliciting individual survival preferences are considered, along with some illustrative empirical results.