Econometric Forecasts of Health Services and Health Manpower

This paper presents the Human Resources Research Center (H.R.R.C.) macroeconometric model of the health care systems of the United States and examples of its use in the study of health services and health manpower. This model contains 37 behavioral equations and identities treating both demand and supply factors in the markets for health services and health manpower. The model explains utilization rates and prices of health services, occupancy rates and beds for inpatient institutions, and employment and wages for health manpower. The model is used for structural analysis by studying estimated coefficients and implied elasticities. The paper reports estimated price, income and insurance elasticities of demand for hospital inpatient and outpatient care and for visits to medical specialists and to surgical specialists. The model is also used for policy evaluation via simulating future values of variables of the health care system under alternative assumptions as to policy variables. The paper reports analyses of two types of policy initiatives, the first involving features of various national health insurance plans and the second involving policies designed to increase the total number of physicians.