tive estimate of the total can be extracted from the National Income and Product Accounts (NIPAs) that yield information on GDP and its growth and composition. The national aggregate tells us little that is useful for addressing the major questions listed above. Knowing that total medical care spending is growing is only part of the story. We also need to know if this growth is producing benefits that are keeping pace and are, in some sense, worth it. Knowing that expenditures are growing is not the same thing as knowing why they are growing.

At a highly disaggregated level, a great amount of survey and administrative data also exist that are useful for analyses of medical care, health status, and medical expenditure trends. Missing, however, is a comprehensive analytical database lying between the two extremes—one that permits analysis at a national level of the forces driving medical care costs, of growth in medical services, and of the benefits received from expenditures on health. The panel believes that a combination of improved economic accounts for medical care and a new database for analyzing the health care sector and its impacts on population health is essential for informing policies in these areas; microdata—survey and administrative records—will also always be necessary for understanding of medical care spending, health status, and costs.

Recommendation 1.1: Work should proceed on two projects that are distinct but complementary in nature. One accounts for inputs and outputs in the medical care sector; the other involves developing a data system designed to track current population health and coordinate information on the determinants of health (including but not limited to medical care).

Groundbreaking work that will create a foundation for the first project—the medical care account—is indeed already under way at the statistical agencies. For the second project, measures of current population health could be developed quickly, and information on the determinants of health could be collected more aggressively by the statistical system immediately. However, using the health data system to construct a national health account, as outlined in Beyond the Market (National Research Council, 2005), that systematically tracks population health and its determinants requires much more research on the impact of health care on outcomes, which determines its value. The two kinds of data systems are summarized in the sections that follow and elaborated in greater detail in Chapter 2.

An Economic Account for the Medical Care Sector

An economic account integrates data from diverse sources within an overall analytic framework, so that each individual entry is consistent with all the others and with the total. The best known examples of economic accounts are the NIPAs, compiled by the Bureau of Economic Analysis (BEA), and those produced by the statistical agencies of countries around the world. In the NIPAs, consump-

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