Health care program meeting.

• Position: Analyzing health plans and health quality

Members of the NBER's Program on Health Care, led by Alan M. Garber of NBER and Stanford University, met in Cambridge on May 15 to discuss the following papers:

Laurence C. Baker, NBER and Stanford University, and Martin L. Brown, National Cancer Institute, "Effect of Managed Care on Health Care Providers: Evidence from Mammography"

David M. Cutler, NBER and Harvard University, and Elizabeth Richardson, Harvard University, "Measuring the Health of the U.S. Population"

David M. Blau and Charles Slusher, University of North Carolina, and Donna B. Gilleskie, NBER and University of North Carolina, "The Effect of Health on Employment Transitions of Older Men"

Jonathan Gruber, NBER and MIT; Philip Levine, NBER and Wellesley College; and Douglas O. Staiger, NBER and Harvard University, "Abortion Legalization and Child Living Circumstances: Who is the Marginal Child?" (NBER Working Paper No. 6034)

Baker and Brown investigate the effect of managed care on the health care system, focusing on the effects it could have on the number and types of health care providers and their efficiency. In particular, they examine the relationship between managed care activity and mammography providers. They find that increases in HMO activity are associated with changes in the number of providers, the volume of services produced by each provider, and the prices they charge. This is consistent with the view that HMOs can have broad effects on health care providers.

Cutler and Richardson discuss an economic framework for the measurement of health and present estimates of the health of the population over the past 30 years. They begin by introducing the notion of "health capital," which they define as "the present value of the utility resulting from a person's lifetime health." They identify the set of diseases a person can have and measure the prevalence of these diseases over time; then they estimate quality-of-life for a person with each disease or combination of diseases. Next, they value those quality-adjusted lifeyears in dollars. Their results show that health has been improving over time: over the past two decades, health has increased by about $300,000 for the average...