How serious is medical care inflation in the United States? For many years, price indexes for medical care have outstripped the overall rate of inflation. For example, between 1986 and 1996, the medical care component of the Consumer Price Index (CPI) rose 6.5 percent per year, roughly exceeding the annual increase in the overall CPI during this period by 75 percent. Many economists, however, believe that economic statistics on medical care do not accurately measure medical care price changes because it is especially difficult to construct accurate price indexes for medical markets. Some very recent research, reported in this volume, suggests thatcontrary to the usual presumption of runaway medical inflationprices for at least some medical care interventions are not rising rapidly and may even be falling. Understanding medical care inflation is important for policy issues such as medical care cost containment. Medical care price indexes also affect other economic statistics on
