The medical treatment of depression, 1991-1996: Productive inefficiency, expected outcome, and price indexes

We examine the price of treating episodes of acute phase major depression over the 1991-1996 time period. We combine data from a large retrospective medical claims data base (MarketScan, from the Medstat Group) with clinical literature and expert clinical opinion elicited from a two-stage Delphi procedure. This enables us to construct a variety of treatment price indexes that include variations over time in the proportion of the "off-frontier" production, as well as the corresponding variations in expected treatment outcomes. We find that in general the incremental cost of successfully treating an episode of acute phase major depression has generally fallen over the 1991-1996 time period. Based on hedonic regression equations that account for the effects of changing patient mix, we find reductions that range from about -1.66 to -2.13% per year. (May 2002)