Price indexes provide a way to summarize changes in prices of
individual goods and services using an aggregate statistic. An
important use of these indexes is to decompose changes in spending
into price and quantity components. This is the role that price
indexes play in the National Income and Product Accounts to obtain
measures of real output and productivity. Price indexes are also
used in the National Health Expenditure Accounts to provide
information on the drivers of spending growth in the nation's
health care sector. More broadly, health economists have used
similar decompositions to inform policy debates about which levers
may be used to contain cost growth (Merlis 2000).
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