an effective way that will allow the capture of rural as well as urban parts of the country.

The last issue is, should thresholds vary across population groups? Yes, is Ziliak’s answer, but then the real question is how and for whom. Cunningham presented important trends in financial burden across the presence and the number of chronic conditions. Claxton presented interesting trends based on firm size and ownership, looking more at family versus single type firms. If the measure of medical care risk is to be prospective, then it suggests that a model is going to need to incorporate something about chronic conditions, firm size, and perhaps self-employment status, to address what type of economic risk an individual is going to face.

Ziliak then spoke about some work that he has contributed to in the last few years, which is the literature called the value of statistical life, which is designed to try to quantify the money-risk trade-off that individuals face. Sometimes people ask questions such as, How much are you willing to pay in order to avoid a 1 in 10,000 increase in the probability of a fatal injury on the job? That is a classic example of the value of statistical life. It suggests that in thinking about risks and what people face and thinking about thresholds and prospective medical care risks, employment status might be a key demographic variable for breaking out the population, because individuals face substantially different risks of on-the-job injury and fatality, depending on their industry and occupation. The Bureau of Labor Statistics collects these data, the Census of Fatal Occupations in Industries. It is broken down by detailed industry and occupation. It could be easily merged into a data set like the CPS, which also collects industry and occupation.

One of the challenges in thinking about the number of thresholds is to know the optimal number one wants to construct for a medical care index. So if one breaks down by employment versus nonemployment and chronic condition versus no chronic condition, guidance is needed, especially for three or more chronic conditions. Perhaps three or more chronic conditions could be an important criterion on which to split. In the context of Claxton’s presentation, he said, firm size seems to be potentially important in terms of demographic groups. However, the CPS does not collect data on chronic conditions.

FLOOR DISCUSSION AND COMMENTS

Participants expressed their views on the various issues flowing from the presentations.

Collins commented that Ziliak’s suggestion of using a 7.5 percent threshold is a good compromise, but one concern might be whether or not it would become an accepted threshold for policy makers, or whether it



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