Tag: "inflation"

Health Prices Up Two Thirds Less Than CPI

blsThe Consumer Price Index rose 0.6 percent in December, while medical prices rose only 0.2 percent. This is the fifth month in a row we have enjoyed medical price relief in the CPI. Even prices of prescription drugs rose by only 0.3 percent. Prices of three components – medical equipment and supplies, dental services, and care of invalids and elderly at home even dropped. No category rose more than 0.1 percentage point more than all item CPI. Medical price inflation contributed only three percent of CPI for all items.

Over the last 12 months, however, medical prices have increased much more than non-medical prices: 3.9 percent versus 2.4 percent. Price changes for medical care contributed 13 percent of the overall increase in CPI.

See Figure I and Table I below the fold:

CPI: Moderate Health Price Increases

blsThe Consumer Price Index rose 0.3 percent in December. Medical prices rose only 0.2 percent. This is the fourth month in a row we have enjoyed medical price relief. Even prices of prescription drugs rose by only 0.2 percent. Prices of health insurance even dropped a smidgeon!

Prices for medical care commodities rose the most, by 0.6 percent, followed closely hospital services (0.3) percent).

Over the last 12 months, however, medical prices have increased over twice as fast as non-medical prices: 1.9 percent versus 4.1 percent. Price changes for medical care contributed 16 percent of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is has been low until recently, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

CPI: Dramatic Drop In Prescription Drug Prices

blsThe Consumer Price Index rose 0.2 percent in November. Remarkably, medical prices were flat overall. This is the third month in a row we have enjoyed medical price relief. Prices of prescription drugs dropped by 0.6 percent. Even the prices of health insurance and hospitalization dropped a smidgeon!

Prices for physician services rose the most, by 0.6 percent, followed closely by other medical professionals (0.5 percent).

Over the last 12 months, however, medical prices have increased 2.7 times faster than non-medical prices: 1.5 percent versus 4.0 percent. Price changes for medical care contributed 20 percent (one fifth) of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is has been low until recently, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

CPI: Flat Medical Prices Lower Than Inflation

blsThe Consumer Price Index rose 0.4 percent in October. Remarkably, medical prices were flat overall. This is the second month in a row we have enjoyed medical price relief. Even prescription drugs rose by only 0.2 percent, half the rate of headline CPI, while prices of non-prescription drugs dropped significantly. Even the price of health insurance dropped a smidgeon!

Prices for inpatient hospital services rose the most, by 0.6 percent. As noted in my discussion of the Producer Price Index, this bears closer watching as President-elect Trump promises more spending on infrastructure, including hospitals.

Over the last 12 months, however, medical prices have increased three times faster than non-medical prices: 1.4 percent versus 4.3 percent. Price changes for medical care contributed 22 percent of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is has been low until recently, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

CPI: Medical Care Prices Rose Less Than Non-Medical Prices in September

BLSThe Consumer Price Index rose 0.3 percent in September. Remarkably, medical prices rose a smidgen less, at 0.2 percent. This is a big breather from August, when increases in medical prices were dramatic. Nevertheless, both prescription and non-prescription drugs increased prices by 0.8 percent. Prices for medical equipment and supplies dropped by almost as much, shrinking 0.7 percent.

Over the last 12 months, however, medical prices have increased four times faster than non-medical prices: 1.2 percent versus 4.9 percent. Price changes for medical care comprise 27 percent of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is flat, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers are seeing no relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

CPI: Medical Care Prices Rose 10 Times More Than Non-Medical Prices in August

BLSThe Consumer Price Index rose 0.2 percent in August. Medical prices, however, continued their upward march, increasing by one full percent – 10 times more than non-medical consumer goods and services. If prices for medical care had been flat, the CPI would have risen by just 0.1 percent. Hospital services, prescription drugs, and health insurance stand out even within medical care. Price increases for medical care have contributed 42 percent of the overall CPI increase.

Over the last twelve months, prices for medical care have increased seven times faster than prices for non-medical items in the CPI. Price increases for medical care have contributed 36 percent of the overall CPI increase.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is flat, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers are seeing no relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold):

PPI: Health Prices Up Among Zero Overall Inflation

BLSAs with July’s Producer Price Index, health price inflation is no longer eye-popping, but still higher than overall PPI, which was flat in August. Hospital outpatient care stands out, with prices having risen 1.1 percent, monthly. Other price increases were moderate, but only prices of X-Ray machines and electromedical equipment declined.

This is also true over the last twelve months. Pharmaceutical prices especially stand out, even though they have risen moderately for a few months. It will take a while for the trend of high prices hikes from a few months ago to break down. Nursing homes, for which prices rose 3.0 percent, might replace drug makers as the whipping boy for high health prices, but they have a long way to go.

(See Table I below the fold.)

CPI: Medical Prices Continue Upward March

BLSThe Consumer Price Index for July was flat. Medical prices, however, continued their upward march, increasing by one half of one percentage point. If prices for medical care had been flat, the CPI would have declined by 0.1 percent. Prescription drugs, physicians’ and other medical professionals’ services, and health insurance stand out even within medical care.

Over the last twelve months, prices for medical care have increased almost seven times faster than prices for non-medical items in the CPI. Price increases for medical care have contributed 40 percent of the overall CPI increase.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is flat, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. Consumers are seeing no relief from high medical prices.

PPI: Health Price Inflation Low, But Not Low Enough

BLSThis morning’s Producer Price Index came in unexpectedly low, decreasing 0.4 percent versus an expected slight increase of 0.1 percent. Except for nursing home care, which increased 0.9 percent, producer prices for medical goods and services decreased or increased very modestly. Of 15 medical goods and services measured in the PPI, four actually experienced price decreases over the month. This number includes pharmaceutical preparations. However, because overall PPI actually deflated significantly, all medical prices increased at a faster rate than the overall PPI.

Over the last twelve months, prices for all but one medical category (medical lab and diagnostic imaging services) have increased faster than overall PPI. At 6.3 percent (versus just 0.3 percent for final demand), producer prices for pharmaceutical preparations stand out. However, the monthly PPI suggests this trend might be breaking down. Nursing homes, for which producer prices increased 2.5 percent might replace drug makers as a target of politicians’ campaigns against health costs, but they have a long way to go.

(See Table I below the fold.)

CPI: Medical Prices Resume Upward March

BLSDue to vacation, I did not discuss June’s release of the Consumer Price Index for May, in which medical care prices were very moderate. This continued that which was observed in May (for the April CPI).

Unfortunately, prices for medical care resumed their upward march in the June CPI, released today. At 0.4 percent, prices for medical care increased twice as fast as the CPI for all items. Price changes for medical care contributed 16 percent of the price change for all items. Prescription drug prices, especially, resumed their increase. Prices for medical care services, on the other hand, were in line with the CPI for all items.

Over the last twelve months, prices for medical care have increased over four times faster than prices for all items other than medical care. Medical care price increases have contributed almost one third (29 percent) to the price increase of one percent for all items. Claims that consumers have experienced relief from medical prices are simply not grounded in data.

(See Table I below the fold.)