Healthcare Prices All But Frozen
Price inflation was once considered the bane of healthcare delivery, but data generated in recent months by the Michigan-based Altarum Institute has begun to explode that myth.
Healthcare prices grew by just 1.1% last month when compared to July 2012, a rate of inflation even slower than the economy as a whole. The overall moving average for the past year has been 1.6% – the lowest Altarum officials have reported since they began tracking nearly a quarter of a century ago.
“Our indicators show near record low price growth, continued restrained national health spending, and new health employment data at long last reflecting the health expenditure slowdown,” sad Ani Turner, deputy director for Altarum's Center for Sustainable Health Spending.
The overall consumer price index for medical expenditures rose just 1.9%, lower than the overall CPI of 2%. Personal healthcare spending was at 3.9% for July, reflecting the continued cost-shifting by insurers and providers.
There was little variation among prices in specific categories of healthcare inventories. Hospital prices rose 1.6% in July, compared to the 2.8% they rose in July 2012. Nursing home care prices rose a little more than 1%. Physician services inched up 0.3%. Home healthcare services actually declined slightly.
Altarum officials did not believe the trend would reverse itself anytime in the near-term. It noted depressed reimbursement increases from public payers such as Medicare and Medicaid.
“There are some signs that economic growth is accelerating from its disappointing trend, but weak growth continues to exert downward pressure on overall prices, and dramatically so for healthcare prices,” Altarum's report noted.
Meanwhile, healthcare expenditures nationwide increased 2.9% in June, down from the 12-month trend of 4.3%. Healthcare currently represents 17.5% of the gross domestic product, down from 17.6% in May of this year but essentially unchanged from two years ago. The GDP annual growth rate is around 3.4%, down from 5.1% in June of 2012, but up from the 2.7% reported last May.
