CPI: Medical Prices Continue Upward March
The 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.
(See Table I Below the fold).
John, how much of our weak rise in GDP is attributable to healthcare inflation? We cheer when the GDP rises, but are quite upset when healthcare costs rise.
That is the point of my writing about the health element of all economic releases. It is chewing up more of our output.
Thank you for that. The point I was trying to get at is that we use GDP as a metric for the health and wellbeing of the nation, but if the rise in GDP is due to undesireable expenses then that rise (such as health care) represents potential danger.
Our GDP hasn’t yet seen a 3% rise under Obama and a good portion of the rise (I wonder what that number is) is due to inefficient healthcare spending.
Martin Armstrong posted today:
The healthcare industry is pricing itself out of business. It is now a $3 trillion industry that has infiltrated government to ensure they get their pound of flesh. Under current estimated, this will reach $5 trillion by 2022. There is nothing restraining the rising cost now under Obamacare.
Once again, the office of Inspector General has come up with a huge hole in the Department of Defense with a missing $6.5 trillion. The day before 911, Rumsfeld admitted there was back then $2.3 trillion missing from the Defense Department budget. That has now grown to $6.5 trillion and counting.
https://www.armstrongeconomics.com/world-news/taxes/defense-department-missing-6-5-trillion-up-from-2-3-trillion-in-2001/