CPI: Medical Prices Rose Three Times Faster Than Other Prices; Hospitals Stand Out

BLSOctober’s Consumer Price Index (CPI) confirms medical prices continue to spring ahead of prices for other goods and services. Overall CPI increased 0.2 percent on the month and also 0.2 percent, year on year. Medical prices, on the other hand, increased 0.7 percent on the month and 3.0 percent, year on year (Table I).

20151117 CPI

To be sure, much of the very tame CPI over the last twelve months is due to the decline in energy prices. Nevertheless, the CPI for all items less food and energy rose just 1.9 percent, significantly less than medical care’s 3.0 percent. If it were not for health care, CPI would be deflating, both during October and for the last twelve months.

While prices of prescription drugs have increased a lot over the last twelve months, the fastest growing prices are for hospitalization: 5.3 percent. This suggests the current political outcry over prescription prices, while understandable, might not be addressing the correct target.

Comments (4)

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  1. Ron Greiner says:

    I find it hard to believe medical costs are increasing.

  2. Ron Greiner says:

    John, yesterday I talked to an old MSA client that I enrolled on 6/11/2001 and her two children cost $25 combined back then. Pasco School’s is charging $1,168 a month for 2 children to be added on today. The son was 6-years-old then and at 9 he had a brain aneurysm and has been in a wheelchair since. She called because his insurance is ending and her best doc lives in Minn and all plans in IOWA on the exchange are HMOs. So she is scared.

    WOW, as I was writing this an old MSA from Feb. 1997 called from Chicago at the 7-11 stores. I told you we had the 7-11 account in January 1997 the 1st month of MSAs. These old MSAs are calling because TIME Insurance is TERMINATING operations.