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.)


Comments (6)

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  1. Ron Greiner says:

    Why are Obamacare premiums exploding from coast to coast?

    ==The sticker shock of double-digit Obamacare rate hikes has left many New Yorkers reeling, worried whether increased health-care bills will put them in the poor house.

    The state has approved rate increases of up to 28 percent for United Health individual policies next year, part of a rate hike averaging 16.6 percent for the 17 companies offering Obamacare coverage in New York.==


    16.6% is itty bitty – Blue Cross of Texas wants 60% increase on their low-quality HMO with skimpy provider networks, the only product available now.

    Did Hillary mention Obamacare in her Economic speech yesterday?

    Obamacare is killing the economy but the media is riding shotgun for her.

  2. charlie Bond says:

    Hi John:
    Not to sound like a One-Note-Johnny, but are any of these “prices” in health care directly related to the cost of producing the goods or services?
    Of course not.
    And that is the root cause of our current health care crisis.
    Charlie Bond

  3. Ron Greiner says:

    Hillary just released her tax returns and $1 million went to her charity, the Clinton Foundation, ha ha.

    So Hillary is deducting the money that goes to Bill, her daughter and Donna Shalala. Some kind of charity right?

    Did you see the cut on Bernie Sanders face when he said, “Stop, lets all select Hillary!” at the DNC? It looks like the Clinton people paid him a visit.

    Look at Bernie’s face:


    • Perry says:

      I find it intersting that Hillary would like doctors to make less annually than what she gets paid for a speaking engagement.

      • Allan says:

        Perry, Hillary is treasoness, a liar and a theif. Why would you expect anymore from her?🙁.