Tag Archives: PPI

Health Care Costs

PPI: Health Prices Mixed, Inflation Low

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BLSFebruary’s Producer Price Index rose 0.3 percent. However, prices for many health goods and services grew slowly, if at all. Nine of the 16 price indices for health goods and services grew slower than their benchmarks.* Prices for medical lab and diagnostic imaging actually deflated in absolute terms.

Even  pharmaceutical preparations for final demand, for which prices increased most relative to their benchmark, increased by just 0.4 percent. Although 0.3 percentage points higher than the price change for final demand goods less food and energy (0.1 percent), this is still tame relative to the trend of pharmaceutical prices. Among services for final demand, only price for health insurance and nursing homes rose higher than their benchmark.

With respect to diagnosing whether health prices are under control, the February PPI is about as mixed as January’s was.

See Table I below the fold: Continue reading PPI: Health Prices Mixed, Inflation Low →

Health Care Costs

PPI: Health Prices Mixed Amidst Inflation

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blsJanuary’s Producer Price Index rose 0.6 percent. However, prices for many health goods and services grew slowly, if at all. Nine of the 16 price indices for health goods and services grew slower than their benchmarks.* Prices for six of the categories of health goods and services deflated in absolute terms.

The outlier was pharmaceutical preparations for final demand, which increased by 1.1 percent (0.7 percentage points more than final demand services (less trade, transportation, and warehousing.) The largest decline (relative to its benchmark) was for prices of health and medical insurance for intermediate demand, which declined by 0.8 percentage points versus services for intermediate demand (less trade, transportation, and warehousing).

With respect to diagnosing whether health prices are under control, the January PPI is more mixed than December’s was. Nevertheless, although pharmaceutical prices stand out, most excess inflation is in health services, not goods.

See Table I below the fold: Continue reading PPI: Health Prices Mixed Amidst Inflation →

Health Care Costs

PPI: Pharma Prices Are Dropping!

BLSDecember’s Producer Price Index rose 0.3 percent. However, prices for most health goods and services grew slowly, if at all. Fifteen of the 16 price indices for health goods and services grew slower than their benchmarks.*

The outlier was health and medical insurance for final demand, which increased by 0.2 percent, the same rate as final demand services (less trade, transportation, and warehousing.) The largest decline (relative to its benchmark) was for prices of new health care building construction, which declined twice as fast as prices of overall building construction did.

Prices of hospital outpatient care and nursing home care declined versus their final demand services (less trade, transportation, and warehousing) and also absolutely. Pharmaceutical prices decreased 0.1 percent, a 0.4 percent drop versus the price increase for final demand goods less food and energy.

See Table I below the fold: Continue reading PPI: Pharma Prices Are Dropping! →

Health Care Costs

PPI: Most Health Prices Tame, Inflation Picks Up

blsNovember’s Producer Price Index rose 0.4 percent. However, prices for most health goods and services grew slowly, if at all. Nine of the 16 price indices for health goods and services grew slower than their benchmarks.*

The major exceptions were prices for pharmaceutical preparations, which increased 0.4 percentage points more than prices for final demand goods less food and energy; and nursing homes, for which prices increased 0.3 percentage points more than prices for final demand services less trade, transportation, and warehousing.

Prices of health goods for intermediate demand, were lower than their benchmark. Perhaps slow price increases for medicinal and botanical chemicals, and biological products will flow through to prices of pharmaceutical preparations but that has not previously been the case.

Over the last twelve months, prices of nine of the 16 health goods and services have increased slower than their benchmarks. Three stand out as having increased significantly more than their benchmarks: Pharmaceutical preparations (7.0 percentage points), biological products (1.8 percentage points), and dental care (1.7 percentage points).**

(See Table I below the fold.) Continue reading PPI: Most Health Prices Tame, Inflation Picks Up →

Health Care Costs

PPI: Health Prices Tame, Inflation Flat

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BLSOctober’s Producer Price Index was flat. However, prices for most health goods and services grew slowly, if at all. Seven of the 15 price indices for health goods and services declined. The major exception was prices for dental care, which increased 1.5 percent. Dental care is dominated neither by government nor private insurance, so dental price increases are not explained by NCPA’s usual theory of health inflation. I addressed dental price increases in a previous article.

Prices of pharmaceutical preparations for final demand increased 0.4 percent, but that was in line with all goods for final demand. Prices for construction of both health facilities and other buildings increased 0.7 percent. This bears closer watching as President-elect Trump promises more spending on infrastructure, including hospitals.

Prices of health goods for intermediate demand, especially medicinal and botanical chemicals, and biological products, actually dropped. Perhaps this will flow through to prices of pharmaceutical products but that has not previously been the case.

Over the last twelve months, prices of health goods and services have increased faster than overall PPI, which grew 0.8 percent. The tables are turned: 12 of 15 health categories experienced larger price increases than PPI did. Pharmaceutical preparations continue to stand out dramatically, having grown 8.4 percent.

(See Table I below the fold.) Continue reading PPI: Health Prices Tame, Inflation Flat →

Health Care Costs

PPI: Health Prices (Except Pharmaceuticals) Stay Tame As Other Prices Rise

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BLSSeptember’s Producer Price Index rose 0.3 percent, a significant pick up. However, prices for most health goods and services grew slowly, if at all. Eleven of the 15 prices for health goods and services reported grew slower than the headline PPI. The major exception was prices for pharmaceutical preparations, which increased 1.2 percent, resuming a trend which I had hoped was breaking down. Further, prices of medicinal and botanical chemicals dropped 0.7 percent. So, price increases for pharmaceutical preparations are not coming from the ingredients.

However, over the last twelve months, prices of health goods and services have increased faster than overall PPI, which grew 0.7 percent. The tables are turned: 11 of 15 health categories experienced larger price increases than PPI did. Pharmaceutical preparations continue to stand out dramatically, having grown 8.1 percent. Nursing homes, for which prices rose 2.4 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.) Continue reading PPI: Health Prices (Except Pharmaceuticals) Stay Tame As Other Prices Rise →

Health Care Costs

PPI: Health Prices Up Among Zero Overall Inflation

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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.) Continue reading PPI: Health Prices Up Among Zero Overall Inflation →

Health Care Costs

PPI: Health Price Inflation Low, But Not Low Enough

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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.) Continue reading PPI: Health Price Inflation Low, But Not Low Enough →

Health Care Costs

PPI: Health Prices Remain Tame

BLSAlthough I did not discuss June’s release of the Producer Price Index (PPI) for May at this blog (due to vacation), prices of pharmaceutical preparations did not increase at all. Similarly, they remained flat in today’s PPI release for June.

Prices for final demand goods (less food and energy), and prices for all final demand health services were either flat or down in June. Similarly, price changes of health services for final demand were all lower than price changes for final demand services overall. The same was true for both goods and services for intermediate demand.

For the last 12 months, prices of health goods and services (especially pharmaceutical preparations) have increased significantly more than prices of other goods and services, but the trend of disproportionately high health price increases might be breaking down.

(See Table I below the fold.) Continue reading PPI: Health Prices Remain Tame →

Health Care Costs

PPI: Pharma Price Hikes Continue To Stand Out

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BLSThe Producer Price Index (PPI) for final demand goods grew 0.2 percent last month, or 0.3 percent less food and energy. Prices for pharmaceutical preparations and most medical devices grew significantly faster, at 1.0 percent and 0.5 percent, although prices for X-Ray and similar equipment were flat.

With respect to final demand services, for which prices rose 0.1 percent (or 0.3 percent, less trade, transportation, and warehousing), prices of medical services changed similarly. However, prices for health insurance jumped 0.8 percent.

With respect to goods for intermediate demand, which dropped 0.3 percent, price increases for biologics, including diagnostics, stood out at 2.5 percent. With respect to services for intermediate demand, which rose 0.1 percent, prices for health insurance jumped 0.8 percent

Looking back over the 12-month period, the price increase of 10.4 percent for pharmaceutical preparations continues to stand out like a sore thumb. Political agitation against drug prices is unlikely to go away soon. Health insurance, having risen 1.7 percent in a flat or negative inflationary environment, is also beginning to stand out. (See Table I below the fold.) Continue reading PPI: Pharma Price Hikes Continue To Stand Out →