CPI: Deflation Except In Health Care (Again)

By Filed under Health Care Costs on October 15, 2015 with 1 comment

I admitBLS this is getting a little repetitive, but it is not my fault the Bureau of Labor Statistics (BLS) releases the Consumer Price Index one day after the Producer Price Index. The CPI confirms (once again) the price behavior indicated by yesterday’s PPI.

While consumer prices were down 0.2 percent, month on month, and flat year on year, medical prices increased 0.2 percent and 2.5 percent (Table I). However, prescription drugs experienced quite moderate price increases last month. This means that while prices of medical goods and services overall increased, month on month, there was no sticker shock versus the CPI. Unfortunately, yesterday’s PPI suggests that price increases are flowing through the system again, and we can expect to see a pick-up in health prices versus overall inflation, in future CPIs.

20151015 CPI

 

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  1. Devon Herrick says:
    October 16, 2015 at 9:42 am

    Historically, the CPI — Medical Care has risen at rates that are more than double the rate for CPI — All Urban Consumers.

    Medical inflation has lessened in the past few years due to the recession and (hopefully) increased cost-sharing. It remains to be seen if medical inflation picks up again and increases at twice the rate of consumer inflation.