Tag Archives: PPI

Health Care Costs

Producer Price Index: Pharma, Biologics Jump

The Producer Price Index (PPI) for June increased more than expected, as the effect of the drop in oil prices abated. As shown in Table I, producer price growth for health goods and services was in line with tame growth in overall PPI, which grew 0.4 percent on the month and dropped 0.7 percent on the year to June.

The exceptions were pharmaceutical preparations, which increased 2.5 percent on the month and are up 10.3 percent on the year; and biologic products (including diagnostics), which increased 3.1 percent month on month and 3.2 percent year on year. Continue reading Producer Price Index: Pharma, Biologics Jump →

Health Care Costs

Producer Prices: Health Goods & Services Lag

Last Friday’s Producer Price Index showed a jump from April to May of 0.5 percent (seasonally adjusted). When I last looked at the PPI, it looked like prices of health goods and services were outpacing other producer prices.

The latest data show them lagging (see Table 1). Although, looking at year-on-year data, pharmaceutical products, hospitals, and nursing homes have had relatively high price increases. Price inflation for health insurance has been moderate, according to the PPI. Continue reading Producer Prices: Health Goods & Services Lag →

Health Care Costs

Health Goods Prices Rise; Other Prices Fall

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Last Friday’s release of the Producer Price Index  for February confirms that prices for health goods and services are rising at a much higher rate than other producer prices, most of which are declining significantly.

As shown in Table 1, prices of goods for final demand actually dropped 4.2 percent over the last twelve months. However, prices of pharmaceutical preparations increased by 7.1 percent; and prices of medical, surgical, and personal-aid devices also crept up.

20150313 PPI

Prices for intermediate goods tell a similar story, with prices for medicinal, botanical, and biological chemicals experiencing higher price growth than other processed chemicals.

Prices for services sends a much less clear signal, being distributed around an increase of 1.2 percent for all demand services. (Health insurance is categorized as both a final and intermediate services, as it is sold both retail and wholesale.)

Prices of services are more important than prices of goods in determining overall health price inflation. Nevertheless, there is no evidence that Obamacare is holding down prices of health services.

(The Altarum Institute has also released its updates of health spending and prices, which show strong growth in health spending of 5 percent in 2014 and high relative price inflation.)

Health Care Costs

Prices for Health Goods Rallying

As the economy slowly crawls its way back towards growth, inflation is well under control. However, healthcare inflation is rearing its head. Table 1 presents data from the February release of the Producer Price Index.

Over the last twelve months through January, producer prices increased by zilch, and actually decreased since last December. Prices of goods for final demand actually dropped 3.7 percent over the year. Pharmaceutical preparations, however, increased by 7.3 percent, and other healthcare goods also had higher inflation than other goods for final demand (which, I hate to state, also weakens the argument that the medical-device excise tax is having as negative an effect as the industry claims).20150219 PPI

 

Continue reading Prices for Health Goods Rallying →