July Healthcare Prices Remain Low
Aug. 20—Healthcare price increases remain near a 23-year low, with hospital prices leading the recent slowdown, according to new estimates from the Altarum Institute.
Altarum's July healthcare price index rose 1.1 percent from July 2012, which was only slightly higher than the May 1.0 percent increase and the lowest increase since Altarum began tracking healthcare price growth in 1990.
The index's 1.6 percent 12-month moving average is a new low in Altarum’s measurement of healthcare inflation and the latest in a steady decline from a 3.3 percent rate in October 2009.
The healthcare price growth "remains low due to lower hospital price growth (at 1.7 percent year-over-year), complemented by 0.3 percent price growth for physicians, historically low growth for prescription drugs (-0.1 percent), and continued low readings for all other categories save dental care at 3.9 percent (its highest rate since November 2008)," the report stated.
A "worrisome" trend Altarum identified was much slower hospital price growth in Medicare and Medicaid than among "other" payers, which includes private payers. In July, annualized hospital prices for Medicare and Medicaid patients fell at a -0.2 percent rate and a -1.1 percent rate, while hospital prices for other types of patients increased 4.6 percent."
The large private/public differential is worrisome and may reflect pricing power generated by consolidation," according to the report.
Publication Date: Tuesday, August 20, 2013