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Healthcare Business News
 


Hospital prices grow at slowest rate since 1999


By Melanie Evans
Posted: January 16, 2014 - 12:00 pm ET
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Hospital service prices in 2013 grew at the slowest rate since 1999, the Bureau of Labor Statistics reported Thursday. Prices increased 4.7% compared with an average of 6.2% per year during the past 15 years.

The hospital Consumer Price Index for 2013, which reflects the prices paid by commercial insurers, has declined steadily for the past four years. Its growth nonetheless easily outpaced the rate of overall inflation, as reflected by the consumer price index for all goods, which rose 1.5% last year.

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Price growth for inpatient care also was below-average, with a 2013 increase of 4.4% compared with average annual growth of 6.1%. Last year's more moderate price growth also was the weakest seen since 1999.

Outpatient consumer prices trailed the annual average of 7% with growth of 4.8%, the weakest increase since 2005.

For the final month of the year, the consumer prices for hospital care increased 0.5% after a drop of 0.4% the prior month. December's consumer price gains were slightly lower than the one-month jump in December 2012 of 0.7%.

Inpatient hospital prices did more to drive last month's growth than outpatient inflation. Consumer prices for inpatient care increased 0.6%; outpatient prices grew 0.3%.

Monthly changes in hospital prices are seasonally adjusted; the annual change is not, because it captures an entire calendar year.

Federal estimates for healthcare inflation for last year are not yet available, but rising prices were not as significant a factor in 2012 health spending growth as they were the prior year. In 2012, healthcare inflation accounted for about half of the 3% overall growth in per capita health spending, in part thanks to Medicare cuts to payment for doctors. In 2011, healthcare inflation was responsible for about 80% of the 2.9% per capita growth in U.S. health spending.

The CMS, which produces the estimates, relies on a broader measure of prices for its estimates known as the Producer Price Index. That alternative measure of inflation reported a slowdown last year in hospital and physician prices. Hospital prices grew 2% last year compared with 2.6% the year before. Physician prices grew at the slowest rate in more than a decade , with an increase of 0.3% for the year.

Follow Melanie Evans on Twitter: @MHmevans


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