While overall inflation fell by nearly half last year, medical inflation was much more resistant to change.
Consumer prices for medical goods and services rose 2.8% last year, down slightly from 1996's medical inflation rate of 3%, the U.S. Labor Department reported last week.
By comparison, the overall inflation rate, known as the Consumer Price Index, fell to just 1.7% last year from 3.3% in 1996. Last year's inflation rate was the lowest since 1986's CPI of 1.1%.
Consumer prices for hospital services specifically also rose at a higher rate than general inflation last year, although hospital prices rose at a much slower rate than in 1996.
Prices for hospital services rose 3.2% in 1997 compared with 4.1% in 1996, the government said.
The 4.1% increase in consumer prices for hospital care translated into a record $21.3 billion in profits for hospitals in 1996 (See story, this page).
Prices for physician services, meanwhile, rose 2.7% last year compared with 3% in 1996.