Newly released preliminary data from the Bureau of Labor Statistics show the nations current economic woes are having an effect on healthcare spending.
Price growth slows
Hospitals payments rise only 1.5%, data show
Price growth slowed last year, according to two indexes that measure payments for healthcare goods and services.
Prices paid to doctors and hospitals for services rendered rose less last year compared with 2007, according to the latest Producer Price Index data. While hospitals experienced a 3.8% increase in prices in 2007, payment for those same goods and services rose just 1.5% during the 12 months ended December 2008.
The numbers show physicians offices also experienced economic pains over the past year. Payment to doctors offices was up 4% between December 2006 and 2007, but up only 1.2% during the 12 months ended December 2008.
Gloria Bazzoli, a health administration professor at Virginia Commonwealth University, believes the current numbers do accurately reflect a slowdown in spending in healthcare services. Ive seen reports from the American Hospital Association that suggest and show utilization is declining and not increasing the way we thought it would, she said. The number of uninsured that hospitals are having to deal with is increasing with rising unemployment, so this has to be a reflection of the economy. I dont know what else to blame the numbers on.
But while payments to hospitals and doctors may be down, consumers continue to pick up a bigger part of their healthcare bills and are paying more out of pocket for what services they do access, according to the most recent Consumer Price Index data.
Healthcare consumers overall out-of-pocket spending increased at a slower pace during 2008 than 2007. Consumers paid 5.9% more on hospital services for the 12 months ended 2008, compared with an 8.3% increase more the previous year. Likewise, physicians services cost patients 2.9% more for the 12 months ended December 2008, compared with an increase of 4.1% in the prior year-end period.
One economist said that the index results shouldnt be given too much weight. Though the BLS numbers suggest healthcare is not immune to the current recession, Tom Getzen, executive director of the International Health Economic Association and a professor of insurance and health management at Temple University, said that it may be difficult to take a clear snapshot of healthcares true economic status. The difficulty is in getting an actual transaction price for healthcare services, Getzen said. We wont know whether the PPI reductions translate into real reduction in reimbursement until we get numbers from the American Hospital Association, Getzen said. My belief is these numbers do represent a significant slowdown in provider revenue. But, I wont feel comfortable that they really do until we see audited financials from hospitals.
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