Retail and wholesale price data released earlier this month by the U.S. Bureau of Labor Statistics show the nations current economic woes are having an effect on how much physicians and hospitals charge and collect for their services.
Retail prices charged by physicians rose just 2.9% last year compared with 4.1% in 2007, according to the Consumer Price Index. Wholesale prices for physician services, meanwhile, were up just 1.2% last year compared with 4% in 2007, according to the Producer Price Index.
Hospitals experienced a similar lower rate of increase. Hospital retail prices were up 5.9% in 2008 compared with 8.3% a year earlier. Wholesale prices for hospital services, meanwhile, were up 1.5% last year, down from a 3.8% increase in 2007.
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, Bazzoli says. 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.
One economist says 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, says 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 says. We wont know whether the PPI reductions translate into real reduction in reimbursement until we get numbers from the American Hospital Association, Getzen says. 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.To submit a letter to the Modern Physician Reader Blog, click here. Please include your name, title, company and hometown. Modern Physician reserves the right to edit all submissions.