The Altarum Institute issues regular briefs on health spending and health prices. The most recent ones go through May of this year. (Altarum Brief) (Altarum Brief II) Health price growth remains very subdued, with a one percent increase in May of 2013 over May of 2012. The 12 month moving average is 1.7%, the lowest since 1998. Hospital prices grew 1.8%, physician service prices were unchanged and drugs dropped one-tenth of a percent. The Medical CPI was 2.2%. All of this price news seems good, but when compared to general inflation, health prices are still rising significantly faster, which means for all affected, and particularly consumers, more of their money is going to health care. What is clear from the price report is that we are experiencing a welcome respite from high health care price growth, which may be due to general economic weakness, to the ability of governments to dictate prices and to consumers having some greater sensitivity to costs. Implied utilization growth is also relatively low, probably due to consumer restraint, and this lower demand is likely having an impact on prices. On the spending side, based on an analysis of national health expenditure data, May of 2013 saw 4.2% growth compared to May of 2012, about 1% higher than GDP growth in the same time period. On a cumulative basis, since the start of the recession in December 2007, health care spending has increased an aggregate of 13.5%, while cumulative GDP growth in that time has only been 2.9% Without health care, GDP growth over that period was less than 1%. In the past year, spending has grown in all categories, with home health showing the fastest growth at 7.2%. Hospital spending also shows relatively high growth with physician spending increases relatively muted. So the good news is that spending and price growth is restrained, but since economic growth is also very restrained and historically the two have been highly linked, if and when the economy experiences faster growth, we might expect health spending and prices to also increase more rapidly.
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
A lot of money is invested in health care startups and growth companies, since health care is 20% of the economy, but the returns aren’t always good. Here is another...
November 1, 2022
HealthJoy delights investors by garnering $60 million in mindless new capital to support its benefits navigation tool. Another sign of too much capital still floating around out there.
November 1, 2022
It may be investors that need the redesign. They just keep pouring money into this digital health crap despite all the losses. Redesign Health claims that it makes money by...
September 16, 2022
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace