Just as a follow-up to my post yesterday, here is a Zero Hedge post from today which makes the same point about how confusing, if not incomprehensible, the Bureau of Labor Statistics calculation of health care inflation is. The author notes discrepancies between the BLS number and other sources, in particular the Kaiser Family Foundation survey, which I am getting to in a more detailed post. Note that BLS’ excuse for not using health insurance premiums is that it can’t track changes in “quality”, i.e., the nature of the benefits provided, so it can’t adjust price for value. This is bullshit, pure and simple. From year-to-year, health benefits change very little. The KFF survey itself would show changes in cost-sharing amounts. There is no reason for BLS to not use the actual change in premiums, other than trying to minimize inflation. (ZH Post)
The government has required hospitals and health plans to provide actual prices paid information to the public. This is another source BLS could use to track changes in the actual costs of medical services. They don’t use it, again, likely because it would make inflation look worse. And for those of you interested in perusing yet another example of government obfuscation, here is the official BLS explanation of how they calculate health care and health care insurance inflation, ignoring the real cost impact on consumers, partly by pretending that when employers pay a lot more for health benefits it doesn’t effect consumers. (BLS Sheet)
