Overall healthcare prices continue to creep along, and hospital prices are creeping right behind them. But spending continues to rise at a healthy rate.
New data from the Altarum Institute shows overall prices grew by just 1.1 percent in May 2015 compared to May a year ago. Hospital prices grew by 0.7 percent during that same period and were essentially flat for both Medicare and Medicaid patients.
But growth in drug prices have dwarfed every other area of the sector. It was up 5.3 percent this May compared to May 2014. Nursing home care and dental care were the other areas that topped 2 percent year-over-year growth.
However, spending rose relatively dramatically. Overall healthcare spending was up 5.9 percent in May 2015 compared to a year ago. Hospital spending in May was at more than a 7 percent annualized clip. By comparison, it was growing at less than a 5 percent annual rate in May 2014.
But those rates have actually cooled down since the spring. For the second straight month, health spending growth moderated from a year-over-year growth rate of 6.8 percent in March. And hospital spending dipped even further, from a 9 percent annual growth rate in March.
Those numbers jibed with a forecast Altarum issued earlier this year, in which it projected the spending trend would cool down. Although spending was ratcheted down by the Great Recession, a 2013 study by the Kaiser Family Foundation predicted it would rebound.
As with pricing, spending on drugs is currently the growth leader, with an annual growth rate of more than 9 percent in May, although that has moderated from the nearly 12 percent annual growth rate occurring in May 2014.