Healthcare prices are rising at the lowest rate in nearly a quarter century, according to a new study by the Altarum Institute's Center for Sustainable Health Spending, and it may be the lowest rate of all times.
Healthcare prices rose only 1 percent in May 2013 compared to May 2012, the lowest rate since Altarum has been tracking price trends since 1990. The moving 12-month average growth is 1.7 percent, tied for the lowest moving rate, which was previously recorded in 1998, concluded Altarum.
Prices in the hospital sector experienced the highest increase in the healthcare category, rising 1.8 percent. Physician prices, durable home medical equipment and pharmaceutical prices all declined slightly or remained the same.
"Although July marks the beginning of the fifth year of the expansion following the Great Recession, weak growth continues to exert downward pressure on overall prices, and dramatically so for healthcare prices," the Altarum study states. "For the privately insured, out-of-pocket healthcare costs continue to rise; for the publicly insured, payment rates are held down by Sequestration and ongoing Affordable Care Act provisions. In this environment, healthcare prices cannot be expected to rise significantly in the near term."
Meanwhile, healthcare spending increased to $2.91 trillion in May, compared to $2.9 trillion in April, according to another Altarum study. Overall, spending has increased 13.5 percent since the start of the Great Recession in late 2007.
The healthcare sector as a whole added 19,800 jobs in June, down slightly from the 24-month average of 23,000 jobs per month, according to Altarum's labor study.
Economists have noted that healthcare has driven much of the recent job growth in the U.S. economy.
To learn more:
- read the Altarum Institute price study (.pdf)
- check out the Altarum Institute spending study (.pdf)
- here's the Altarum Institute jobs study (.pdf)