Healthcare prices appear poised to resume their troubling rise, but hospital prices aren't part of that trend, according to new data from the Altarum Institute.
Data compiled by Altarum's Center for Sustainable Health Spending indicated that overall spending by hospitals grew at a minuscule 0.9 percent between December 2013 and December 2014--the lowest increase in 16 years. That was the second-lowest pricing growth, with only physician services lower at an increase of 0.6 percent.
"Hospital price growth plays a dominant role in (healthcare prices) due to its large spending weight. However, it appears that drug, home health and other categories compensated for low hospital and physician growth," the report said.
Prescription drugs was the biggest price driver for the healthcare sector, increasing in price by 6.4 percent between December 2013 and December of last year. By comparison, the increase in home healthcare, at 1.9 percent, was relatively small.
Overall, healthcare pricing increased 1.8 percent from December 2013 to December 2014. Although that is relatively modest growth, healthcare expenditures overall have increased 15.5 percent since the start of the Great Recession in Decmber 2007, while prices in the overall U.S. economy have risen 10.6 percent. A recent report by the Congressional Budget Office forecasts that healthcare price growth will continue in the coming years at a fairly healthy clip. However, a forecast by another economist suggested such growth would be more moderate.
Healthcare spending presents a somewhat different picture, according to a separate Altarum report. Spending increased in the sector by 5 percent last year, according to Altarum. That's up from the lowest level ever recorded in 2013, when healthcare spending rose just 3.6 percent. In December 2014, overall healthcare spending was 5.6 percent higher than compared to December 2013, suggesting the trend would continue upward this year. Pharmaceuticals are again a big spending driver, with an increase of 13 percent from December 2013 to December 2014.
Hospital spending represented the largest chunk of overall expenditures, at 32 percent, and topped $1 trillion in 2014 for the first time ever. It rose 5.4 percent between December 2013 and December 2014, from $959.8 billion to $1.01 trillion.