Continued acceleration in medical care inflation
May 23, 2002
For the fourth year in a row, the rate of medical care inflation was higher than in the preceding year. The consumer price index for medical care rose 4.7 percent in 2001, the highest calendar-year increase since 1994.
Higher price increases for inpatient hospital services and for prescription drugs offset lower price increases for services by physicians, dentists, outpatient hospitals, and nursing homes.
Hospital services charges increased 7.2 percent, following a 6.3-percent rise during the prior year. A main factor behind last year’s high increase in hospital services charges is higher labor costs for nurses. Increases in nursing charges have accelerated in recent years due to a growing shortage of nurses. Additionally, restrictions of allowable charges and reductions in some Medicare and Medicaid reimbursements have led many hospitals to attempt to compensate by increasing fees to private-pay patients.
The index for prescription drugs and medical supplies increased 6.0 percent in 2001, compared with 3.6 percent in 2000. In recent years, there has been a large increase in demand for prescription drugs, in part due to increased advertising aimed directly to consumers by pharmaceutical companies.
These data are produced by the BLS Consumer Price Index program. Annual percent changes are December-to-December changes. Details on the calculation of the medical care CPI are in Measuring Price Change for Medical Care in the CPI. For additional information on consumer price changes in 2001, see "Consumer inflation lower in 2001: energy and apparel prices declined," by Todd Wilson, Monthly Labor Review, March 2002.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Continued acceleration in medical care inflation on the Internet at http://www.bls.gov/opub/ted/2002/may/wk3/art04.htm (visited May 03, 2016).
Recent editions of Spotlight on Statistics
Employment and Wages in Healthcare Occupations
Healthcare occupations are a significant percentage of U.S. employment. Some of the largest and highest paying occupations are in healthcare. This Spotlight examines employment and wages for healthcare occupations.
Fifty years of looking at changes in peoples lives
Longitudinal surveys help us understand long-term changes, such as how events that happened when a person was in high school affect labor market success as an adult.
- A look at pay at the top, the bottom, and in between
The Spotlight examines how earnings and wages have changed over time and how they differ within a geographic area, industry, or occupation.