Medical Inflation Outpaces Overall Inflation in the U.S.
In recent years, the cost of living in the United States has been on the rise. Consumer goods and services prices have increased by more than 80% since 2000, but medical prices have surged by nearly 115% over the same period, according to Health System Tracker.
The High Cost of U.S. Healthcare
It’s no secret that healthcare in the United States is one of the most expensive in the world. However, there is some good news. The Bureau of Labor Statistics (BLS) released data in October 2023 that shows consumer goods and services prices rose 6% from February 2022 to February 2023, while the cost of medical services grew only 2.1% during the same period.
Decrease in Health Insurance Costs
Health insurance costs have fallen by 3% to 4% per month since September 2022, according to BLS data. This decline correlates with a decrease in insurers’ profits, as people started using health services again after the pandemic. In 2020, medical practices were largely closed, but insurers still collected premiums.
Inflation Influenced by Major Events
Inflation in 2023 has been impacted by significant events like the COVID-19 pandemic and geopolitical conflicts. These factors have played a significant role in driving overall inflation rates.
Analyzing Healthcare Costs
Vivian Health has conducted a comprehensive analysis of healthcare costs using data from the BLS, news coverage, and research studies. Their study examines year-over-year healthcare cost trends and highlights the differences in healthcare inflation compared to other consumer goods and services.
Understanding Inflation Measurement Challenges
Measuring inflation can be complex, particularly in healthcare. The supply chain disruptions during the pandemic, such as semiconductor shortages, affected various industries, including car manufacturing. These disruptions led to increased demand for certain goods and services, impacting overall inflation rates.
Healthcare Inflation vs. Market Fluctuations
While recent market fluctuations have slowed price increases for gasoline and cars, healthcare inflation rates tend to remain elevated and continue to rise gradually. According to HealthView Services CEO Ron Mastrogiovanni, this trend is expected to persist.
Health Insurance Costs on the Rise Again
Health insurance costs have started to rise again, increasing by 1% each month since October 2023, as reported by CNBC. Mark Zandi, Chief Economist at Moody’s Analytics, predicts a rebound in health insurance costs.
Measuring Inflation Methodology
Measuring inflation can vary depending on the methodology used. The Consumer Price Index (CPI) provides a snapshot of price changes for consumers. In the case of health insurance, the BLS measures inflation based on insurers’ profits rather than considering the varying benefits and risk factors across policies. Additionally, Medicaid and workers’ compensation payments are not factored into the CPI since they do not require out-of-pocket payments from consumers.
Different Approaches to Inflation Measurement
Measuring inflation for other expenses, like those included in the Personal Consumption Expenditures price index, is more straightforward. It involves analyzing the amounts paid by consumers, employers, and the government for specific goods and services.
Read More of this Story at www.jacksonprogress-argus.com – 2023-11-30 22:01:24
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