Literature DB >> 10158734

Health care indicators. Hospital, employment, and price indicators for the health care industry--third quarter 1995.

A L Sensenig1, S K Heffler, C S Donham.   

Abstract

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Year:  1996        PMID： 10158734      PMCID： PMC4193597     

Source DB:  PubMed          Journal:  Health Care Financ Rev        ISSN： 0195-8631


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Indicator data used to monitor trends in health care spending suggest that there has been little or no acceleration in personal health care spending through the third quarter of 1995, when compared with the same three quarters of 1994. Total patient revenue and hospital utilization both accelerated moderately in the first three quarters of 1995 compared with the same period in 1994. During that same period, inpatient prices decelerated while outpatient prices, including those paid by Medicare and other third-party payers, accelerated. After decelerating rapidly during the past few years, consumer prices for medical care services have moderated in recent quarters, following the recent trend of overall prices.

Introduction

This article presents statistics on health care utilization, prices, expenses, employment, and work hours, as well as on national economic activity. These statistics provide an early indication of changes occurring in the health care sector and within the general economy. We rely on indicators such as these to anticipate and predict changes in health care sector expenditures for the most recent year. Other indicators help to identify specific reasons (e.g., increases in price inflation or declines in utilization) for health care expenditure change. The first eight of the accompanying tables report selected quarterly statistics and the calendar year aggregations of quarterly information for the past 4 years. Unless specifically noted, changes in quarterly statistics are shown from the same period one year earlier. For quarterly information, this calculation permits analysis of data to focus on the direction and magnitude of changes, without interference introduced by seasonal fluctuations. The last four tables in the report show base weights, quarterly index levels, and four-quarter moving average percent changes in the Input Price Indexes maintained by HCFA.

Health Care Indicators for The Third Quarter of 1995

Medical Prices

While overall price growth has remained relatively steady during the last 16 quarters, the rapid deceleration in medical care prices between 1991-94 has moderated in recent quarters according to the Consumer Price Index (CPI). Medical care prices are now growing at roughly twice the rate as overall prices. As indicated in Table 6 and Figure 1, the CPI for all items less medical care has grown at rates between 2.2 - 3.0 percent since the fourth quarter of 1991. The growth in consumer prices for medical care declined from more than 8.0 percent to 4.4 percent during this same period. However, during the past 5 quarters medical price increases have remained in a relatively narrow range of 4.4 to 4.9 percent. This relatively constant growth rate is the result of steady increases in medical care service prices and slightly decelerating growth in medical care commodity prices.
Table 6

Selected National Economic Indicators: 1991-95

Type of Establishment and MeasureCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Gross Domestic Product
Billions of Dollars$5,917$6,244$6,550$6,931$5,950$6,002$6,122$6,201$6,272$6,383$6,443$6,503$6,571$6,684$6,773$6,885$6,988$7,080$7,148$7,197$7,297
Billions of 1992 Chain Weighted$6,079$6,244$6,384$6,604$6,089$6,104$6,175$6,214$6,261$6,327$6,327$6,354$6,390$6,464$6,505$6,582$6,640$6,691$6,702$6,709$6,763
Implicit Price Deflator (1992 = 100.0)97.3100.0102.6105.097.798.399.199.8100.2100.9101.8102.4102.8103.4104.1104.6105.2105.8106.7107.3107.9
Personal Income
Personal Income in Billions$4,968$5,264$5,479$5,750$4,979$5,059$5,161$5,236$5,233$5,426$5,347$5,461$5,499$5,610$5,562$5,743$5,802$5,894$5,996$6,062$6,132
Disposable Income in Billions$4,344$4,614$4,789$5,019$4,356$4,427$4,524$4,596$4,583$4,751$4,685$4,774$4,803$4,896$4,857$5,002$5,070$5,146$5,226$5,260$5,331
Prices1
Consumer Price Index, All Items136.2140.3144.5148.2136.7137.7138.7139.8140.9141.9143.1144.2144.8145.8146.7147.6148.9149.6150.9152.2152.9
 All Items Less Medical Care133.8137.5141.2144.7134.3135.1136.0137.0138.0138.9140.0141.0141.5142.4143.3144.1145.4146.0147.1148.4149.0
  Energy102.4103.0104.1104.6103.1101.899.3102.6105.8104.3102.7104.7105.4103.8101.7103.5107.8105.4103.7106.5107.2
  Food and Beverages136.8138.7141.6144.9136.8136.9138.3138.5138.7139.3140.7141.4141.5142.7143.9144.1145.2146.2147.9148.7149.0
 Medical Care177.0190.1201.4211.0178.7181.7185.9188.7191.5194.1197.7200.3202.8204.8207.5209.8212.2214.7217.6219.3221.5
Producer Price Index,2 Finished
 Consumer Goods120.4121.7123.0123.3120.3120.7120.2121.7122.3122.5122.8124.2122.8122.3122.4123.0123.9123.7124.5125.7125.9
 Energy78.177.878.077.078.577.774.378.180.578.377.079.579.476.174.476.780.276.976.780.079.4
 Food124.1123.3125.6126.8123.5122.8123.1123.0123.2123.8124.5126.3125.4126.4127.1126.5126.4127.2128.3128.0129.1
 Finished Goods Except Food and Energy133.7137.2138.5139.0133.6135.4136.5137.3136.9138.4139.3139.8137.3137.6138.6138.7138.7139.8140.8141.6141.7
Annual Percent ChangePercent Change From the Same Period of Previous Year
Gross Domestic Product
Billions of Dollars3.05.54.95.82.93.85.15.25.46.35.24.94.84.75.15.96.35.95.54.54.4
Billions of 1992 Chain Weighted-1.02.72.23.5-0.90.42.12.32.83.72.52.22.12.22.83.63.93.53.01.91.9
Implicit Price Deflator (1992 = 100.0)4.02.72.62.33.83.43.02.92.52.62.72.62.72.52.32.22.32.32.42.52.5
Personal Income
Personal Income in Billions3.76.04.14.92.93.95.75.85.17.23.64.35.13.44.05.25.55.17.85.65.7
Disposable Income in Billions4.26.23.84.83.54.46.16.25.27.33.53.94.83.03.74.85.65.17.65.25.1
Prices1
Consumer Price Index, All Items4.23.03.02.63.93.02.93.13.13.13.23.12.72.72.52.42.92.72.83.12.6
 All Items Less Medical Care3.92.72.72.53.62.62.62.82.82.82.92.92.52.52.42.22.72.52.73.02.5
 Energy0.40.51.10.5-0.7-8.1-3.70.92.62.43.42.0-0.3-0.4-0.9-1.12.31.51.92.9-0.6
 Food and Beverages3.61.42.12.33.12.41.60.81.41.71.82.12.02.52.31.92.72.52.73.22.6
 Medical Care8.77.46.04.88.58.07.87.77.26.86.36.15.95.55.04.74.64.84.94.64.4
Producer Price Index,2 Finished
 Consumer Goods1.91.01.10.21.7-1.1-0.21.11.61.52.12.10.4-0.2-0.3-1.00.91.21.72.21.6
 Energy4.2-0.40.3-1.24.9-11.2-5.70.92.50.83.61.8-1.3-2.8-3.4-3.51.01.13.14.3-1.0
 Food-0.2-0.71.90.9-0.9-1.5-1.4-2.0-0.30.81.22.71.82.12.00.20.80.61.01.22.1
 Finished Goods Except Food and Energy3.82.70.90.33.63.52.93.12.52.22.11.90.3-0.5-0.5-0.81.01.61.52.12.2

Base period = 1982-84, unless noted.

Formerly called the “Wholesale Price Index.”

NOTES: Q designates quarter of year. Unlike tables 1-5 quarterly data on GDP, personal income, and disposable personal income are seasonally adjusted at annual rates.

SOURCES: U.S. Department of Commerce, Bureau of Economic Analysis: Survey of Current Business. Washington. U.S. Government Printing Office. Monthly reports for January 1990-December 1995; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1990-December 1995.

Figure 1

Percent Change in Consumer Price From the Same Period of Previous Year: 1985-95

Growth in consumer prices for medical care services has moderated in recent quarters, the result of offsetting trends in professional services and hospital consumer prices. Consumer prices for professional services have accelerated over recent quarters, mostly because of accelerating prices for physicians' services. Hospital consumer prices continued to decelerate in the third quarter of 1995, growing at just 4.8 percent over the same period one year ago as compared with 5.7 percent in the third quarter of 1994. The deceleration has been the result of declining price growth for hospital rooms, other inpatient services, and other outpatient services. The slight deceleration of medical commodity consumer prices resulted from decelerating prices for non-prescription drugs and medical equipment and a change in the methodology used in measuring prescription drug prices. Consumer prices for non-prescription medical equipment and supplies decelerated to a 1.3-percent growth rate in the third quarter of 1995 after accelerating in early 1995. Similar trends have also occurred in over-the-counter drug prices. Prescription drug prices, although giving the appearance of decelerating in 1995, have been affected by both a change in the measuring methodology and by economic trends. Beginning in 1995, consumer drug prices have been calculated differently, incorporating measurements for substitution patterns of generic drugs that had not been used in the past. Under the new procedure, after a prescription drug in the CPI sample loses patent protection, all therapeutically equivalent drugs sold in generic form are given a equal chance for selection in the CPI. This re-selection occurs 6 months after the prescription drug loses patent protection to give the generic versions time to build market share. When generic substitutes are selected, the CPI treats the price difference between the original and the generic as a price change that is reflected in the index (U.S. Department of Labor, 1996).

Hospital Operations and Prices

The growth in hospital revenues and in most measures of hospital utilization accelerated moderately in the first three quarters of 1995 compared with the same three quarters of 1994, according to data on hospital operations from the American Hospital Association (AHA). These trends are evident in Tables 1 and 2, and in Figures 2 and 3. For the first three quarters of 1995, growth in total patient revenue accelerated to 5.2 percent from 4.2 percent in the same three quarters of 1994. There were similar trends in revenue growth for both inpatient and outpatient services, as inpatient revenue growth accelerated from 2.3 to 2.9 percent and outpatient revenue growth accelerated from 9.4 to 10.8 percent. During the same three-quarter period in 1995, the growth in the number of admissions and number of outpatient visits both accelerated. The one exception to the pattern of acceleration in hospital indicators was inpatient days. Although the number of inpatient days did not increase in 1995, it did decrease slightly less (-2.8 percent) than in 1994 (-2.9 percent). The pattern of growth in inpatient days is less indicative of spending patterns because some payers such as Medicare, reimburse for services on a per admission, rather than per day basis.
Table 1

Selected Community Hospital Statistics: 1991-95

ItemCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Utilization
All Ages
 Admissions in Thousands:32,67032,41132,65232,9388,0758,1608,3578,1028,0057,9478,3518,0868,0838,1338,3688,1808,1548,2368,6348,2818,213
 Admissions Per 1,000 Population1125122122122123124127123121120125121121121124121121121127122120
 Inpatient Days in Thousands211,475206,440202,078196,11751,45952,75654,23851,30650,38750,50953,22850,15049,08949,61151,70948,64847,65748,10250,37747,29646,239
 Adult Length of Stay in Days6.56.46.26.06.46.56.56.36.36.46.46.26.16.16.25.95.85.85.85.75.6
65 Years of Age or Over:
 Admissions in Thousands11,65911,86012,20912,4562,8102,9813,0772,9692,8812,9323,1383,0422,9443,0853,2113,0983,0223,1253,3793,1873,071
 Admissions Per 1,000 Population1360360366369346366376361349354378365352368382367357368397374359
 Inpatient Days in Thousands99,46898,92097,04294,87723,75925,24826,08024,68223,87524,28325,82224,27422,99023,95625,55123,49322,63123,20324,77822,82321,507
 Adult Length of Stay in Days8.58.37.97.68.58.58.58.38.38.38.28.07.87.88.07.67.57.47.37.27.0
Under 65 Years of Age:
 Admissions in Thousands21,01120,55120,44320,4835,2655,1805,2805,1335,1245,0155,2135,0445,1395,0475,1585,0825,1325,1115,2555,0945,143
 Admissions Per 1,000 Population1928987879290918988868986888688868786888586
 Admissions in Thousands112,007107,520105,036101,24027,70127,50928,15826,62426,51326,22527,40625,87526,09925,65526,15825,15525,02724,89925,59824,47224,732
 Adult Length of Stay in Days5.35.25.14.95.35.35.35.25.25.25.35.15.15.15.15.04.94.94.94.84.8
Surgical Operations in Thousands21,98322,46322,71023,2865,5345,4985,6085,6415,6305,5845,6465,7215,6775,6655,6645,8645,8405,9186,0285,9655,832
Outpatient Visits in Thousands344,116366,243390,188417,68487,64887,66689,16891,57293,27192,23294,67797,63799,21298,66298,341104,079107,022108,241111,088113,699113,332
Adjusted Patient Days in Thousands2282,887281,525278,938276,20969,49670,80472,78970,02169,28669,33272,30669,33468,35168,86071,24468,77667,71168,36371,22668,14667,079
Beds in Thousands912908902891910909909910908904905904901897895893888886881877871
Adult Occupancy Rate363.562.161.460.361.463.165.662.060.360.765.361.059.260.164.259.858.359.063.559.357.7
Total Hospital Revenues in Millions4$251,657$275,430$295,035$309,354$62,985$65,605$68,104$68,378$69,045$69,903$73,552$73,250$73,697$74,536$76,480$76,829$77,069$78,976$81,793$81,020$80,307
 Total Patient Revenues in Millions239,492262,034280,414293,28560,00362,42364,87065,00865,65366,50270,10769,61369,98570,70972,70272,86873,01874,69777,47676,55775,956
 Inpatient Revenues in Millions179,042192,163203,167208,26244,43046,51248,33847,63347,74648,44751,61050,35150,26250,94352,76751,54351,39352,55954,79753,13352,358
 Outpatient Revenues in Millions60,44969,87077,24885,02315,57315,91116,53217,37517,90818,05518,49719,26219,72319,76619,93521,32521,62522,13822,67923,42423,599
Operating Expenses
Total in Millions$238,633$260,994$278,880$292,801$60,214$62,301$63,739$64,532$65,829$66,894$68,527$69,245$70,002$71,106$71,677$72,618$73,468$75,039$76,259$76,751$76,808
 Labor in Millions128,704140,112149,733156,82632,51633,52634,14334,50135,39636,07336,78237,25037,57838,12338,42038,82839,40840,17040,52940,76840,857
 Non-Labor in Millions109,929120,882129,147135,97527,69828,77529,59730,03130,43430,82131,74631,99432,42432,98333,25733,79034,05934,86935,73035,98335,951
Inpatient Expense in Millions$178,392$191,385$202,035$207,897$44,586$46,421$47,495$47,284$47,873$48,733$50,447$50,085$50,274$51,229$52,023$51,366$51,709$52,800$53,936$53,268$52,945
 Amount per Patient Day8449271,0001,0608668808769229509659489991,0241,0331,0061,0561,0851,0981,0711,1261,145
 Amount per Admission5,4605,9056,1886,3125,5225,6895,6835,8365,9806,1336,0416,1946,2206,2996,2176,2796,3416,4116,2476,4326,446
Outpatient Expense in Millions$60,241$69,609$76,845$84,903$15,627$15,880$16,244$17,248$17,956$18,161$18,080$19,160$19,728$19,877$19,654$21,252$21,758$22,239$22,323$23,483$23,863
 Amount per Outpatient Visit175190197203178181182188193197191196199201200204203205201207211

Admissions per 1,000 population is calculated using population estimates prepared by the Social Security Administration.

Adjusted patient days is an aggregate figure reflecting the number of days of inpatient care, plus an estimate of the volume of outpatient services, expressed in units equivalent to an inpatient day in terms of level of effort. It is derived by multiply visits by the ratio of outpatient revenue per outpatient visit to inpatient revenue per inpatient day, derived by multiplying the number of outpatientvisits by the ratio of outpatient revenue per outpatient visit to inpatient refvenue per inpatient day, and adding the product to the number of inpatient days.

Adult occupancy rate is the ratio of average daily census to the average number of beds maintained during the reporting period.

Total hospital revenue is the sum of total patient revenue and all other operating revenue. Total patient revenue is the sum ofinpatient revenue and outpatient revenue.

NOTES: Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCE: American Hospital Association: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1991-September 1995.

Table 2

Percent Change in Selected Community Hospital Statistics: 1991-95

ItemCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Annual Percent ChangePercent Change From the Same Period of Previous Year
Utilization
All Ages:
 Admissions in Thousands-1.1-0.80.70.9-1.21.61.3-1.0-0.9-2.6-0.1-0.21.02.30.21.20.91.33.21.20.7
 Admissions Per 1,000 Population-2.1-1.8-0.3-0.1-2.20.50.2-2.0-1.9-3.7-1.1-1.2-0.11.3-0.80.2-0.10.32.20.3-0.2
 Inpatient Days in Thousands-2.5-2.4-2.1-2.9-2.90.0-0.6-2.6-2.1-4.3-1.9-2.3-2.6-1.8-2.9-3.0-2.9-3.0-2.6-2.8-3.0
 Adult Length of Stay in Days-1.4-1.6-2.8-3.8-1.8-1.6-1.9-1.6-1.2-1.7-1.8-2.1-3.5-4.0-3.1-4.1-3.8-4.3-5.6-4.0-3.7
65 Years of Age or Over:
 Admissions in Thousands2.51.72.92.02.66.74.31.72.5-1.62.02.52.25.22.31.82.61.35.22.91.6
 Admissions Per 1,000 Population0.70.11.50.80.94.92.60.10.9-3.10.51.00.83.91.10.61.40.14.01.70.5
 Inpatient Days in Thousands0.4-0.6-1.9-2.20.44.21.6-0.50.5-3.8-1.0-1.7-3.7-1.3-1.1-3.2-1.6-3.1-3.0-2.9-5.0
 Adult Length of Stay in Days-2.0-2.2-4.7-4.2-2.2-2.3-2.6-2.2-2.0-2.2-2.9-4.0-5.8-6.3-3.3-5.0-4.1-4.4-7.8-5.6-6.5
Under 65 Years of Age:
 Admissions in Thousands-2.9-2.2-0.50.2-3.1-1.1-0.4-2.5-2.7-3.2-1.3-1.70.30.7-1.10.7-0.11.31.90.20.2
 Admissions Per 1,000 Population-3.8-3.2-1.5-0.8-4.0-2.1-1.4-3.5-3.6-4.1-2.3-2.7-0.7-0.3-2.0-0.2-1.10.30.9-0.7-0.7
 Admissions in Thousands-4.9-4.0-2.3-3.6-5.6-3.6-2.6-4.5-4.3-4.7-2.7-2.8-1.6-2.2-4.6-2.8-4.1-2.9-2.1-2.7-1.2
 Adult Length of Stay in Days-2.1-1.9-1.8-3.8-2.6-2.5-2.2-2.1-1.7-1.5-1.4-1.1-1.8-2.8-3.5-3.5-4.0-4.2-4.0-3.0-1.4
Surgical Operations in Thousands0.42.21.12.50.72.24.21.21.71.60.71.40.81.50.32.52.94.56.41.7-0.1
Outpatient Visits in Thousands5.46.46.57.05.18.08.16.16.45.26.26.66.47.03.96.67.99.713.09.25.9
Adjusted Patient Days in Thousands-0.4-0.5-0.9-1.0-0.61.71.2-0.8-0.3-2.1-0.7-1.0-1.3-0.7-1.5-0.8-0.9-0.70.0-0.9-0.9
Beds in Thousands-1.0-0.5-0.7-1.2-1.0-0.7-0.6-0.3-0.3-0.5-0.4-0.7-0.8-0.8-1.2-1.2-1.4-1.2-1.5-1.8-1.9
Adult Occupancy Rate1-0.9-1.4-0.7-1.1-1.20.4-0.7-1.5-1.1-2.4-0.2-1.0-1.1-0.6-1.1-1.1-0.9-1.1-0.7-0.6-0.6
Total Hospital Revenues in Millions10.39.47.14.910.311.912.09.89.66.68.07.16.76.64.04.94.66.06.95.54.2
 Total Patient Revenues in Millions10.59.47.04.610.612.312.29.89.46.58.17.16.66.33.74.74.35.66.65.14.0
 Inpatient Revenues in Millions8.27.35.72.58.010.410.17.87.54.26.85.75.35.22.22.42.23.23.83.11.9
 Outpatient Revenues in Millions18.015.610.610.118.918.418.615.615.013.511.910.910.19.57.810.79.612.013.89.89.1
Operating Expenses
Total in Millions9.99.46.95.09.711.211.59.59.37.47.57.36.36.34.64.95.05.56.45.74.5
 Labor in Millions9.28.96.94.78.69.910.28.98.97.67.78.06.25.74.54.24.95.45.55.03.7
 Non-Labor in Millions10.710.06.85.311.012.912.910.39.97.17.36.56.57.04.85.65.05.77.46.55.6
Inpatient Expense in Millions7.67.35.62.97.19.39.47.57.45.06.25.95.05.13.12.62.93.13.73.72.4
 Amount per Patient Day10.39.97.86.010.39.310.110.49.79.78.28.47.87.06.25.75.96.36.46.75.5
 Amount per Admission8.88.14.82.08.37.68.08.68.37.86.36.14.02.72.91.42.01.80.52.41.7
Outpatient Expense in Millions17.315.610.410.517.917.217.915.414.914.411.311.19.99.48.710.910.311.913.610.59.7
 Amount per Outpatient Visit11.38.63.63.212.28.59.08.88.08.74.84.23.32.34.74.12.22.00.51.13.6

Change in rate, rather than percent change.

NOTES: Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCE: American Hospital Association: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1991 -September 1995.

Figure 2

Percent Change in Inpatient Hospitals Statistics From the Same Period of Previous Year: 1994 Versus 1995

Figure 3

Percent Change in Outpatient Hospital Statistics From the Same Period of Previous Year: 1994 Versus 1995

Hospital revenues are determined by both the extent of utilization of hospital services and by the cost per service. When examining the trend in hospital revenue, it is useful to look at the price changes associated with both inpatient and outpatient settings. Although utilization for both inpatient and outpatient services accelerated slightly in the first three quarters of 1995, prices for these two types of services behaved differently. In the first three quarters of 1995, inpatient prices have decelerated for all payers, including consumers, according to the Producer Price Index (PPI) and the CPI. As indicated in Figure 2, the PPI for hospital inpatient services, which represents inpatient prices faced by all payers, decelerated from 3.6 percent in the first three quarters of 1994 to 3.1 percent in the same three quarters of 1995. There was deceleration from each sector of payers, including Medicare and Medicaid. This trend also holds in the CPI for hospital room services, which represents out-of-pocket consumer prices (as discussed in the Background that follows), as it decelerated from 5.9 percent in 1994 to 5.1 percent in 1995. There was quite a different trend in hospital outpatient prices for the first three quarters of 1995, as shown in Figure 3. All hospital outpatient prices accelerated to 6.3 percent in the first three quarters of 1995 from 3.9 percent in the same three quarters of 1994 according to the PPI. The acceleration was caused by faster growth in the prices paid by Medicare, Medicaid, and other payers for hospital outpatient services. It is interesting to note that while the PPI for other outpatient service payers, which includes all payers except for Medicare and Medicaid, accelerated in 1995 year to date, consumer prices for outpatient services decelerated from 5.9 percent in 1994 to 4.9 percent in 1995. Again, the CPI reflects list prices for consumer out-of-pocket expenses for outpatient services, whereas the PPI reflects transaction price of all payments including out-of-pocket expenses. It needs to be mentioned that the CPI and PPI cannot be directly compared because of broad differences in the scope and purposes of the surveys.

Trends in Health Sector Employment and Earnings

The employment situation in the health care sector, viewed in the context of the change in the first three quarters of 1995 over the first three quarters of 1994, presents a picture that is consistent with the change in prices and hospital operations noted earlier, and with the use of health care indicators to monitor aggregate health spending described below. During the first three quarters of 1995, little change occurred in the growth rate of health care employment and payrolls, consistent with indications that overall health spending has not accelerated or decelerated appreciably thus far in 1995. In the first three quarters of 1995, private sector health care employment grew 2.9 percent, virtually the same as the 2.8 percent recorded in the first three quarters of 1994. Implied non-supervisory payrolls in health sector establishments increased 5.7 percent in the first three quarters of 1995, compared with an increase of 5.4 percent in 1994. The stability of health sector employment and payroll growth for the first three quarters of 1995 contrasts with deceleration of employment and payroll growth in the private non-farm sector over the same period. Total private non-farm employment increased 3.2 percent in 1994 and 2.8 percent in 1995, and implied payrolls in the private non-farm sector increased 6.9 percent in 1994 and 5.5 percent in 1995. Total hospital employment grew 0.6 percent in the first three quarters of 1995, a change from the 0.3-percent decrease in total hospital employment in the first three quarters of 1994. Home health care services employment grew 10.5 percent in the first three quarters of 1995, a deceleration noted earlier, compared with an increase of 19.5 percent over the same period in 1994. Both observations are consistent with the indicators of health care spending by service described in the next section.

Monitoring Personal Health Care Spending Using Indicator Data

The quarterly indicator data presented in Tables 1-12 can be used to monitor the change in personal health care expenditures (PHCE) prior to the availability of more comprehensive annual data on health care spending. PHCE measures spending for health care services and products purchased by or on behalf of individuals, and in 1994 PHCE accounted for 88 percent of NHE, roughly the same percentage share as in 1992 and 1993 (Levit et al., 1996).
Table 12

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the HCFA Medicare Economic Index (MEI) with DRI Forecast Assumptions, by Expense Category: 1993-97

Expense Category1Price/Wage VariableBase Year Weights CY 198921993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3Forecast
1995Q41996Q11996Q21996Q31996Q41997Q11997Q21997Q3
Index Levels
Total—100.000111.8112.7112.9113.4114.2114.9115.1115.5116.3116.9117.4118.0118.9119.5119.9120.5
Physician Earnings—54.155110.4111.3111.2111.4112.5113.0112.9113.2114.3114.8115.0115.3116.3116.8116.9117.2
 Wages and SalariesAHE—Privates345.342108.3108.9108.7108.8110.1110.6110.4110.8111.9112.4112.6112.8113.9114.3114.4114.5
 BenefitsECI—Benefits, Private38.813121.6123.5124.2124.8124.7125.6125.8125.8126.2127.0127.5128.1128.5129.4129.9130.7
Practice Expenses—45.845113.4114.3114.9115.8116.1117.0117.6118.2118.6119.4120.3121.2121.9122.7123.5124.5
 Non-Physician Compensation—16.296113.1113.9114.4115.1115.4116.1116.3116.7117.1117.9118.3119.1119.5120.2120.6121.3
  Wages and Salaries—13.786111.6112.2112.7113.3113.7114.3114.5114.9115.2116.0116.4117.3117.7118.4118.6119.4
   Professional/TechnicalECI—W/S: Professional/Technical33.790113.0113.5114.1114.6115.0115.3115.5116.0116.3116.9117.2118.1118.6119.0119.4120.3
   ManagersECI—W/S: Administrative/Managerial32.620111.2111.6112.2113.1113.2114.1114.3114.7115.1116.0116.6117.4117.8118.5119.0119.8
   ClericalECI—W/S: Clerical35.074111.9112.5113.1113.7114.0114.8115.0115.4115.7116.7117.2117.9118.3119.2119.5120.2
   CraftECI—W/S: Craft30.069109.0109.5110.1111.0110.8111.3111.9112.6112.7113.2113.8114.5114.6115.1115.6116.1
   ServicesECI—W/S: Service Occupation32.233109.3109.9110.1110.5111.3111.5111.7112.1112.6113.1113.3114.2114.9115.2115.1115.9
  Employee BenefitsECI—Benefits, Private White Collar32.510121.0123.4124.1124.9124.9126.3126.6126.7127.2127.9128.6129.1129.6130.4131.1131.9
 Office ExpensesCPI(U)—Housing10.280115.6116.7117.3118.4118.3119.4120.2121.5121.4121.9122.9124.5124.8125.6126.6128.2
 Medical Materials/SuppliesPPI—Drugs/PPI-Surgical/CPI-Medical Supplies5.251123.0124.6125.0126.7126.9127.5128.1128.1129.4130.4131.9132.3132.8133.7135.0135.3
 Professional Liability InsuranceHCFA—Professional Liability Premiums4.78094.595.396.096.497.197.998.999.7100.7101.8103.0104.4105.6106.9108.1109.4
 Medical EquipmentPPI—Medical Instruments/Equipment2.348108.9109.1109.2109.4109.5110.3110.4111.4110.9111.9112.1111.6111.9112.6112.9112.8
 Other Professional Expenses—6.890118.2118.9119.8120.8121.8122.9124.0124.4125.2125.8127.2128.0129.3130.0131.5132.5
  AutomobileCPI(U)—Private Transportation1.400114.3113.7115.2117.5119.1119.6121.5120.8120.9120.8123.4123.7124.8125.1127.8128.5
  All OtherCPI(U)—All Items Less Food/Energy5.490119.2120.2121.0121.7122.5123.7124.7125.3126.3127.1128.1129.1130.5131.3132.5133.5
4-Quarter Moving-Average Percent Change
Total—100.0002.32.22.12.12.12.02.02.01.91.81.92.02.12.22.22.2
Physician Earnings—54.1551.81.81.71.71.71.71.71.71.61.61.61.71.81.81.81.7
 Wages and SalariesAHE—Private345.3421.21.31.31.41.51.51.61.71.71.71.81.81.81.81.71.6
 BenefitsECI—Benefits, Private38.8134.23.93.53.12.82.42.11.61.31.11.11.41.51.71.91.9
Practice Expenses—45.8452.92.82.62.52.42.42.42.32.22.22.22.32.42.62.72.7
 Non-Physician Compensation—16.2962.22.12.12.12.12.01.91.81.61.51.51.71.82.02.02.0
  Wages and Salaries—13.7861.91.91.81.81.81.81.81.71.51.51.51.71.92.02.02.0
   Professional/TechnicalECI—W/S: Professional/Technical33.7902.11.91.81.71.71.61.51.41.31.21.31.51.71.81.91.9
   ManagersECI—W/S: Administrative/Managerial32.6201.91.91.91.91.82.02.01.81.81.71.71.92.12.22.22.1
   ClericalECI—W/S: Clerical35.0742.12.22.22.12.02.01.91.81.71.61.61.82.02.12.12.1
   CraftECI—W/S: Craft30.0691.61.61.71.71.71.71.71.61.61.61.61.71.71.71.71.6
   ServicesECI—W/S: Service Occupation32.2330.91.01.11.21.41.41.51.51.41.31.41.51.71.81.91.7
  Employee BenefitsECI—Benefits, Private White Collar32.5103.83.63.43.43.43.12.82.31.91.61.51.61.61.81.92.0
 Office ExpensesCPI(U)—Housing10.2802.72.72.62.62.52.42.42.42.52.42.42.42.42.72.83.0
 Medical Materials/SuppliesPPI—Drugs/PPI-Surgical/CPI-Medical Supplies5.2514.03.83.23.13.02.82.82.31.91.92.12.62.82.92.72.5
 Professional Liability InsuranceHCFA—Professional Liability Premiums4.7805.54.74.03.63.33.02.93.03.23.53.84.14.44.74.94.9
 Medical EquipmentPPI—Medical Instruments/Equipment2.3482.11.71.10.90.50.60.91.21.31.41.51.11.00.80.60.8
 Other Professional Expenses—6.8903.12.92.82.82.93.13.33.23.12.92.72.72.83.03.33.4
  AutomobileCPI(U)—Private Transportation1.4002.31.91.82.53.03.94.84.43.72.71.71.62.12.73.23.6
  All OtherCPI(U)—All Items Less Food/Energy5.4903.33.23.02.92.92.92.92.93.03.02.92.93.03.13.33.4

For data sources used to estimate the index relative weights and choice of price proxies, see the November 25, 1992, Federal Register.

Category weights may not sum to total because of rounding.

Series are adjusted for productivity using 10-year moving average of output per hour for the non-farm business sector. All series in the compensation portion of the MEI are adjusted for productivity, so both economywide productivity and physician-practice productivity are not included in the update.

NOTES: AHE represents average hourly earnings, ECI represents Employment Cost Index, CPI(U) represents Consumer Price Index for all urban consumers, and PPI represents Producer Price Index. W/S is wages and salaries. HCFA is Health Care Financing Administration. A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding 2 or more categories. Q designates quarter of year. An example of how a percent change is calculated is shown in the Notes at end of Table 9. CY is calendar year.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Second quarter 1995 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw Hill (DRI).

The quarterly indicator data can be used to produce a rough approximation of the trends in the components of PHCE through the third quarter of 1995. The more reliable annual estimates of PHCE consist of highly detailed estimates of spending by type of payer for each service category, and are based on comprehensive data sources not yet available for 1995. The quarterly indicator data can be used to monitor the growth in some of the components of PHCE prior to the availability of the more complete and comprehensive annual data. PHCE consists of 9 service categories: hospital care, physicians services, dental services, other professional services, home health care, nursing home care, drugs and other non-durable medical products, vision products and other durable medical products, and other personal health care. Indicator data presented in Tables 1-12 can be used to monitor the growth in the first 6 of these service categories. These six service categories, hospital care, physicians services, dentists services, other professional services, home health care and nursing home care, accounted for 86.4 percent of PHCE in 1994. By creating or using existing quarterly indicators for the service categories, it is possible to monitor the growth in each component through the third quarter of 1995. Hospital care is by far the largest service category in PHCE, accounting for more than 40 percent of PHCE in 1994. The growth in hospital care in the NHE has decelerated steadily over the last 4 years (Levit, et al., 1996). The annual growth in hospital care has fallen from 10.1 percent in 1991 to 4.4 percent in 1994. The quarterly indicators for hospital care, AHA panel survey data on operating expenses (Table 1) and total revenues, suggest that there has been little change in the growth rate for hospital care through the third quarter of 1995. Total operating expenses and total revenues in community hospitals (Table 1) increased 5.0 and 4.9 percent respectively from 1993 to 1994, compared with an increase of 4.4 percent in the hospital care estimate in the NHA (The hospital care measure in the NHA includes federal facilities and military hospitals, as well as non-Federal, non-community institutions such as psychiatric hospitals. In 1994, 88 percent of hospital care was delivered in short-term, acute-care community hospitals.) The change in both operating expenses and total revenues of community hospitals for the first three quarters of 1995 over the first three quarters of 1994 is 5.5 percent. This suggests that the growth in hospital care so far in 1995 has been close to the 1994 growth, signaling little if any acceleration in the growth rate. The indicator series used for physicians services, dentists services, and other professional services are developed using non-supervisory workhours from the Bureau of Labor Statistics (BLS) Current Establishment Survey (Table 3) and the CPI data on physicians services, dentists services, and other professional services (Table 7). For each service quarterly non-supervisory workhours are weighted (multiplied) by the CPI for the quarter to create quarterly indicators. Comparing the change in the indicator series for the first three quarters of 1995 over the first three quarters of 1994 with the annual change from 1993 to 1994 suggests that physicians services has grown at a rate similar to the 1994 annual growth, dentists services may have accelerated slightly, while other health professionals growth may have decelerated slightly. Viewed as a composite, the growth rate for this group of services shows little change in the first three quarters 1995 as compared with 1994, neither accelerating or decelerating appreciably.
Table 3

Employment, Hours, and Earnings in Private-Sector Health Service Establishments, by Selected Type of Establishment: 1991-95

Type of EstablishmentCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Total Employment (in Thousands)
Non-Farm Private Sector89,85489,95991,88994,91790,54890,19488,11289,97190,82390,92889,47891,70692,97093,40292,09694,74596,18096,64695,20697,32798,352
Health Services8,1838,4908,7569,0018,2478,3218,3758,4538,5368,5968,6388,7248,8088,8548,8788,9709,0549,1019,1459,2299,318
 Offices and Clinics of Physicians1,4041,4631,5061,5401,4201,4321,4401,4551,4731,4841,4891,5021,5161,5161,5191,5341,5511,5581,5641,5811,597
 Offices and Clinics of Dentists528541556575532535534538543547548554559563565573577583587595603
 Nursing Homes1,4931,5331,5851,6491,5051,5151,5181,5261,5391,5481,5531,5731,5971,6171,6261,6421,6611,6661,6711,6821,703
 Private Hospitals3,6553,7503,7793,7743,6733,6963,7203,7413,7673,7713,7763,7823,7883,7713,7623,7683,7843,7843,7923,8093,828
 Home Health Care Services344398469555351364375393403420432458481505523550566582591603617
Non-Supervisory Employment (in Thousands)
Non-Farm Private Sector72,65072,93074,77777,47673,33173,04771,12772,92973,75273,91372,54174,61475,77776,17574,87877,35278,63079,04577,58879,56480,510
Health Services7,2767,5467,7707,9747,3347,3967,4447,5167,5887,6367,6697,7477,8157,8477,8697,9538,0168,0568,0968,1758,253
 Offices and Clinics of Physicians1,1551,2021,2311,2571,1681,1761,1961,1961,2091,2161,2191,2291,2381,2361,2421,2541,2651,2691,2741,2891,303
 Offices and Clinics of Dentists463473487502468469467471476479480485489492495501504508513520527
 Nursing Homes1,3471,3851,4311,4871,3591,3681,3711,3781,3921,3991,4021,4211,4421,4591,4651,4811,4981,5021,5061,5171,535
 Private Hospitals3,3533,4423,4643,4513,3703,3923,4153,4343,4583,4623,4653,4693,4713,4523,4413,4483,4583,4573,4663,4843,501
 Home Health Care Services319369435514325337347364374389400424446469485510523538547559571
Average Weekly Hours
Non-Farm Private Sector34.334.434.534.734.634.434.134.334.634.534.034.534.834.634.334.734.934.834.334.434.8
Health Services32.532.832.832.832.732.632.832.632.932.832.732.832.932.832.832.832.832.832.832.732.8
 Offices and Clinics of Physicians31.932.232.232.432.032.032.332.032.232.232.132.232.332.332.432.332.332.632.432.332.4
 Offices and Clinics of Dentists28.328.328.328.128.228.328.528.228.328.428.128.428.228.328.228.228.028.228.028.027.7
 Nursing Homes32.132.332.232.332.432.232.232.032.732.332.032.232.632.132.132.232.532.432.332.232.8
 Private Hospitals34.234.434.634.634.434.334.434.434.534.434.634.534.734.634.734.634.734.634.734.534.5
 Home Health Care Services26.127.427.828.226.326.527.327.027.627.627.527.827.927.928.028.228.228.528.728.728.7
Average Hourly Earnings
Non-Farm Private Sector10.3210.5710.8311.1210.3410.4410.5010.5210.5710.6910.7710.7910.8210.9611.0511.0611.1111.2811.3611.3811.46
Health Services10.9611.3911.7812.1011.0511.1611.2311.3111.4411.5711.6911.7111.8011.9212.0012.0212.1312.2412.3612.3612.46
 Offices and Clinics of Physicians11.1311.4111.8912.2411.1511.3111.2211.3211.4711.6511.7211.8611.9112.0712.1612.2112.2712.3312.4112.3912.44
 Offices and Clinics of Dentists10.6211.0211.4411.9610.6410.7810.9110.9710.9911.2011.2611.3511.4611.6811.7811.9112.0012.1612.2412.3412.40
 Nursing Homes7.567.868.178.497.597.667.757.827.907.968.068.118.208.318.408.448.528.618.708.728.77
 Private Hospitals12.5013.0313.4613.8312.6612.7512.8512.9013.1113.2513.3713.3713.4913.6113.7013.7013.9014.0414.1814.1614.35
 Home Health Care Services9.3810.0010.4110.669.469.629.839.9810.0410.1510.3210.3510.4710.5010.5810.6210.7110.7510.8410.8410.92
Addenda: Hospital Employment (in Thousands)
Total4,9585,0685,1005,0894,9795,0045,0365,0585,0885,0905,0935,1015,1145,0915,0805,0835,0985,0935,1005,1165,140
 Private3,6553,7503,7793,7743,6733,6963,7203,7413,7673,7713,7763,7823,7883,7713,7623,7683,7843,7843,7923,8093,828
 Federal234235234233235235236235234233231233235235235234233231229230234
 State417419414405415417420420419417415414414412409407404401399393389
 Local653665673676656656659662668669670672677674673674678677680684689

Excludes hospitals, clinics, and other health-related establishments run by all governments.

NOTES: Data presented here conform to the 1987 Standard Industrial Classification. Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1991 -December 1995.

Table 7

Index Levels of Medical Prices: 1991-95

ItemCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Consumer Price Indexes, All Urban Consumers1
Medical Care Services2177.1190.5202.9213.4178.7181.8186.1188.9192.1195.0198.8201.8204.4206.7209.5212.0214.6217.5221.0223.0225.4
 Professional Services165.7175.8184.7192.5167.0169.1172.3174.7177.0179.0181.6184.1185.9187.1189.3191.8193.5195.5198.3200.2202.0
  Physicians' Services170.5181.2191.3199.8171.6173.6177.2180.3182.6184.6187.7190.5192.7194.2196.7199.2200.7202.4205.6208.1210.1
  Dental Services167.4178.7188.1197.1169.4172.1174.7177.0180.4182.6184.8187.6189.2190.8193.0196.1198.3201.1204.0205.8207.8
 Hospital and Related Services196.1214.0231.9245.6197.9202.3208.1211.3216.0220.6226.2230.0233.8237.7241.3243.4247.2250.6254.2255.6259.1
  Hospital Room191.9208.7226.4239.2193.3197.4202.8206.1210.6215.2220.6224.6228.2232.0235.3237.2240.9243.5247.8249.4252.6
  Other Inpatient Services (1986=100)158.0172.3185.7197.1159.5163.3168.0170.2173.9177.0181.1183.9187.2190.4193.5195.4198.2201.2204.0205.2207.8
  Outpatient Services (1986=100)153.4168.7184.3195.0155.1158.5163.5166.4170.1174.7179.9183.0185.6188.7191.5192.9196.3199.4201.5202.3205.5
Medical Care Commodities176.8188.1195.0200.7178.9181.0184.9187.8189.0190.4193.0194.2196.0196.7198.5200.1201.6202.6203.4203.6204.6
 Prescription Drugs199.7214.7223.0230.6202.4205.6210.9214.5215.6218.0221.4221.6223.9225.2228.0230.5231.0232.8233.4233.9235.4
 Non-Prescription Drugs and Medical Supplies (1986=100)126.3131.2135.5138.1127.2127.8129.3131.1132.1132.1133.2135.6136.7136.5136.7136.8139.4139.4140.5140.0140.4
 Internal and Respitory Over-the-Counter Drugs152.4158.2163.5165.9153.7153.7155.3158.4159.9159.3160.4163.4165.3164.9165.2165.5166.6166.4167.1166.0167.4
 Non-Prescription Medical Equipment and Supplies145.0150.9155.9160.0145.9148.0150.1150.4151.2152.1153.8156.4156.5156.7156.7156.7163.1163.6165.8166.3165.2
Producer Price Indexes3
Industry Groupings:4
 Health Services (12/94=100)——————————————————101.6101.9102.5
  Offices and Clinics of Doctors of Medicine (12/93=100)———102.8——————————101.8102.4102.9104.0106.3106.8107.0
   Medicare Treatments (12/93=100)———104.7——————————104.7104.7104.7104.7109.6109.6109.6
   Non-Medicare Treatments (12/93=100)———102.3——————————101.0101.8102.4103.8105.5106.1106.1
  Hospitals (12/92=100)——102.5106.2——————101.2101.7103.0104.0105.0105.4106.7107.7109.2109.3110.0
   General Medical and Surgical Hospitals (12/92=100)——102.4106.0——————101.3101.6102.9103.9104.8105.2106.5107.5109.0109.2109.9
    Inpatient Treatments (12/92=100)——102.5106.0——————101.2101.5102.9104.2104.9105.2106.4107.5108.5108.6109.1
     Medicare Patients (12/92=100)——100.6102.6——————100.0100.0100.0102.3102.3102.3102.3103.6103.6103.6103.6
     Medicaid Patients (12/92=100)——102.3107.1——————100.9101.2103.0104.3105.3106.0108.1108.9109.5109.6109.8
     All Other Patients (12/92=100)——103.5107.7——————101.9102.5104.5105.3106.3106.7108.4109.4111.0111.1112.0
    Outpatient Treatments (12/92=100)——102.5106.7——————101.5102.0103.0103.4105.0105.8107.6108.2111.9112.5113.9
     Medicare Patients (12/92=100)——103.7107.0——————103.1103.3104.4104.1105.5106.0107.5108.8110.2111.1111.9
     Medicaid Patients (12/92=100)——101.6103.3——————100.7101.5102.4101.9101.8101.2105.1105.1105.7105.9105.8
     All Other Patients (12/92=100)——102.4106.9——————101.3101.8102.8103.4105.2106.2107.8108.4112.7113.2114.9
  Skilled and Intermediate Care Facilities (12/94=100)——————————————————101.9102.8104.2
   Public Payors (12/94=100)——————————————————101.8102.7104.4
   Private Payors (12/94=100)——————————————————102.1103.2104.1
  Medical Laboratories (6/94=100)————————————————100.099.9101.6103.4106.8
Commodity Groupings:
 Drugs and Pharmaceuticals182.6192.2200.9206.0184.7186.2188.5191.8193.4195.1198.7200.6202.0202.4204.6205.9206.3207.0208.5210.3211.0
  Ethical (Prescription) Preparations217.5231.7242.2250.0219.9222.8227.1230.9233.3235.4239.0241.8243.5244.5248.3250.1250.0251.4252.7255.8257.3
  Proprietary (Over-the-Counter) preparations165.4173.6180.0183.2168.2167.8168.9173.7175.1176.7177.4179.3181.6181.6181.4182.6184.4184.5185.5186.6186.6
 Medical, Surgical, and Personal Aid Devices130.3133.9137.8140.4130.7131.0132.9133.8134.1134.7137.1138.1137.8138.3140.1140.3140.6140.5140.7140.8141.2
  Personal Aid Equipment117.1120.2122.3130.1117.0120.0120.0120.2120.3120.4122.6122.6121.9121.9127.8130.8130.9130.9131.2131.8133.4
  Medical Instruments and Equipment (6/82=100)120.7123.4126.0126.7121.0121.0122.6123.4123.5123.9125.5126.5125.8126.2126.4126.5126.8126.9127.8128.0129.0
  Surgical Appliances and Supplies (6/83=100)140.7145.0151.0155.7141.1141.3143.6144.9145.2146.3150.0151.1151.1151.7155.4155.7156.1155.4154.3154.1153.7
  Ophthalmic Goods (12/83=100)116.0118.0119.0119.6116.1117.0117.6118.1118.4117.7118.4118.7119.3119.4120.0119.4119.4119.8121.7121.8122.9
  Dental Equipment and Supplies (6/85=100)121.2126.6131.5135.2122.0122.4126.0125.6126.8127.9130.4131.8132.0131.6134.2135.0136.0135.7136.4137.9137.0

Unless otherwise noted, base year is 1982-84=100

Includes the net cost of private health insurance, not shown separately.

Unless otherwise noted, base year is 1982=100. Producer price indexes are classified by industry (price changes received for the industry's output sold outside the industry) and commodity (price changes by similarity of end use or material composition).

Further detail for Producer Price Industry groupings, such as types of physician practices, hospital DRG groupings, etc., are available from the Bureau of Labor Statistics..

NOTES: Q designates quarter of year. Data are not seasonally adjusted.

SOURCES: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for January 1991-September 1995; U.S. Department of Labor, Bureau of Labor Statistics: Producer Price Indexes. Washington. U.S. Government Printing Office. Monthly reports for January 1991-September 1995.

Indicators for nursing home care and home health care services can be created using non-supervisory work hours from the Current Establishment Survey and price measures from the input price indexes maintained by HCFA - the Skilled Nursing Facility Input Price Index (Table 10) and the Home Health Agency Input Price Index (Table 11). For both nursing home care and home health care services, these indicators suggest the growth in these services in the first three quarters of 1995 was slightly slower than the growth in 1994.
Table 10

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the Skilled Nursing Facility Input Price Index, by Expense Category: 1993-97

Expense Category1Price/Wage VariableBase Year Weights CY 197721993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q31996Q41997Q11997Q21997Q31997Q4
Index Levels
Total—100.000252.4254.9256.2258.2260.2262.7263.8265.3267.4270.3271.8274.2276.0279.4280.5283.0
 Compensation—70.620257.2260.0261.4263.7266.1269.1269.9271.4273.7277.0278.3281.1283.1287.1287.9290.8
  Wages and SalariesAHE-Nursing Facilities63.020254.3257.1258.4260.9263.4266.3267.0268.4270.8274.2275.4278.2280.1284.1284.6287.5
  Employee BenefitsBEA-Supplement to Wages/Salaries per Worker-7.600280.7284.3285.9286.9288.3292.3294.2296.1297.9299.5301.8304.9307.9312.1315.4318.5
 Fuel and Other Energy4.270231.3233.0232.8232.8231.7231.4231.0231.4227.7227.9230.2231.1232.1233.3234.3235.5
  Fuel Oil and CoalIPD-Fuel Oil and Coal1.660202.4205.4203.8203.6201.3200.6201.2201.7193.4190.9194.3193.4193.4193.6193.8193.9
  ElectricityIPD-Electricity1.210224.3221.8221.2223.6224.3225.5225.7228.4227.4227.1226.8227.0227.4227.8228.3228.8
  Natural GasIPD-Natural Gas0.910250.7254.0254.6249.8246.9243.9239.9235.5233.8235.7239.0241.7244.2246.6248.2249.8
  Water and Sewerage MaintenanceCPI(U)-Water and Sewage0.490310.7315.1318.7322.5324.2326.8328.4331.8333.5340.1343.9349.3352.1356.6360.5367.0
 Food—9.740193.0194.0193.9194.8195.5196.6197.0199.2202.2204.0205.2205.8206.3207.1208.1209.1
  Direct PurchasePPI-Processed Foods4.930169.4170.9169.8169.0168.9170.1168.8171.9175.5176.8177.1176.8176.5177.1177.9178.7
  Contract ServiceCPI(U)-Food and Beverages4.810217.2217.6218.6221.3222.8223.8225.9227.1229.4231.8233.9235.6236.8237.9239.1240.3
 All Other—15.370273.8276.1278.1280.1281.9284.4287.1288.9290.9293.4295.8297.9299.8302.4304.8306.9
  PharmaceuticalsPPI-Prescription Drugs1.500371.9377.8380.4380.4382.5384.5389.2391.3394.1387.4401.2402.0402.0405.8408.2409.3
  SuppliesCPI(U)-All Items3.280240.9242.1243.7245.8247.2249.1251.1252.4254.1256.1258.2260.0261.8263.6265.5267.3
  Health ServicesCPI(U)-Physicians' Services1.210331.9336.2340.5343.1346.0351.5355.8359.1361.2365.5368.4371.4373.8379.2383.0386.4
  Other Business ServicesCPI(U)-Services4.590284.4286.8288.9291.1293.2296.0298.9301.2303.5305.9308.5311.2313.9316.6319.4322.1
  Miscellaneous CostsCPI(U)-AII Items4.790240.9242.1243.7245.8247.2249.1251.1252.4254.1256.1258.2260.0261.6268.6265.5267.3
4-Quarter Moving-Average Percent Change
Total—100.0003.83.83.83.73.53.33.13.02.92.92.93.03.13.23.33.2
 Compensation—70.6204.14.14.24.13.93.73.53.33.13.03.03.13.33.43.53.5
  Wages and SalariesAHE-Nursing Facilities63.0204.04.14.14.23.93.83.63.33.13.03.03.23.33.53.53.4
  Employee BenefitsBEA-Supplement to Wages/Salaries per Worker-7.6004.74.84.54.13.73.12.92.93.13.02.92.82.83.33.84.1
 Fuel and Other Energy4.2702.62.41.61.00.80.0-0.3-0.5-0.9-1.1-1.0-0.90.01.01.52.0
  Fuel Oil and CoalIPD-Fuel Oil and Coal1.660-0.2-0.9-2.0-2.0-1.4-1.7-1.4-1.3-2.1-2.7-3.3-4.1-3.1-1.6-0.80.3
  ElectricityIPD-Electricity1.2101.91.91.20.40.00.10.81.51.81.61.20.50.20.10.10.4
  Natural GasIPD-Natural Gas0.9106.26.45.63.72.1-0.5-2.9-4.2-5.2-5.1-3.7-1.70.82.83.94.1
  Water and Sewerage MaintenanceCPI(U)-Water and Sewage0.4905.45.25.25.25.04.64.03.53.13.23.64.24.95.15.15.1
 Food—9.7401.92.22.22.21.91.61.51.62.22.73.43.63.32.82.11.7
  Direct PurchasePPI-Processed Foods4.9301.62.12.21.91.20.4-0.20.11.22.33.63.93.02.11.00.6
  Contract ServiceCPI(U)-Food and Beverages4.8102.12.32.32.42.52.62.92.93.03.13.23.53.53.32.92.5
 All Other—15.3703.73.53.33.23.13.03.13.13.13.23.13.13.13.13.13.0
  PharmaceuticalsPPI-Prescription Drugs1.5004.54.23.93.53.22.72.42.42.52.93.13.02.82.52.21.9
  SuppliesCPI(U)-All Items3.2803.02.82.62.62.62.72.92.82.92.82.82.92.92.93.02.9
  Health ServicesCPI(U)-Physicians' Services1.2105.65.35.04.74.44.44.44.54.54.44.13.83.63.63.73.8
  Other Business ServicesCPI(U)-Services4.5903.83.83.73.53.33.23.23.33.43.43.43.33.33.43.43.5
  Miscellaneous CostsCPI(U)-AII Items4.7903.02.82.62.62.62.72.92.82.92.82.82.92.92.93.02.9

For data sources used to estimate the input price index relative weights and choice of price proxies, see the October 7, 1992, Federal Register.

Category weights may not sum to total because of rounding.

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding 2 or more categories. AHE is average hourly hourly earnings, BEA is Bureau of Economic Analysis, IPD is implicit price deflator from the Department of Commerce, CPI(U) is consumer price index for all urban consumers, and PPI represents producer price index. CY is calendar year. Q is quarter of year. An example of how a percent change is is shown in the Notes at the end of Table 9.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Fourth quarter 1995 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw-Hill

Table 11

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change of the Home Health Agency (HHA) Input Price Index, by Expense Category: 1993-97

Expense Category1Price/Wage VariableBase Year Weights CY 197621993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3Forecast
1995Q41996Q11996Q21996Q31996Q41997Q11997Q21997Q3
Index Levels
Total—100.000301.4303.3303.9307.9310.6313.7314.2317.3319.9321.6324.2327.9330.6332.8335.6339.3
 Compensation—73.040313.0315.1315.4319.5322.6326.0325.9329.8332.6334.4336.9341.0343.9346.3349.0353.2
  Wages and SalariesAHE- Hospitals65.140313.1315.0315.1319.6322.8326.1325.7329.9332.8334.6337.1341.3344.1346.2348.8353.1
  Employee BenefitsBEA-Supplement to Wages/Salaries per Worker7.900312.0316.0317.8318.8320.5324.9327.0329.1331.1332.9335.5338.9342.2346.9350.6354.0
TransportationCPI(U)-Transportation4.870239.9239.5241.6245.9248.3249.8254.5253.0253.5253.1258.0259.0261.8262.6267.8269.3
 Office CostsCPI(U)-Services2.790306.2308.8311.1313.5315.7318.7321.9324.3326.7329.4332.2335.0337.9340.9343.9346.9
 Medical and Nursing SuppliesCPI(U)-Medical Equipment/Supplies2.810259.0259.0258.9269.5270.4274.0274.8272.9276.2278.1282.6285.5287.5288.4292.4294.2
 Rental and LeasingCPI(U)-Residential Rent1.350248.0249.8250.8252.6254.3255.8257.2258.7260.6261.9263.0264.5266.1267.3269.3272.1
 Energy and Utilities—1.170260.8262.9262.7262.6261.4261.0260.6261.0256.9257.1259.8260.9262.0263.4264.6266.1
 Miscellaneous CostsCPI(U)-AII Items7.100256.4257.8259.4261.7263.2265.2267.4268.7270.5272.6274.9276.8278.7280.7282.6284.6
 Contract ServicesComposite-All Other Costs36.870301.4303.3303.9307.9310.6313.7314.2317.3319.9321.6324.2327.9330.6332.8335.6339.3
4-Quarter Moving-Average Percent Change
Total—100.0003.43.12.82.82.83.03.23.23.23.02.93.03.13.33.43.5
 Compensation—73.0403.53.12.82.82.93.03.23.33.33.13.13.13.23.43.53.5
  Wages and SalariesAHE-Hospitals65.1403.32.92.72.72.83.03.23.33.33.13.13.23.23.53.43.4
  Employee BenefitsBEA-Supplement to Wages/Salaries per Worker7.9004.74.84.54.13.73.12.92.93.13.02.92.82.83.33.84.1
TransportationCPI(U)-Transportation4.8703.02.62.42.83.03.64.34.03.62.91.91.82.12.73.33.7
 Office CostsCPI(U)-Services2.7903.83.83.73.53.33.23.23.33.43.43.43.33.33.43.43.5
 Medical and Nursing SuppliesCPI(U)-Medical Equipment/Supplies2.8103.33.12.12.32.73.65.14.43.82.71.92.83.23.84.03.6
 Rental and LeasingCPI(U)-Residential Rent1.3502.32.42.32.32.42.42.52.52.52.52.42.32.32.22.22.4
 Energy and Utilities—1.1702.72.51.71.10.80.1-0.3-0.5-1.0-1.2-1.0-0.90.01.01.62.1
 Miscellaneous CostsCPI(U)-AII Items7.1003.02.82.62.62.62.72.92.82.92.82.82.92.92.93.02.9
 Contract ServicesComposite-All Other Costs36.8703.43.12.82.82.83.03.23.23.23.02.93.03.13.33.43.5

For data sources used to estimate the input price index relative weights and choice of price proxies, see the July 8,1993, Federal Register. For the latest HHA regulation, see the February 14, 1995, Federal Register.

Category weights may not sum to total because of rounding.

The price/wage variable for Contract Services, Composite-All Other Costs, is the composite of all other HHA cost category weights and variables in the HHA input price index.

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding 2 or more categories. AHE represents Average Hourly Earnings, BEA represents Bureau of Economic Analysis, and CPI(U) represents Consumer Price Index for all urban consumers. CY is calendar year. Consumer Price Index for all urban consumers. Q designates quarter of year. An example of how a percent change is made is shown in the Notes at end of Table 9.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Fourth quarter 1995 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw-Hill.

Using the six series as indicators for monitoring the overall growth of personal health care spending, suggests that there is no evidence of any significant acceleration in health spending through the third quarter of 1995.

Background Information on Data Sources and Methods

Community Hospital Statistics

Since 1963, the American Hospital Association (AHA), in cooperation with member hospitals, has been collecting data on the operation of community hospitals through its National Hospital Panel Survey. Community hospitals, which comprised more than 80 percent of all hospital facilities in the United States in 1994, include all non-Federal, short-term general, and other special hospitals open to the public. They exclude hospital units of institutions; psychiatric facilities; tuberculosis, other respiratory, and chronic disease hospitals; institutions for the mentally retarded; and alcohol and chemical dependency hospitals. The survey samples approximately one-third of all U.S. community hospitals. The sample is designed to produce estimates of community hospital indicators by bed size and region (American Hospital Association, 1963-94). In Tables 1 and 2, statistics covering expenses, utilization, beds, and personnel depict trends in the operation of community hospitals annually for 1991-94 and quarterly for 1991 forward. For purposes of national health expenditures (NHE), survey statistics on revenues (not shown on Table 1) are analyzed in estimating the growth in the largest component of health care costs—community hospital expenditures. This one segment of NHE accounted for 36 percent of all health spending in 1993 (Levit et al., 1996). The survey also identifies important factors influencing expenditure growth patterns, such as changes in the number of beds in operation, numbers of admissions, length of stay, use of outpatient facilities, and number of surgeries.

Private Health Sector: Employment, Hours, and Earnings

The Bureau of Labor Statistics (BLS) collects monthly information on employment for all workers, and employment, earnings, and work hours for non-supervisory workers in a sample of approximately 340,000 establishments. Data are collected through cooperative agreements with State agencies that also use this information to create State and local area statistics. The survey is designed to collect industry-specific information on wage and salary jobs in non-agricultural industries. It excludes statistics on self-employed persons and on those employed in the military (U.S. Department of Labor, 1995). Employment in this survey is defined as number of jobs. Persons holding multiple jobs would be counted multiple times. Approximately 5 percent of the population hold more than one job at any one time. (Other surveys that are household-based, such as the Current Population Survey [CPS], also record employment. In the CPS, however, each person's employment status is counted only once, as either employed, unemployed, or not in the labor force.) Once each year, monthly establishment-based employment statistics are adjusted to benchmarks created from annual establishment census information, resulting in revisions to previously published employment estimates. The 1987 revision of the Standard Industrial Code (SIC) established Home Health Care Services as a separate industry, SIC 808. Prior to the 1987 revision, home health care was included in SIC 809, Allied Health Services, not elsewhere classified. Data on home health care services have been collected on the revised SIC basis since 1988. Tables 3, 4, and 5 present statistics on employment, non-supervisory employment, average weekly hours, and average hourly earnings for the private non-farm business sector and industries in health services.
Table 4

Percent Change in Employment, Hours, and Earnings in Private-Sector Health Service Establishments, by Selected Type of Esbalishment: 1991-95

Type of Establishment and MeasureCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Annual Percent ChangePercent Change From the Same Period of Previous Year
Total Employment
Non-Farm Private Sector-1.40.12.13.3-1.6-1.3-0.80.10.30.81.51.92.42.72.93.33.53.53.42.72.3
Health Services4.73.83.12.84.64.64.34.03.53.33.13.23.23.02.82.82.82.83.02.92.9
 Offices and Clinics of Physicians5.04.22.92.35.15.35.04.43.73.63.43.22.92.22.02.12.32.83.03.13.0
 Offices and Clinics of Dentists2.92.52.93.33.33.72.82.62.32.22.73.02.83.13.13.43.33.43.83.94.5
 Nursing Homes5.52.73.44.05.54.73.52.82.32.22.33.13.74.54.74.44.03.02.82.42.5
 Private Hospitals3.02.60.8-0.12.82.82.92.92.62.01.51.10.60.0-0.4-0.3-0.10.30.81.11.2
 Home Health Care Services18.515.517.918.416.516.516.015.514.815.516.216.519.320.321.020.217.815.213.09.69.0
Non-Supervisory Employment
Non-Farm Private Sector-1.60.42.53.6-1.7-1.3-0.60.40.61.22.02.32.73.13.23.73.83.83.62.92.4
Health Services4.73.73.02.64.64.64.23.93.53.23.03.13.02.82.62.72.62.72.92.83.0
 Offices and Clinics of Physicians4.64.02.42.24.74.94.84.23.53.43.02.72.41.61.92.02.22.72.62.83.0
 Offices and Clinics of Dentists3.12.12.83.23.73.82.52.11.81.92.72.92.82.93.13.43.03.23.63.74.6
 Nursing Homes5.42.83.33.95.44.63.62.92.42.32.33.13.64.34.54.23.93.02.82.52.5
 Private Hospitals3.22.70.6-0.43.03.03.03.02.62.11.51.00.4-0.3-0.7-0.6-0.40.20.71.11.2
 Home Health Care Services18.615.617.918.316.716.616.415.715.015.615.116.519.320.421.320.317.314.912.89.59.1
Average Weekly Hours
Non-Farm Private Sector-0.60.20.30.6-0.60.00.70.20.00.1-0.10.50.60.40.70.60.40.60.1-0.9-0.5
Health Services0.00.70.10.0-0.30.21.30.30.60.5-0.20.50.00.00.10.0-0.10.00.1-0.2-0.1
 Offices and Clinics of Physicians0.40.80.20.50.10.71.60.10.80.7-0.40.70.20.30.70.40.00.90.1-0.20.2
 Offices and Clinics of Dentists-0.40.2-0.3-0.5-1.1-0.60.7-0.40.40.1-1.30.7-0.2-0.20.1-0.7-0.8-0.5-0.7-0.9-1.0
 Nursing Homes0.10.5-0.30.3-0.5-0.20.80.10.80.3-0.70.4-0.3-0.70.20.0-0.21.00.60.20.7
 Private Hospitals0.00.60.50.2-0.10.51.20.40.40.40.50.50.50.50.50.20.1-0.1-0.2-0.2-0.6
 Home Health Care Services3.24.81.41.72.93.15.94.24.94.20.62.71.21.01.71.61.12.42.61.91.7
Average Hourly Earnings
Nonfarm Private Sector3.12.42.52.73.02.92.82.32.32.42.52.52.32.52.62.52.72.92.82.93.2
Health Services5.33.93.42.75.65.24.73.73.63.74.13.63.13.02.72.62.82.72.92.82.7
 Offices and Clinics of Physicians5.32.54.23.04.64.02.02.22.93.04.44.83.83.63.83.03.02.12.01.41.4
 Offices and Clinics of Dentists4.73.83.84.64.04.34.23.73.33.93.23.44.24.34.75.04.74.13.83.63.3
 Nursing Homes4.43.94.03.94.23.73.93.94.13.84.03.83.84.44.24.13.93.63.63.32.9
 Private Hospitals6.04.23.32.86.76.25.63.83.63.94.13.62.92.82.42.53.03.13.53.43.2
 Home Health Care Services7.86.64.12.57.77.47.27.66.25.55.03.74.23.52.62.72.32.32.52.12.0
Addenda: Hospital Employment
Total2.22.20.6-0.22.12.22.52.52.21.71.10.80.50.0-0.3-0.3-0.30.00.40.60.8
 Private3.02.60.8-0.12.82.82.92.92.62.01.51.10.60.0-0.4-0.3-0.10.30.81.11.2
 Federal0.80.5-0.4-0.21.32.22.21.0-0.2-1.0-1.9-1.10.41.01.70.5-1.1-1.9-2.9-1.60.4
 State-2.20.5-1.2-2.0-2.2-1.30.50.60.80.0-1.1-1.3-1.1-1.3-1.5-1.6-2.4-2.5-2.5-3.6-3.6
 Local1.11.81.30.31.11.01.61.81.92.01.61.51.30.70.50.20.10.51.11.61.7

Excludes hospitals, clinics, and other health-related establishments run by all governments.

NOTES: Data presented here conform to the 1987 Standard Industrial Classification. Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1991-December 1995.

Table 5

Percent Change in Implied Non-Supervisory Payrolls, Employment, Average Weekly Hours, and Average Hourly Earnings in Private-Sector Health Service Establishments, by Selected Type of Establishment: 1991-95

Type of Establishment and MeasureCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Annual Percent ChangePercent Change From the Same Period of Previous Year
Health Services
Payrolls10.38.56.65.410.110.210.68.17.87.67.07.36.25.85.55.35.45.56.05.55.6
 Employment4.73.73.02.64.64.64.23.93.53.23.03.13.02.82.62.72.62.72.92.83.0
 Average Weekly Hours0.00.70.10.0-0.30.21.30.30.60.5-0.20.50.00.00.10.0-0.10.00.1-0.2-0.1
 Average Hourly Earnings5.33.93.42.75.65.24.73.73.63.74.13.63.13.02.72.62.82.72.92.82.7
Offices and Clinics of Physicians
Payrolls10.67.56.95.89.69.98.66.67.47.37.18.56.55.66.55.55.25.84.84.04.7
 Employment4.64.02.42.24.74.94.84.23.53.43.02.72.41.61.92.02.22.72.62.83.0
 Average Weekly Hours0.40.80.20.50.10.71.60.10.80.7-0.40.70.20.30.70.40.00.90.1-0.20.2
 Average Hourly Earnings5.32.54.23.04.64.02.02.22.93.04.44.83.83.63.83.03.02.12.01.41.4
Offices and Clinics of Dentists
Payrolls7.56.26.57.46.77.67.65.55.56.04.67.26.97.18.17.87.06.96.86.47.1
 Employment3.12.12.83.23.73.82.52.11.81.92.72.92.82.93.13.43.03.23.63.74.6
 Average Weekly Hours-0.40.2-0.3-0.5-1.1-0.60.7-0.40.40.1-1.30.7-0.2-0.20.1-0.7-0.8-0.5-0.7-0.9-1.0
 Average Hourly Earnings4.73.83.84.64.04.34.23.73.33.93.23.44.24.34.75.04.74.13.83.63.3
Nursing Homes
Payrolls10.17.47.18.39.38.38.57.17.56.55.67.47.28.29.18.47.77.77.16.16.2
 Employment5.42.83.33.95.44.63.62.92.42.32.33.13.64.34.54.23.93.02.82.52.5
 Average Weekly Hours0.10.5-0.30.3-0.5-0.20.80.10.80.3-0.70.4-0.3-0.70.20.0-0.21.00.60.20.7
 Average Hourly Earnings4.43.94.03.94.23.73.93.94.13.84.03.83.84.44.24.13.93.63.63.32.9
Private Hospitals
Payrolls9.47.64.52.59.89.910.17.36.76.46.15.23.83.02.22.12.73.24.14.33.9
 Employment3.22.70.6-0.43.03.03.03.02.62.11.51.00.4-0.3-0.7-0.6-0.40.20.71.11.2
 Average Weekly Hours0.00.60.50.2-0.10.51.20.40.40.40.50.50.50.50.50.20.1-0.1-0.2-0.2-0.6
 Average Hourly Earnings6.04.23.32.86.76.25.63.83.63.94.13.62.92.82.42.53.03.13.53.43.2
Home Health Care Services
Payrolls31.829.324.523.029.429.132.229.728.126.921.624.025.925.826.525.421.320.318.613.913.2
 Employment18.615.617.918.316.716.616.415.715.015.615.116.519.320.421.320.317.314.912.89.59.1
 Average Weekly Hours3.24.81.41.72.93.15.94.24.94.20.62.71.21.01.71.61.12.42.61.91.7
 Average Hourly Earnings7.86.64.12.57.77.411.37.66.25.55.03.74.23.52.62.72.32.32.52.12.0
Non-Farm Private Sector
Payrolls0.93.15.47.00.61.52.92.92.83.74.55.45.76.06.76.97.07.46.64.95.1
 Employment-1.60.42.53.6-1.7-1.3-0.60.40.61.22.02.32.73.13.23.73.83.83.62.92.4
 Average Weekly Hours-0.60.20.30.6-0.60.00.70.20.00.1-0.10.50.60.40.70.60.40.60.1-0.9-0.5
 Average Hourly Earnings3.12.42.52.73.02.92.82.32.32.42.52.52.32.52.62.52.72.92.82.93.2

Excludes hospitals, clinics, and other health-related establishments run by all governments.

NOTES: Data presented here conform to the 1987 Standard Industrial Classification. Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1990-December 1995.

National Economic Indicators

National economic indicators provide a context for understanding health-specific indicators and how change in the health sector relates to change in the economy as a whole. Table 6 presents national indicators of output and inflation. Gross domestic product (GDP) measures the output of U.S. economy as the market value of goods and services produced within the geographic boundaries of the United States by U.S. or foreign citizens or companies. Constant dollar or “real” GDP removes the effects of price changes from the valuation of goods and services produced, so that the growth of real GDP reflects changes in the “physical quantity” of the output of the economy. In the most recent comprehensive revision of the National Income and Product Accounts the method for removing the effects of price changes was altered. The GDP estimates are now deflated using “chain-weighted” price indexes. This method replaces the previous fixed-weighted method of deflating the GDP estimates. (U.S. Department of Commerce, 1995).

Prices

Consumer Price Indexes

BLS publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services. Tables 6, 7, and 8 present information on the all urban consumer price index (CPI) that measures changes in prices faced by 80 percent of the non-institutionalized population in the United States. (The more restrictive wage earner CPI gauges prices faced by wage earners and clerical workers. These workers account for 32 percent of the non-institutionalized population [U.S. Department of Labor, 1995].)
Table 8

Percent Change in Medical Prices From Same Period A Year Ago: 1991-95

ItemCalendar Year1991Q31991Q41992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3
1991199219931994
Annual Percent ChangePercent Change From the Same Period of Previous Year
Consumer Price Indexes, All Urban Consumers1
Medical Care Services28.97.66.55.28.58.07.97.87.57.26.86.86.46.05.45.15.05.25.55.25.0
 Professional Services6.26.15.14.35.96.06.26.26.05.85.45.35.04.54.34.24.14.54.74.44.4
  Physicians' Services6.06.35.64.45.55.55.96.56.46.35.95.75.65.24.84.54.24.34.54.54.6
  Dental Services7.56.75.34.87.88.17.46.96.56.15.86.04.94.54.44.54.85.45.74.94.8
 Hospital and Related Services10.29.18.45.99.88.99.09.49.19.08.78.88.37.86.75.85.75.45.35.04.8
  Hospital Room9.48.88.55.78.98.48.38.89.09.08.89.08.47.86.65.65.55.05.35.14.9
  Other Inpatient Services (1986=100)10.79.17.86.110.28.99.39.59.18.47.88.07.67.66.86.35.95.75.55.04.8
  Outpatient Services (1986=100)10.610.09.35.810.79.89.810.19.710.210.110.09.18.06.55.45.75.75.24.94.
Medical Care Commodities8.26.43.72.98.47.87.77.15.75.24.33.43.73.32.93.02.83.02.51.71.5
 Prescription Drugs9.97.63.93.410.19.89.38.56.56.05.03.33.83.33.04.03.23.42.41.51.9
 Non-Prescription Drugs and Medical Supplies (1986=100)4.73.93.31.95.03.74.24.13.93.43.03.53.43.32.60.92.02.12.82.30.7
 Internal and Respitory Over-the-Counter Drugs4.53.83.31.55.02.63.34.34.03.73.33.23.43.53.01.30.80.91.10.30.5
  Non-Prescription Medical Equipment and Supplies5.04.13.32.75.05.86.23.93.62.72.44.03.53.11.90.14.24.45.86.11.3
Producer Price Indexes3
Industry Groupings:4
 Health Services (12/94=100)—————————————————————
  Offices and Clinics of Doctors of Medicine (12/93=100)——————————————————4.54.34.0
   Medicare Treatments (12/93=100)——————————————————4.74.74.7
   Non-Medicare Treatments (12/93=100)——————————————————4.54.33.6
  Hospitals (12/92=100)———3.6——————————3.83.63.63.54.03.73.1
   General Medical and Surgical Hospitals (12/92=100)———3.5——————————3.53.53.53.44.03.83.2
    Inpatient Treatments (12/92=100)———3.5——————————3.73.63.53.13.43.22.5
     Medicare Patients (12/92=100)———2.0——————————2.32.32.31.31.31.31.3
     Medicaid Patients (12/92=100)———4.6——————————4.34.75.04.54.03.41.5
     All Other Patients (12/92=100)———4.0——————————4.34.13.83.94.44.23.3
    Outpatient Treatments (12/92=100)———4.1——————————3.43.74.44.76.66.35.9
     Medicare Patients (12/92=100)———3.1——————————2.32.63.04.64.54.84.0
     Medicaid Patients (12/92=100)———1.7——————————1.1-0.32.73.13.84.60.6
     All Other Patients (12/92=100)———4.4——————————3.84.34.84.87.26.76.7
  Skilled and Intermediate Care Facilities (12/94=100)—————————————————————
   Public Payors (12/94=100)—————————————————————
   Private Payors (12/94=100)—————————————————————
  Medical Laboratories (6/94=100)————————————————————6.8
Commodity Groupings:
 Drugs and Pharmaceuticals6.95.34.52.57.86.96.25.54.74.85.44.64.43.73.02.62.12.31.92.22.3
  Ethical (Prescription) Preparations8.46.54.53.28.98.47.76.56.15.75.24.74.43.83.93.42.72.81.82.32.9
  Proprietary (Over-the-Counter) Preparations5.55.03.71.87.15.15.55.04.15.35.13.23.72.82.21.81.61.62.32.21.2
 Medical, Surgical, and Personal Aid Devices2.32.73.01.82.32.02.62.82.52.93.23.22.82.62.11.62.01.60.50.40.4
  Personal Aid Equipment2.92.61.76.41.93.83.83.62.80.42.22.01.31.24.36.77.47.42.60.71.9
  Medical Instruments and Equipment (6/82=100)1.52.22.10.51.51.22.22.32.12.42.32.51.91.90.80.10.80.61.11.11.7
  Surgical Appliances and Supplies (6/83=100)3.53.14.13.13.22.62.73.12.93.54.54.34.13.73.63.13.32.4-0.8-1.0-1.5
  Ophthalmic Goods (12/83=100)0.91.70.90.60.81.71.82.32.00.70.70.50.81.41.40.50.10.31.42.12.9
  Dental Equipment and Supplies (6/85=100)1.94.53.82.92.92.65.14.43.94.53.54.94.12.92.92.43.03.11.62.20.7

Unless otherwise noted, base year is 1982-84=100.

Includes the net cost of private health insurance, not shown separately.

Unless otherwise noted, base year is 1982=100. Producer price indexes are classified by industry (price changes received for the Industry's output sold outside the industry) and commodity (price changes by similarity of end use or material composition).

Further detail for producer price industry groupings, such as types of physician practices, hospital DRG groupings, etc., are available from Bureau of Labor Statistics.

NOTES: Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCES: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office.

Monthly reports for January 1991-September 1995; U.S. Department of Labor, Bureau of Labor Statistics: Producer Price Indexes. Washington. U. S. Government Printing Office. Monthly reports for January 1991-September 1995.

The index reflects changes in prices charged for the same quality and quantity of goods or services purchased in the base period. For most items, the base period of 1982-84 is used to define the share of consumer expenditures purchasing specific services and products. Those shares or weights remain constant in all years, even though consumption patterns of the household may change over time. This type of index is called a fixed weight or Laspeyres index. CPIs for health care goods and services depict list price changes for out-of-pocket expenditures and health insurance premium payments made directly by consumers. The composite CPI for medical care weights together product-specific or service-specific CPIs in proportion to household out-of-pocket expenditures for these items. In addition, some medical care sector indexes measure changes in list or charged prices, rather than in prices actually received by providers after discounts are deducted. In several health care areas, received or transaction prices are difficult to capture, although BLS is making advances in this area. In the NHE, a combination of CPIs for selected medical care items, input price indexes for nursing homes, and the Producer Price Index for hospitals are used as measures of inflation for the health industry. The indexes are used to develop a chain weighted price index for personal health care to depict price changes affecting the entire health care industry more accurately than does the overall CPI medical care index (Levit et al., 1996).

Producer Price Indexes

BLS produces monthly information on average changes in selling prices received by domestic producers for their output. These prices are presented in Tables 6, 7, and 8 as the Producer Price Index (PPI). The index is designed to measure transaction prices, and is different from the CPI, which in some cases measures list or full charge prices. The PPI is a fixed-weight or Laspeyres index, with base period weights determined by values of receipts. The base period varies among series. The PPI consists of indexes in several major classification structures, including the industry and commodity classifications that are included in the Health Care Indicators. The PPI by industry classification measures price changes received for the industry's output sold outside the industry. PPI changes for an industry are determined by price changes for products primarily made by establishments in that industry. The industry into which an establishment is classified is determined by those products accounting for the largest share of its total value of shipments. The PPI by commodity classification measures price changes of the end product (end use or material composition). The classification system for PPI commodity groups is unique to the PPI, and is divided into fifteen major commodity groupings. Althouth PPIs for medical commodities have existed for numerous years, PPIs for health service industries are relatively new. Most index series began in 1994, and the index series for the composite health services industry does not begin until December 1994. However, the PPI for hospitals began in December 1992, providing enough data for a useful time series. The PPI for hospitals is a measure of transaction prices, or net prices received by the producer from out-of-pocket, Medicare, Medicaid, and private third party payor sources. The PPI for hospitals should not be compared with the CPI for hospital and related services. Although other PPI and CPI series are somewhat comparable (for example, the PPI-office and clinics of doctors of medicine and the CPI-physicians' services), the PPI and CPI for hospitals have important differences in survey scope and methodology. The PPI for hospitals measures price changes for the entire treatment path, measures net transaction price, includes Medicare and Medicaid, samples both urban and rural hospitals, and reflects total hospital revenue from all sources in its index weights. On the other hand, the CPI for hospitals measures price changes for a discrete sample of hospital services singly, measures published charges, excludes Medicare and Medicaid, samples only urban hospitals, and reflects only consumer out-of-pocket expenses and household health insurance premium payments in its index weights. These differences make a direct comparison between the PPI and CPI hospital services indexes inappropriate. The PPI for the health services industry is available by detailed industry groupings. For example, general medical and surgical hospitals consist of inpatient and outpatient treatments, which in turn consist of Medicare, Medicaid, and all other patients. These patient categories consist of more detail, such as DRG groupings for Medicare. Although most of the data used to measure PPI price changes for health services are collected through a sample, there are specific instances where data are collected from both a sample and from Federal Regulation. This is the case for Medicare hospital inpatient services and Medicare offices and clinics of doctors of medicine. The producer price changes in Medicare hospital inpatient services are computed from a combination of a national sample of DRGs in hospitals, DRG relative weights from the PPS final rules published in the current and historical year, and other adjustments. The producer price changes in Medicare offices of doctors of medicine are computed from a combination of a geographic area sample of payments under the HCFA Common Procedure Coding System (HCPCS), HCPCS updates from the December 8, 1994 Federal Register, and other adjustments. Because of different methodologies, these two PPIs are not comparable with the national updates computed by HCFA and published in the Federal Register.

Input Price Indexes

In 1979, HCFA developed the Medicare hospital input price index (hospital market basket) which was designed to measure the pure price changes associated with expenditure changes for hospital services. In the early 1980s, the skilled nursing facility (SNF) and home health agency (HHA) input price indexes, often referred to as “market baskets,” were developed to price a consistent set of goods and services over time. Also in the early 1980s, the original Medicare hospital input price index was revised for use in updating payment rates for the prospective payment system (PPS). All of these indexes have played an important role in helping to set Medicare payment percent increases, and in understanding the contribution of input price increases to growing health expenditures. The input price indexes, or market baskets, are Laspeyres or fixed-weight indexes that are constructed in two steps. First, a base period is selected. For example, for the PPS hospital input price index, the base period is 1987. Cost categories, such as food, fuel, and labor, are identified and their 1987 expenditure amounts determined. The proportion or share of total expenditures included in specific spending categories is calculated. These proportions are called cost or expenditure weights. There are 28 expenditure categories in the 1987-based PPS hospital input price index. Second, a price proxy is selected to match each expenditure category. Its purpose is to measure the rate of price increases of the goods or services in that category. The price proxy index for each spending category is multiplied by the expenditure weight for the category. The sum of these products (weights multiplied by the price index) over all cost categories yields the composite input price index for any given time period, usually a fiscal year or a calendar year. The percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider. The input price indexes are estimated on a historical basis and forecasted out several years. The HCFA-chosen price proxies are forecasted under contract with Data Resources, Inc./McGraw Hill (DRI). Following every calendar year quarter, in March, June, September, and December, DRI updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions. Some of the data in Tables 9 through 11 are forecasted and are expected to change as more recent historical data become available and subsequent quarterly forecasts are revised. The methodology and price proxy definitions used in the input price indexes are described in the Federal Register notices that accompany the revisions of the PPS, HHA, and SNF cost limits. A description of the current structure of the PPS input price index was published in the September 4, 1990, Federal Register. The most recent PPS update for payment rates was published in the September 1, 1995, Federal Register. The latest HHA regulatory input price index was published in the February 14, 1995, Federal Register, and the latest SNF input price index was published in the October 7, 1992, Federal Register (also see the June 6,1994, Federal Register).
Table 9

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the Prospective Payment System (PPS) Hospital Input Price Index, by Expense Category: 1993-97

Expense Category1Price/Wage VariableBase Year Weights FY198721993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q3Forecast
1995Q41996Q11996Q21996Q31996Q41997Q11997Q21997Q3
Index Levels
Total—100.00130.1131.0131.6132.7133.6134.8135.9136.8137.4138.6139.5140.8141.6142.7143.5144.8
 Compensation—61.713133.6134.9135.7136.8137.6138.5139.3140.2141.2142.4143.3144.8145.9147.1147.9149.5
  Wages and SalariesHCFA Occupational Wage Index452.216130.9131.8132.7133.7134.6135.5136.2137.1138.1139.3140.1141.6143.0144.0144.8146.4
  Employee BenefitsHCFA Occupational Benefits Index49.497148.9151.6152.1153.6154.0155.1156.3157.0158.1159.7160.7162.3163.4165.2166.1168.0
 Other Professional FeesECI-W/S: Professional/Technical (Private)1.649131.0132.0132.9133.9134.8135.6136.3137.3138.2139.3140.3141.9143.0144.0144.8146.4
 Energy and Utilities3—2.368113.0109.6110.1114.3109.3107.4111.6111.4107.8107.0110.3112.7111.0109.8112.2114.6
 Professional Liability InsuranceHCFA-Professional Liability Premium1.433140.6137.5136.3135.9136.2137.0137.3138.1139.4140.9142.2143.5145.0146.5148.0149.7
 All Other—32.837124.1124.8125.2126.1127.6129.8131.3132.3132.5133.5134.4135.0135.6136.6137.3137.9
 Other Products3—21.788123.8124.3124.8126.7127.6129.9131.7133.0132.8133.8134.6135.1135.5136.4136.9137.3
  PharmaceuticalsPPI-Prescription Drugs3.873159.4161.9163.1163.1163.9164.8166.8167.8168.9170.3172.0172.3172.3174.0175.0175.5
  Food3—3.299119.1120.1120.2119.8119.7120.8120.7122.1123.6124.9125.6126.0125.8126.9127.8128.7
  ChemicalsPPI-Industrial Chemicals3.126117.3115.8118.3123.9130.4136.0140.2140.4136.1137.1137.8138.3138.6139.2139.2139.2
  Medical InstrumentsPPI-Medical Instruments/Equipment2.672115.8116.0116.1116.3116.4117.3117.4118.5118.2119.1119.6118.9119.3120.1120.5120.4
  Photographic SuppliesPPI-Photographic Supplies2.623113.5114.6113.7112.4112.3113.6114.5117.0116.1117.3118.1119.6121.0122.2122.3122.9
  Rubber and PlasticsPPI-Rubber/Plastic Products2.323114.1113.9114.1115.3117.9120.3122.1122.7122.8122.7123.0123.6123.6123.6123.9124.5
 Other Services3—11.050124.7126.0126.1126.8127.7129.6130.5130.9131.8133.0134.0134.9135.9137.1138.2139.1
  Business ServicesAHE-Business Services3.845122.4124.8123.9124.4125.2128.0128.7129.3130.2132.2133.0133.7134.9136.8137.5138.2
  Computer ServicesAHE-Data Processing Services1.992138.8140.9141.3142.2143.7145.0146.3146.8148.3149.6150.4152.1153.4154.7156.2157.7
4-Quarter Moving-Average Percent Change
Total—100.002.92.72.52.52.52.62.93.03.13.02.92.82.82.92.92.9
 Compensation—61.7133.53.33.23.13.12.92.82.72.62.62.72.93.13.23.33.3
  Wages and SalariesHCFA Occupational Wage Index452.2163.13.03.02.92.92.82.82.72.62.62.72.93.13.23.33.3
  Employee BenefitsHCFA Occupational Benefits Index49.4975.34.94.44.24.03.43.12.72.52.72.73.03.13.23.43.4
 Other Professional FeesECI-W/S: Professional/Technical (Private)1.6493.33.13.02.92.92.82.72.72.62.62.72.93.13.33.33.3
 Energy and Utilities3—2.368-0.3-2.0-4.0-3.4-3.4-3.1-1.3-1.6-1.2-0.8-1.4-0.50.61.42.12.3
 Professional Liability InsuranceHCFA-Professional Liability Premium1.4333.02.31.1-0.3-1.8-1.9-1.3-0.31.11.92.63.23.63.94.04.1
 All Other—32.8371.91.81.71.72.02.53.44.14.44.13.52.82.42.32.22.3
 Other Products3—21.7881.71.61.41.41.82.63.74.75.04.63.82.72.21.91.81.8
  PharmaceuticalsPPI-Prescription Drugs3.8734.54.23.93.53.22.72.42.42.52.93.13.02.82.52.21.9
  Food3—3.2991.72.02.01.81.40.90.60.91.52.33.23.53.12.62.11.8
  ChemicalsPPI-lndustrial Chemicals3.1261.10.1-0.80.53.58.213.115.113.28.93.90.4-0.20.00.71.3
  Medical InstrumentsPPI-Medical Instruments/Equipment2.6722.11.71.10.90.50.60.91.21.41.51.71.31.21.00.70.9
  Photographic SuppliesPPI-Photographic Supplies2.623-1.1-0.30.20.40.3-0.4-0.40.71.82.83.43.03.23.53.63.7
  Rubber and PlasticsPPI-Rubber/Plastic Products2.3230.80.70.60.71.42.74.35.65.84.93.31.91.00.70.70.7
 Other Services3—11.0502.22.32.32.22.32.32.73.03.23.12.92.92.93.03.13.1
  Business ServicesAHE-Business Services3.8451.51.81.71.71.92.02.63.23.63.73.63.53.43.53.53.5
  Computer ServicesAHE-Data Processing Services1.9924.14.74.54.44.13.53.43.33.23.33.13.23.33.33.63.6

For data sources used to estimate the input price index relative weights and choice of price proxies, see the September 4,1990. 1990, Federal Register. For the most recent PPS update for payment rates, see the September 1,1995, Federal Register.

Category weights may not sum to total or subtotals because of detail not included.

Represents a subtotal. Detailed categories not shown are listed below by subtotal, detailed category, and base year weight: Energy and Utilities: Fuel Oil, Coal, and Other Fuel Electricity (1.135), Natural Gas (0.343), and Motor Gasoline (0.230). Other Products: Paper products (1.399), Apparel (1.142), Machinery and Equipment (0.0497), and Miscellaneous Products (0.833). Food: Direct Purchase (2.111) and Contract Service, Other Senvices: Transportation and Shipping (1.233), Telephone (0.987), Blood Services (0.588), Postage (0.372), Other-Labor Intensive (1.233) and Other Non-Labor Intensive (0.800).

The HCFA Occupational Wage and Occupational Benefit Indexes are computed as the weighted-average of 10 ECI categories (ECI for Hospital workers and 9 ECI occupational categories).

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding 2 or more categories. ECI is employment cost index. PPI is producer price index, and AHE is average hourly earnings. HCFA is Health Care Financing Administration. W/S is wages and salaries FY is fiscal year. Q is quarter of year. The 4-quarter moving-average percent change for the quarter indicated by the columns is the rate of change in the average index level for 4-quarters ending in that quarter over the same period of the previous year. The 4-quarter moving-average index level for the quarter indicated by the column heading is computed by summing the index level for that quarter and the prior 3 quarters and dividing by 4. The process is repeated to compute the 4-quarter moving avaerage index level for the same quarter one year ago. The average index level for the quarter indicated by the column heading is divided by the average index level of the same quarter a year ago and the quotient is subtracted from 1 and multiplied by 100 to determine the 4-quarter moving-average percent change in the Index

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Fourth quarter 1995 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw-Hill.

Periodically, the input price indexes are revised to a new base year so that cost weights will reflect changes in the mix of goods and services that are purchased. Each revision allows for new base weights, a new base year, and changes to certain price variables used for price proxies. Each input price index is presented in a table with both an index level and a 4-quarter moving-average percent change. The hospital input price index for PPS is in Table 9, the SNF input price index is in Table 10, and the HHA input price index is in Table 11.

Medicare Economic Index

In 1972, Congress mandated the development of the Medicare Economic Index (MEI) to measure the changes in costs of physicians' time and operating expenses. The input price change measured by the MEI is considered in connection with the update factor for the Medicare Part B physician fee schedule under the Resource-Based Relative Value Scale (RBRVS, November 25, 1992 Federal Register and December 8, 1995 Federal Register), or is used as an advisory indicator by Congress in updating the fee schedule. The MEI is a fixed-weighted sum of annual price changes for various inputs needed to produce physicians' services with an offset for productivity increases. Like a traditional Laspeyres index, the MEI is constructed in two steps. First, a base period is selected (1989 for the MEI), cost categories are identified, and the 1989 expenditure amounts by cost category are determined. Second, price proxies are selected to match each expenditure category. These proxies are weighted by the category weight determined from expenditure amounts, and summed to produce the composite MEI. Unlike a traditional Laspeyres index, the compensation portion of the MEI is adjusted for productivity so both economy-wide productivity and physician practice productivity are not both included in the update, resulting in a double counting of productivity. Forecasts of the MEI are made periodically throughout the fiscal year by DRI/McGraw-Hill for HCFA using several different sets of economic assumptions. DRI/McGraw-Hill produces 4 main forecasts of the MEI: a Presidential budget forecast in December and the Mid-Session Review in June based on assumptions for the Federal budget exercises, the Medicare Trustees Report forecast in February based on assumptions by the Medicare Trustees, and the Medicare Premium Promulgation forecast in August based on baseline assumptions by DRI/McGraw-Hill. DRI/McGraw-Hill also produces forecasts of the MEI using their own economic assumptions forecast. The forecasts based on DRI/McGraw-Hill assumptions are presented in Health Care Indicators. Much of the forecasted data changes as more recent historical data becomes available and the assumptions change. The methodology, weights, and price proxy definitions used in the MEI are described in the November 25, 1992, Federal Register. The MEI data is presented in Table 12 as index levels and 4-quarter moving average percent changes.
  1 in total

1.  National health expenditures, 1994.

Authors:  K R Levit; H C Lazenby; L Sivarajan; M W Stewart; B R Braden; C A Cowan; C S Donham; A M Long; P A McDonnell; A L Sensenig; J M Stiller; D K Won
Journal:  Health Care Financ Rev       Date:  1996
  1 in total

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