Literature DB >> 10170351

Hospital, employment, and price indicators for the health care industry: third quarter 1996.

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

Abstract

Entities:  

Mesh：

Year:  1997        PMID： 10170351      PMCID： PMC4194512     

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


× No keyword cloud information.
Hospital admissions and the number of inpatient hospital days both fell in the third quarter, indicating the trend toward decreased inpatient hospital use is continuing. The decline in the number of staffed hospital beds accelerated in 1996, particularly in the third quarter, while hospital occupancy rates continue to fall. Hospitals continue to shed excess capacity too slowly to avert the ongoing slide in occupancy rates. Outlays from the Medicare trust funds grew less rapidly in the fiscal year ending in September 1996 than in the preceding fiscal year. However, the assets in the Hospital Insurance (HI) trust fund fell in fiscal year 1996 for the second straight year. Medical price growth, as measured by the Consumer Price Index (CPI), continued to decelerate in the third quarter of 1996, converging near overall price growth. Growth in the CPI for physicians' services and growth in the Producer Price Index (PPI) for offices of doctors of medicine have decelerated rapidly since 1995. Inpatient hospital consumer and producer price growth continued to decelerate in the third quarter of 1996, the result of slower price growth for private payers.

Introduction

This article presents statistics on health care use, 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 nine 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 1 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, annual index levels, and annual percent changes in the Input Price Indexes maintained by HCFA. Beginning with this issue of the Review, the Prospective Payment System (PPS) Hospital Input Price Index has been rebased from fiscal year (FY) 1987 to FY 1992, and the Home Health Agency (HHA) Input Price Index has been rebased from calendar year (CY) 1976 to CY 1993. The annual percent changes and the four-quarter moving average percent changes for input prices are calculated using the same procedure, namely averaging the four quarters ending with the fourth calendar quarter of the current year and dividing by the average of the four calendar quarters of the preceding year.

Community Hospital Statistics

Statistics on community hospital operations from the American Hospital Association (AHA) for the third quarter of 1996 show that declining hospital use is putting increasing pressure on community hospitals' inpatient revenues. Declining admissions and shortened hospital stays in the third quarter contributed to lower occupancy rates, despite a marked acceleration in the ongoing drop in the number of staffed beds. No evidence has emerged of an acceleration in spending for hospital care through the third quarter of 1996. AHA panel survey data through the third quarter of 1996 show a deceleration in hospital revenue growth attributable to the “current environment, which has been characterized by significant increases in managed care enrollment and continued pressure to reduce costs” (American Hospital Association, 1997). Hospital admissions have declined in each of the first three quarters of 1996, measured from the same period in the previous year. This decline in each of the first three quarters of 1996 follows a period of increasing admissions that began in the third quarter of 1993. The recent decline in total admissions has been driven by the decline in admissions for the population under 65 years of age. Hospital admissions for this age cohort have been declining since the fourth quarter of 1995. Hospital admissions per 1,000 population, another statistic presented in Tables 1 and 2, in effect represents the rate at which patients are hospitalized. A decline in these time series shows not only that admissions have decreased, but that the rate at which patients are being hospitalized has declined. The trend in hospital admissions per 1,000 population for the cohort 65 years of age or over has changed during the first three quarters of 1996. As shown in Figure 1, admissions per 1,000 population for this age group declined for the first three quarters of 1996, compared with the first three quarters of the previous year, the first such decline since 1991.
Table 1

Selected Community Hospital Statistics: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Use
All Ages
 Admissions in Thousands32,41132,65232,93833,3898,0838,1338,3688,1808,1548,2368,6348,2818,2138,2608,5118,2678,159
 Admissions Per 1,000 Population1121121121122120120123120120121126121119120123119118
 Inpatient Days in Thousands206,440202,078196,117190,37749,08949,61151,70948,64847,65748,10250,37747,29646,23946,46748,05145,53244,349
 Adult Length of Stay in Days6.46.26.05.76.16.16.25.95.85.85.85.75.65.65.65.55.4
65 Years of Age or Over
 Admissions in Thousands11,86012,20912,45612,8202,9443,0853,2113,0983,0223,1253,3793,1873,0713,1843,3243,2043,090
  Admissions per 1,000 Population1360366369375352368382367357368397374359371387372358
 Inpatient Days in Thousands98,92097,04294,87791,16422,99023,95625,55123,49322,63123,20324,77822,82321,50722,05622,97221,44520,448
 Adult Length of Stay in Days8.37.97.67.17.87.88.07.67.57.47.37.27.06.96.96.76.6
Under 65 Years of Age
 Admissions in Thousands20,55120,44320,48320,5695,1395,0475,1585,0825,1325,1115,2555,0945,1435,0775,1875,0635,070
  Admissions per 1,000 Population18887868587858785868588858584868483
 Inpatient Days in Thousands107,520105,036101,24099,21326,09925,65526,15825,15525,02724,89925,59824,47224,73224,41125,07824,08723,902
 Adult Length of Stay in Days5.25.14.94.85.15.15.15.04.94.94.94.84.84.84.84.84.7
Surgical Operations in Thousands22,46322,71023,28623,7395,6775,6655,6645,8645,8405,9186,0285,9655,8325,9155,9486,0876,028
Outpatient Visits in Thousands366,243390,188417,684452,5599,21298,66298,341104,079107,022108,241111,088113,699113,332114,438116,335119,874122,232
Adjusted Patient Days in Thousands2281,525278,938276,209273,63868,35168,86071,24468,77667,71168,36371,22668,14667,07967,10669,23267,39466,247
Beds in Thousands908902891874901897895893888886881877871867862859849
Adult Occupancy Rate362.161.460.359.759.260.164.259.858.359.063.559.357.758.261.258.356.8
Total Hospital Revenues in Millions4$275,430$295,035$309,354$324,961$73,697$74,536$76,480$76,829$77,069$78,976$81,793$81,020$80,307$81,842$84,280$84,396$83,449
 Total Patient Revenues in Millions262,034280,414293,285307,22869,98570,70972,70272,86873,01874,69777,47676,55775,95677,23879,71079,34978,461
  Inpatient Revenues in Millions192,163203,167208,262213,77150,26250,94352,76751,54351,39352,55954,79753,13352,35853,48355,32253,60952,526
  Outpatient Revenues in Millions69,87077,24885,02393,45719,72319,76619,93521,32521,62522,13822,67923,42423,59923,75524,38725,74025,934
Total Expenses
Total Hospital Expenses in Millions$260,994$278,880$292,801$308,411$70,002$71,106$71,677$72,618$73,468$75,039$76,259$76,751$76,808$78,594$79,361$79,958$79,593
 Labor in Millions140,112149,733156,826163,84237,57838,12338,42038,82839,40840,17040,52940,76840,85741,68841,87341,93541,925
 Non-Labor in Millions120,882129,147135,975144,56932,42432,98333,25733,79034,05934,86935,73035,98335,95136,90637,48838,02337,668
Inpatient Expense in Millions5$191,385$202,035$207,897$214,570$50,274$51,229$52,023$51,366$51,709$52,800$53,936$53,268$52,945$54,421$55,081$54,020$53,284
 Amount per Patient Day9271,0001,0601,1271,0241,0331,0061,0561,0851,0981,0711,1261,1451,1711,1461,1861,201
 Amount per Admission5,9056,1886,3126,4266,2206,2996,2176,2796,3416,4116,2476,4326,4466,5886,4726,5346,530
Outpatient Expense in Millions5$69,609$76,845$84,903$93,841$19,728$19,877$19,654$21,252$21,758$22,239$22,323$23,483$23,863$24,172$24,281$25,937$26,309
 Amount per Outpatient Visit190197203207199201200204203205201207211211209216215

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 multiplying the number of outpatient visits by the ratio of outpatient revenue per outpatient visit to inpatient revenue per inpatient day, and adding the product to the number of inpatient days.

The adult occupancy rate is calculated by the Office of National Health Statistics. The AHA does not publish this statistic. Adult occupancy rate is the ratio of average daily census to 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 of inpatient revenue and outpatient revenue.

Inpatient Expense and Outpatient Expense are calculated by the Office of National Health Statistics. These statistics are calculated by applying the ratio of inpatient or outpatient revenue to total patient revenue multiplied by total hospital expenses.

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

SOURCE: American Hospital Association, Trend Analysis Group: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1992 -September 1996.

Table 2

Percent Change in Selected Community Hospital Statistics: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Annual Percent ChangePercent Change From the Same Period of Previous Year
Use
 Admissions in Thousands-0.80.70.91.41.02.30.21.20.91.33.21.20.70.3-1.4-0.2-0.7
  Admissions per 1,000 Population-1.8-0.2-0.10.40.01.4-0.70.2-0.10.32.20.3-0.2-0.6-2.3-1.1-1.5
 Inpatient Days in Thousands-2.4-2.1-2.9-2.9-2.6-1.8-2.9-3.0-2.9-3.0-2.6-2.8-3.0-3.4-4.6-3.7-4.1
 Adult Length of Stay in Days-1.6-2.8-3.8-4.2-3.5-4.0-3.1-4.1-3.8-4.3-5.6-4.0-3.7-3.7-3.2-3.6-3.5
65 Years of Age or Over
 Admissions in Thousands1.72.92.02.92.25.22.31.82.61.35.22.91.61.9-1.60.50.6
  Admissions per 1,000 Population0.21.50.81.80.83.91.10.61.40.14.01.70.50.8-2.7-0.5-0.3
 Inpatient Days in Thousands-0.6-1.9-2.2-3.9-3.7-1.3-1.1-3.2-1.6-3.1-3.0-2.9-5.0-4.9-7.3-6.0-4.9
 Adult Length of Stay in Days-2.2-4.7-4.2-6.6-5.8-6.3-3.3-5.0-4.1-4.4-7.8-5.6-6.5-6.7-5.8-6.5-5.5
Under 65 Years of Age
 Admissions in Thousands-2.2-0.50.20.40.30.7-1.10.7-0.11.31.90.20.2-0.7-1.3-0.6-1.4
  Admissions per 1,000 Population-3.1-1.4-0.7-0.5-0.6-0.3-1.9-0.2-1.00.31.0-0.7-0.7-1.6-2.2-1.5-2.3
 Inpatient Days in Thousands-4.0-2.3-3.6-2.0-1.6-2.2-4.6-2.8-4.1-2.9-2.1-2.7-1.2-2.0-2.0-1.6-3.4
 Adult Length of Stay in Days-1.9-1.8-3.8-2.4-1.8-2.8-3.5-3.5-4.0-4.2-4.0-3.0-1.4-1.3-0.7-1.0-2.0
Surgical Operations in Thousands2.21.12.51.90.81.50.32.52.94.56.41.7-0.1-0.1-1.32.13.4
Outpatient Visits in Thousands6.46.57.08.36.47.03.96.67.99.713.09.25.95.74.75.47.9
Adjusted Patient Days in Thousands-0.5-0.9-1.0-0.9-1.3-0.7-1.5-0.8-0.9-0.70.0-0.9-0.9-1.8-2.8-1.1-1.2
Beds in Thousands-0.5-0.7-1.2-1.8-0.8-0.8-1.2-1.2-1.4-1.2-1.5-1.8-1.9-2.1-2.1-2.1-2.6
Adult Occupancy Rate1-1.4-0.7-1.1-0.7-1.1-0.6-1.1-1.1-0.9-1.1-0.7-0.6-0.6-0.8-2.3-1.0-0.9
Total Hospital Revenues in Millions9.47.14.95.06.76.64.04.94.66.06.95.54.23.63.04.23.9
 Total Patient Revenues in Millions9.47.04.64.86.66.33.74.74.35.66.65.14.03.42.93.63.3
  Inpatient Revenues in Millions7.35.72.52.65.35.22.22.42.23.23.83.11.91.81.00.90.3
  Outpatient Revenues in Millions15.610.610.19.910.19.57.810.79.612.013.89.89.17.37.59.99.9
Operating Expenses
Total in Millions9.46.95.05.36.36.34.64.95.05.56.45.74.54.74.14.23.6
 Labor in Millions8.96.94.74.56.25.74.54.24.95.45.55.03.73.83.32.92.6
 Non-Labor in Millions10.06.85.36.36.57.04.85.65.05.77.46.55.65.84.95.74.8
Inpatient Expense in Millions7.35.62.93.25.05.13.12.62.93.13.73.72.43.12.11.40.6
 Amount per Patient Day9.97.86.06.37.87.06.25.75.96.36.46.75.56.77.15.34.9
 Amount per Admission8.14.82.01.84.02.72.91.42.01.80.52.41.72.83.61.61.3
Outpatient Expense15.610.410.510.59.99.48.710.910.311.913.610.59.78.78.810.510.2
 Amount per Outpatient Visit8.63.63.22.03.32.34.74.12.22.00.51.13.62.83.94.82.2

Change in rate, rather than percent change.

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

SOURCE: American Hospital Association, Trend Analysis Group: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1992- September 1996.

Figure 1

Hospital Admissions per 1,000 Population For All Ages, Population 65 Years of Age or Over, and Population Under 65 Years of Age: 1990-96

The AHA data for the third quarter of 1996 show that the length of adult hospital stays continues to fall, with the decline driven by declines in length of stay for the population 65 years of age or over. The overall length of stay fell to 5.4 days in the third quarter of 1996. The length of stay for the population 65 years of age or over fell to 6.6 days, whereas the length of stay for those under 65 years of age was 4.7 days. Figure 2 shows that recent declines in the length of stay have been driven by the 65-years-or-over age cohort, while length of stay for those under 65 years of age has been remarkably stable, falling only 0.2 day from the third quarter of 1994 to the third quarter of 1996. In contrast, the length of stay for the population aged 65 years or over has fallen nearly a day, from 7.5 days to 6.6 days, during the same time period. The evidence suggests that recent quality-of-care initiatives that have led to mandated stays for certain procedures may be creating a floor under the length of stay for the population under 65 years of age. For example, 28 States and the Federal Government have started legislation to mandate insurance coverage for increased hospital stays for new mothers and their babies; the Centers for Disease Control reports that the length of postpartum hospital stays increased by 12 hours in New Jersey since that State enacted legislation in 1995 (Reuters Health Line, 1996). Moreover, in their 1997 legislative sessions, 27 States will debate legislation calling for minimum 48-hour stays for women undergoing mastectomies (Reuters Medical News, 1997).
Figure 2

Average Hospital Length of Stay Among All Adults, Persons 85 Years of Age or Over, and Persons Under 65 Years of Age: 1990-96

The number of staffed hospital beds decreased 2.6 percent in the third quarter of 1996, measured from the same period 1 year earlier. This represents an acceleration of the decline in the number of beds. Despite the accelerating decline in the number of beds, the hospital occupancy rate continues to fall. Hospitals are not shedding excess capacity fast enough to match the decline in inpatient days. Figure 3 shows the hospital occupancy rate, the percent change in the number of staffed beds, and the percent change in inpatient hospital days for the first three quarters of each year since 1987.
Figure 3

Hospital Occupancy Rates and Percent Change in Staffed Beds and Inpatient Days: 1986-96

As a result of the continuing decline in hospital use, hospital revenues grew at record low rates in the first three quarters of 1996. Total patient revenue grew only 3.3 percent in the first three quarters, down from the 5.2-percent growth rate in the first three quarters of 1995. Inpatient revenue barely grew at all in the third quarter, up just 0.3 percent from the same period of the previous year. During the first three quarters of 1996, inpatient revenue grew only 0.7 percent, down from 2.9-percent growth in the first three quarters of 1995. Outpatient revenue, not as severely affected by the slowdown in use, grew 9.1 percent in the first three quarters of 1996, compared with 10.8 percent in the first three quarters of 1995.

Medicare Trust Funds Income and Outlays

Health Care Indicators now include statistics on the income and outlays of the Medicare trust funds statistics in Table 3. More information on the sources of these statistics is included in the Background section—Medicare Trust Funds Operations.
Table 3

Hospital Insurance and Supplementary Medical Insurance Trust Fund Operations: 1992-96

IndicatorCalendar Year1992Q11992Q21992Q31992Q41993Q11993Q21993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Total Medicare Outlays
 In Millions of Dollars$135,845$152,174$164,862$184,203$32,103$33,594$34,567$35,580$36,174$37,870$38,037$40,091$39,133$40,509$42,761$42,459$44,352$46,725$46,559$46,566$47,456$52,009$50,599
Hospital Insurance Trust Fund85,01594,391104,545117,60420,31121,32821,40521,97122,13423,98223,51724,75825,45825,93726,61826,53328,63830,51329,19929,25431,28834,52632,615
Supplementary Medical Insurance Trust Fund50,83057,78360,31766,59911,79212,26613,16313,60914,04113,88814,52015,33413,67614,57216,14315,92615,71416,21217,36117,31216,16817,48317,984
Hospital Insurance Trust Fund Operations: In Millions of Dollars
Income93,836$98,187$109,570$115,027$20,134$28,927$19,415$25,360$20,833$29,581$21,327$26,446$22,047$33,155$24,547$29,821$25,215$35,570$24,241$30,001$26,293$39,365$27,840
 Outlays85,01594,391104,545117,60420,31121,32821,40521,97122,13423,98223,51724,75825,45825,93726,61826,53328,63830,51329,19929,25431,28834,52632,615
 Difference8,8213,7965,025(2,577)(177)7,598(1,990)3,389(1,301)5,599(2,190)1,688(3,411)7,219(2,071)3,288(3,423)5,057(4,958)747(4,995)4,839(4,775)
Assets at End of Period1124,022127,818132,844130,267115,024122,623120,633124,022122,722128,320126,131127,818124,408131,626129,555132,844129,420134,477129,520130,267125,272130,111125,336
Supplementary Medical Insurance Trust Fund Operations: In Millions of Dollars
Income57,237$57,679$55,608$60,306$12,742$13,574$11,611$19,309$10,635$15,935$14,919$16,189$13,299$14,387$13,491$14,430$16,478$17,189$10,072$16,568$26,596$19,654$19,208
 Outlays50,83057,78360,31766,59911,79212,26613,16313,60914,04113,88814,52015,33413,67614,57216,14315,92615,71416,21217,36117,31216,16817,48317,984
 Difference6,407(104)4,709)(6,293)9501,309(1,552)5,700(3,405)2,047399856(377)(185)(2,651)(1,496)764977(7,288)(745)10,4282,1711,224
Assets at End of Period124,23524,13119,42213,13018,77820,08718,53524,23520,83022,87723,27624,13123,75523,57020,91919,42220,18621,16313,87413,13023,55825,72926,953
Annual Percent ChangePercent Change From the Same Period of Previous Year
Total Medicare Outlays11.912.08.311.714.89.812.011.212.712.710.012.78.27.012.45.913.315.38.99.77.011.38.7
Hospital Insurance Trust Fund17.111.010.812.517.615.919.116.19.012.49.912.715.08.113.27.212.517.69.710.39.313.211.7
Supplementary Medical Insurance Trust Fund4.013.74.410.410.20.52.04.119.113.210.312.7-2.64.911.23.914.911.37.58.72.97.83.6
Hospital Insurance Trust Fund
 Operations
  Income5.64.611.65.0-1.514.32.84.83.52.39.94.35.812.115.112.814.47.3-1.20.64.310.714.8
  Outlays17.111.010.812.517.615.919.116.19.012.49.912.715.08.113.27.212.517.69.710.39.313.211.7
Assets at End of Period7.73.13.9-1.912.712.59.77.76.74.64.63.11.42.62.73.94.02.20.0-1.9-3.2-3.2-3.2
Supplementary Medical Insurance Trust Fund
 Operations
  Income11.70.8-3.68.54.93.58.226.9-16.517.428.5-16.225.0-9.7-9.6-10.923.919.5-25.314.861.414.390.7
  Outlays4.013.74.410.410.20.52.04.119.113.210.312.7-2.64.911.23.914.911.37.58.72.97.83.6
Assets at End of Period35.9-0.4-19.5-32.410.912.618.335.910.913.925.6-0.414.03.0-10.1-19.5-15.0-10.2-33.7-32.416.721.694.3

As shown in the Monthly Treasury Statement. Excludes undisbursed balance.

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

SOURCES: Monthly Treasury Statement of Receipts and Outlays of the United States Government. Financial Management Service, U.S. Department of the Treasury. 1996 Annual Reports of the Board of Trustees of the HI and SMI Trust Funds. Office of the Actuary, Health Care Financing Administration.

Separate trust funds finance the operations of the two Medicare programs. The HI program, or Medicare Part A, helps pay for inpatient hospital, home health, skilled nursing facility (SNF), and hospice care for the aged and disabled. The HI program is financed primarily by payroll taxes paid by workers and employers. The taxes paid each year are used mainly to pay benefits for current beneficiaries. The Supplementary Medical Insurance (SMI) program, or Medicare Part B, pays for physician, outpatient hospital, and other services for the aged and disabled. The SMI program is financed primarily by transfers from the general fund of the U.S. Treasury and by monthly premiums paid by beneficiaries. For both Medicare programs, income not currently needed to pay benefits and related expenses is held in the HI and SMI trust funds and invested in U.S. Treasury securities (Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund, 1996; Annual Report of the Board of Trustees of the Federal Supplementary Medical Insurance Trust Funds, 1996). Quarterly levels of the outlays and income of the HI and SMI trust funds fluctuate from quarter to quarter for many reasons. The variability in the quarterly trust fund data may be even greater than the quarterly variability in the other health care indicators discussed in this article (essentially price and utilization series) because of the effects of the timing of payments into and from the trust funds. The primary sources of variation in the level of outlays are the number of business days in a quarter, the timing of payments, usually made the first of a month but which are made early when the first day is on a weekend or legal holiday, and seasonal variation in health care use and costs. The sources of variation in income flows generally result from the timing of payments made to the trust funds. The timing of payroll tax withholding; settlements on self-employment taxes; and premium, interest, and general revenue payments to the funds are the primary sources of this variation. The growth in total Medicare outlays decelerated slightly through the third quarter of 1996. Total Medicare outlays, the sum of Part A and Part B outlays, were $50.6 billion in the third quarter of 1996, an 8.7-percent increase from the same quarter of the previous year. For Federal Fiscal Year (FFY) 1996, which ended September 30, 1996, total Medicare outlays were $196.6 billion, an increase of 9.2 percent over FFY 1995. This is a deceleration from the 10.8-percent growth registered in FFY 1995, when total Medicare outlays were $180.1 billion. The deceleration in total Medicare outlays in FFY 1996 was driven in large part by the marked deceleration in Part B outlays. Outlays for Part B increased just 5.7 percent in FFY 1996, after increasing 9.2 percent in FFY 1995. The key factor in the deceleration of Part B outlays is the Medicare volume performance standards (MVPS) which were incorporated into the physician fee schedule in 1992. These standards, designed to control growth in Medicare physician and other professional services, imposed a penalty for overshooting 1994 growth targets that took effect in the first quarter of CY 1996 (Levit et al., 1996). As a result, price increases for services covered by the physician fee schedule, which accounted for most of the Part B outlay growth in 1995, will be severely limited in 1996. Although the volume of services, as well as outlays for Part B benefits not covered by the physician fee schedule, affected Part B outlays in FFY 1996, the price constraints imposed by the MVPS acted to slow Part B outlays in the remaining three quarters of the fiscal year. The growth Part A outlays decelerated only slightly in FFY 1996. The growth rate in Part A outlays for FFY 1996 was 11.1 percent compared with 11.8 percent in FFY 1995. The growth of outlays from the HI trust fund was 11.7 percent in the third quarter of 1996, compared with the same period 1 year earlier. The quarterly changes in HI trust fund income and outlays are shown in Figure 4. This chart depicts the quarterly changes in the income and outlays of the HI trust fund, as well as the percent change in the assets held by the fund at the end of each quarter. The growth in outlays, or benefits paid, has exceeded the growth in trust fund income in 13 of the last 19 quarters. The quarterly percent change in HI trust fund assets held, measured from the same period in the previous year, reflects the decline in the asset balance beginning in the third quarter of 1995 and continuing through the third quarter of 1996. The decline in the HI trust fund assets balance in FFY 1996 had been expected, and was reported in the 1996 Trustees Report.
Figure 4

Percent Change From the Same Period of Previous Year in Medicare Hospital Insurance (Part A) Trust Fund Income, Outlays, and Assets: 1992-96

Trends in Health Sector Employment and Earnings

The first three quarters of 1996 were marked by moderate growth in employment in both the health sector and in the private non-farm business sector. As shown in Tables 4 and 5, employment in private sector health services grew 3.3 percent in the third quarter of 1996, measured from the same period 1 year earlier, a slight deceleration from the 3.6-percent increase recorded in the second quarter of 1996. The fastest growing components of private sector health services were the Offices and Clinics of Physicians and the Offices and Clinics of Dentists, and private hospitals remained the slowest growing component. The most significant change in health services employment was in home health services. As shown in Figure 5, home health services is no longer the fastest growing segment of private sector health services. By the third quarter of 1996, employment in home health services increased only 3.8 percent from the same period of the previous year. This rate of increase is only one-third the growth rate measured in the third quarter of 1995 (11.1 percent), and one-fifth of the growth rate recorded in the third quarter of 1994 (18.9 percent). Employment growth in home health care services has been decelerating since the second quarter of 1994, when Medicare home health care cost limits were frozen.
Table 4

Employment, Hours, and Earnings in Private Sector Health Service Establishments, by Selected Type of Establishment: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Total Employment (in Thousands)
Non-Farm Private Sector89,95991,88995,04497,89292,97093,40292,09694,81196,34796,92395,64697,85398,92899,14297,489100,024101,303
 Health Services8,4908,7568,9929,2578,8088,8548,8788,9659,0429,0839,1199,2099,3099,3899,4419,5409,614
  Offices and Clinics of Physicians1,4631,5061,5451,6061,5161,5161,5191,5361,5571,5681,5771,5971,6171,6321,6391,6651,687
  Offices and Clinics of Dentists541556574597559563565573576581584593602609614622628
  Nursing Homes1,5331,5851,6491,6931,5971,6181,6261,6421,6611,6661,6711,6831,7041,7151,7171,7351,754
  Private Hospitals3,7503,7793,7633,7843,7883,7713,7623,7623,7693,7593,7583,7743,7943,8093,8283,8463,860
  Home Health Care Services398469559626481505523553571591603619635648647658659
Non-Supervisory Employment (in Thousands)
Non-Farm Private Sector72,93074,77777,61080,12375,77776,17574,87877,42078,80679,33778,04380,09781,08281,27279,61581,96283,094
 Health Services7,5467,7707,9668,2007,8157,8477,8697,9498,0078,0418,0758,1598,2478,3198,3668,4558,519
  Offices and Clinics of Physicians1,2021,2311,2611,3111,2381,2361,2421,2531,2701,2781,2871,3031,3201,3331,3401,3631,382
  Offices and Clinics of Dentists473487501521489493495501503507510518525532539546551
  Nursing Homes1,3851,4311,4871,5271,4421,4591,4651,4811,4981,5021,5061,5181,5371,5471,5461,5621,578
  Private Hospitals3,4423,4643,4413,4603,4713,4523,4413,4423,4443,4353,4353,4523,4703,4843,5033,5203,534
  Home Health Care Services369435518579446469485512528546558573588599599608609
Average Weekly Hours
Non-Farm Private Sector34.434.534.734.534.834.634.334.734.934.834.334.434.734.533.934.434.8
 Health Services32.832.832.832.832.932.832.832.832.832.832.832.732.832.732.532.532.7
  Offices and Clinics of Physicians32.232.232.432.532.332.332.432.332.332.632.432.432.532.732.632.732.8
  Offices and Clinics of Dentists28.428.328.128.028.228.328.228.228.028.228.028.027.828.127.928.128.1
  Nursing Homes32.332.232.332.532.632.132.132.232.532.432.332.332.832.532.232.332.6
  Private Hospitals34.434.634.734.534.734.634.734.634.734.634.734.634.534.434.434.334.3
  Home Health Care Services27.427.828.228.627.927.928.028.228.228.528.728.728.728.127.727.828.3
Average Hourly Earnings
Non-Farm Private Sector10.5710.8311.1211.4410.8210.9611.0511.0611.1011.2711.3511.3611.4411.6011.7011.7511.82
 Health Services11.3911.7812.1012.4511.8011.9212.0012.0212.1312.2512.3612.3612.4612.6112.7312.7612.85
  Offices and Clinics of Physicians11.4211.8912.2612.5211.9112.0712.1612.2212.2912.3612.4512.4312.4912.7012.8813.0113.14
  Offices and Clinics of Dentists11.0211.4411.9712.4011.4611.6811.7811.9212.0112.1712.2512.3512.4112.6012.6812.7612.91
  Nursing Homes7.868.178.508.768.208.318.408.448.538.618.718.738.788.838.928.938.99
  Private Hospitals13.0313.4613.8314.3013.4913.6113.7013.7013.8914.0414.1714.1614.3414.5214.6214.6214.73
  Home Health Care Services10.0010.4110.6710.9110.4710.5010.5810.6210.7110.7510.8410.8410.9211.0311.1111.1211.21
Addenda: Hospital Employment (in Thousands)
  Total5,0685,1005,0775,0925,1145,0915,0805,0775,0835,0685,0655,0805,1065,1165,1335,1495,160
  Private3,7503,7793,7633,7843,7883,7713,7623,7623,7693,7593,7583,7743,7943,8093,8283,8463,860
  Federal235234234232235235236234234232230232235231231229226
  State419414407397414412409408406405404398394393390385380
  Local665673673679677674673672675672673677681683685689694

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 1992- September 1996.

Table 5

Percent Change in Employment, Hours, and Earnings in Private Sector Health Service Establishments, by Selected Type of Establishment: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Annual Percent ChangePercent Change From the Same Period of Previous Year
Total Employment (in Thousands)
Non-Farm Private Sector0.12.13.43.02.42.72.93.43.63.83.93.22.72.31.92.22.4
 Health Services3.83.12.72.93.23.02.82.82.72.62.72.72.93.43.53.63.3
  Offices and Clinics of Physicians4.22.92.63.92.92.22.02.22.73.43.84.03.84.13.94.34.3
  Offices and Clinics of Dentists2.52.93.14.12.83.13.13.33.13.13.33.64.54.85.24.84.4
  Nursing Homes2.73.44.02.73.74.54.74.44.03.02.82.52.63.02.83.12.9
  Private Hospitals2.60.8-0.40.60.60.0-0.4-0.5-0.5-0.3-0.10.30.71.31.81.91.7
  Home Health Care Services15.517.919.311.919.320.321.020.718.916.915.312.011.19.77.36.23.8
Non-Supervisory Employment (in Thousands)
Non-Farm Private Sector0.42.53.83.22.73.13.23.84.04.24.23.52.92.42.02.32.5
 Health Services3.73.02.52.93.02.82.62.62.52.52.62.63.03.53.63.63.3
  Offices and Clinics of Physicians4.02.42.54.02.41.61.91.92.63.43.64.03.94.34.24.64.7
  Offices and Clinics of Dentists2.12.83.04.02.82.93.13.32.82.93.13.34.55.05.65.64.9
  Nursing Homes2.83.33.92.73.64.34.54.23.93.02.82.52.63.02.72.92.7
  Private Hospitals2.70.6-0.70.60.4-0.3-0.7-0.8-0.8-0.5-0.20.30.81.42.02.01.8
  Home Health Care Services15.617.919.111.919.320.421.320.718.416.615.011.911.39.77.36.13.7
Average Weekly Hours
Non-Farm Private Sector0.20.30.5-0.60.60.40.70.60.30.60.0-1.0-0.5-0.8-1.10.20.1
 Health Services0.70.10.1-0.20.00.00.10.0-0.10.20.1-0.2-0.1-0.4-0.8-0.5-0.2
  Offices and Clinics of Physicians0.80.20.50.20.20.30.70.40.10.90.20.10.40.10.41.01.1
  Offices and Clinics of Dentists0.2-0.3-0.5-0.6-0.2-0.20.1-0.7-0.8-0.5-0.5-0.9-0.8-0.2-0.60.61.3
  Nursing Homes0.5-0.30.30.5-0.3-0.70.20.0-0.21.00.60.30.70.4-0.30.0-0.4
  Private Hospitals0.60.50.2-0.30.50.50.50.20.1-0.1-0.1-0.1-0.6-0.5-0.9-0.9-0.5
  Home Health Care Services4.81.41.71.21.21.01.71.61.12.42.61.91.7-1.4-3.4-3.2-1.2
Average Hourly Earnings
Non-Farm Private Sector2.42.52.72.82.32.52.62.52.62.82.72.73.03.03.13.43.4
 Health Services3.93.42.72.93.13.02.72.62.92.83.02.82.73.03.03.23.2
  Offices and Clinics of Physicians2.54.23.12.13.83.63.83.13.22.42.41.71.72.73.44.65.2
  Offices and Clinics of Dentists3.83.84.63.64.24.34.75.04.84.13.93.63.43.63.53.34.0
  Nursing Homes3.94.04.03.13.84.44.24.14.03.63.73.42.92.62.42.32.4
  Private Hospitals4.23.32.73.42.92.82.42.52.93.13.53.33.33.43.13.32.7
  Home Health Care Services6.64.12.52.34.23.52.62.72.32.32.52.12.02.62.42.62.7
Addenda: Hospital Employment (in Thousands)
  Total2.20.6-0.50.30.50.0-0.3-0.5-0.6-0.5-0.30.00.40.91.31.41.1
  Private2.60.8-0.40.60.60.0-0.4-0.5-0.5-0.3-0.10.30.71.31.81.91.7
  Federal0.5-0.40.0-0.70.41.01.70.6-0.8-1.5-2.2-1.10.8-0.50.2-1.3-4.0
  State0.5-1.2-1.6-2.5-1.1-1.3-1.5-1.4-1.9-1.6-1.3-2.6-2.9-3.0-3.3-3.2-3.7
  Local1.81.30.00.81.30.70.50.0-0.4-0.30.00.61.01.71.71.91.9

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 1992- September 1996.

Figure 5

Percent Change From Same Period of Previous Year in Employment in the Non-Farm Private Sector, Private Sector Health Services, and Home Health Care Services: 1989-96

There is little evidence of accelerating labor cost pressures in the Bureau of Labor Statistics (BLS) data on private sector health services average hourly earnings for the third quarter of 1996. Average hourly earnings for workers in private sector health services establishements increased 3.2 percent in the third quarter of 1996, measured from the same period one year earlier. This growth rate was unchanged from the second quarter, and represents only a slight acceleration from the annual growth rate of 2.9 percent recorded in 1995. Average hourly earnings for the private sector as a whole outgrew the health sector in each of the first three quarters of 1996, providing further evidence that health sector labor cost pressures are less than those in the rest of the economy. The two fastest growing segments of health services in terms of average hourly earnings are the same sectors, Offices and Clinics of Physicians and Dentists, where employment grew most rapidly in the third quarter of 1996. Average hourly earnings in the other components of private sector health services (nursing homes, private hospitals, and home health care services) grew less than average hourly earnings in the private non-farm business sector at large.

Medical Sector Prices

Medical price growth continued to decelerate in the third quarter of 1996, a trend that began in 1992 but has become more apparent since the first quarter of 1995. This decelerating growth is most evident in the CPI for medical care. The percent change in the CPI for medical care decelerated from 4.9 percent in the first quarter of 1995 to 3.4 percent in the third quarter of 1996. During this same period, the percent change in the CPI for all items less medical care was virtually constant at 2.9 percent, resulting in a 0.5-percentage point differential in the third quarter of 1996. As shown in Figure 6, the CPI for medical care is converging with the CPI for all items less medical care. The difference between overall price growth and medical care price growth in the third quarter 1996 is the smallest since the third quarter of 1981, and well below the average differential of 3.7 percentage points between 1985-94. As with most of the declining indicators for hospital use and revenue, the deceleration in the growth rate of the medical care CPI can be viewed as a result of the increased penetration by managed care in the health care market. Although the PPI for health services is a relatively new index, having been introduced in December 1994, there has been a recent downward trend in its growth rate as well. Producer price growth for health services decelerated from 2.5 percent in the first quarter of 1996 to 2.1 percent in the third quarter of 1996. For both medical consumer and producer prices these recent downward trends have been caused in part by decelerating growth in physician and inpatient hospital prices. As is always the case with the CPI and the PPI, differences in scope and methodologies of the two surveys precludes any direct comparison between the two indexes (more explanation is included in the Background section). However, directional trends in growth rates for each index can be analyzed in relation to the other.
Figure 6

Percent Change in Consumer Price Indexes From the Same Period of Previous Year: 1987-96

For 1996 year-to-date, growth in physician consumer and producer prices decelerated from the same period of 1995. As indicated in Figure 7, the CPI for physicians' services decelerated from 4.6-percent growth for the first three quarters of 1995 to 3.7-percent growth for the first three quarters of 1996. The CPI for physicians' services measures only list price changes for household, out-of-pocket expenditures for physicians' services. On the other hand, the PPI for offices of doctors of medicine measures transaction prices from all payers, including out-of-pocket, Medicare, Medicaid, and other third-party payers. Similar to the trend in the CPI for physicians' services, growth in the PPI for offices of doctors of medicine decelerated from 4.3-percent growth for the first three quarters of 1995 to 0.7-percent growth for the first three quarters of 1996. The larger magnitude deceleration for the PPI is partly from the inclusion of other payers besides out-of-pocket, especially Medicare treatments. As measured by the PPI, Medicare treatments in offices of doctors of medicine are based on a combination of a geographic area sample of payments under the HCFA Common Procedure Coding System (HCPCS), fee schedule updates published annually in the Federal Register, and other adjustments. Although the methodology is not the same as the HCFA update published in the Federal Register, the PPI for Medicare treatments in offices of doctors of medicine is based on these updates. The CY 1996 HCFA update was based on the Medicare Economic Index (MEI) (Table 13), performance adjustments, and other adjustments. For year-to-date 1996, the PPI for Medicare treatments in offices of doctors of medicine decreased by 3.7 percent (Table 9). Based on recent updates published in the November 22, 1996, Federal Register, the 1997 growth rate for the PPI for Medicare treatments in offices of doctors of medicine is likely to accelerate from the 3.7-percent decline in 1996.
Figure 7

Percent Change in Selected Physician Price Indexes for the First Three Quarters of Year From Same Period of Previous Year: 1995-96

Table 13

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the HCFA Medicare Economic Index with DRI Forecast Assumptions, by Expense Category: 1994-98

Expense Category1Price/Wage VariableBase Year Weights FY 8921994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3Forecast
1996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q3
Index Levels
Total—100.000114.0114.7114.9115.4116.2117.0117.4118.0118.9119.6120.2120.8121.9122.7123.2123.9
 Physician Earnings—54.155112.2112.8112.8113.2114.3115.0115.3115.8117.0117.7117.9118.3119.6120.3120.5120.9
  Wages and SalariesAHE—Privates345.342109.8110.3110.2110.7112.0112.8113.0113.6114.9115.6115.8116.1117.6118.2118.3118.7
  BenefitsECI—-Benefits, Privates38.813124.4125.5125.8125.9125.9126.4126.9127.3127.8128.7129.2129.7130.1131.4132.0132.7
 Practice Expenses—45.845116.1116.9117.4117.9118.4119.3120.0120.7121.1121.9122.9123.8124.5125.4126.4127.4
  Non-Physician Compensation—16.296115.2116.0116.3116.8117.3118.2118.8119.7120.3121.1121.7122.6123.2124.2124.6125.5
   Wages and Salaries—13.786113.4114.1114.5115.0115.5116.6117.2118.1118.6119.5120.1121.0121.7122.6123.0124.0
    Professional/TechnicalECI—W/S: Professional/Technical33.790114.8115.1115.5116.1116.6117.9118.6119.2119.8120.6121.3122.5123.0123.7124.1125.3
    ManagersECI—W/S: Administrative/Managerial32.620112.9114.0114.3114.9115.5116.7117.3119.1119.1119.9120.8121.7122.4123.2123.7124.6
    ClericalECI—W/S: Clerical35.074113.8114.7115.0115.5116.2117.1117.6118.5119.2120.3120.7121.6122.2123.3123.9124.9
    CraftECI—W/S: Craft30.069110.6111.1111.9112.7112.8113.5114.5114.8115.2116.1116.9117.6117.9118.7119.4120.2
    ServicesECI—W/S: Service Occupations32.233111.1111.4111.7112.2112.5113.0113.6114.4115.1115.8116.0116.8117.9118.4118.4119.2
   Employee BenefitsECI—Benefits, Private White Collar32.510124.7126.2126.6126.9126.7127.4127.8128.6129.1129.9130.6131.1131.5132.8133.5134.2
  Office ExpensesCPI(U)—Housing10.280118.3119.4120.2121.5121.6122.9123.7125.1125.5126.9128.1129.9130.3131.5132.6134.2
  Medical Materials/SuppliesPPI—Drugs/PPI—Surgical/CPI— Medical Supplies5.251126.9127.5128.1128.2130.1130.8131.6132.1132.3133.0134.5134.8135.7136.3138.0138.4
  Professional Liability InsuranceHCFA—Professional Liability Premiums4.78097.797.997.796.896.696.496.396.095.896.096.396.897.197.698.399.1
  Medical EquipmentPPI—Medical Instruments/Equipment2.348109.5110.3110.4111.1111.0112.4112.2111.9111.8112.9113.6113.5114.0114.9115.2115.1
  Other Professional Expenses—6.890121.8122.9124.0124.4125.2126.2127.4127.7128.6129.2130.6131.6133.0134.0135.7136.9
   AutomobileCPI(U)—Private Transportation1.400119.1119.6121.5120.8120.9122.0124.9124.1124.6124.4127.0127.0128.4129.0132.4133.3
   All OtherCPI(U)—All Items less Food/Energy5.490122.5123.7124.7125.3126.3127.3128.0128.6129.7130.4131.5132.7134.2135.2136.6137.8
4-Quarter Moving-Average Percent Change
Total—100.0002.22.12.12.02.01.92.02.12.22.32.32.32.42.42.52.5
 Physician Earnings—54.1551.91.81.81.81.81.82.02.12.22.32.32.32.32.22.22.2
  Wages and SalariesAHE—Private345.3421.71.71.71.81.92.02.22.32.52.62.52.42.42.32.32.3
  BenefitsECI—Benefits, Private38.8133.02.62.31.81.51.21.01.01.01.31.51.81.81.92.02.1
 Practice Expenses—45.8452.52.52.52.32.12.12.02.12.22.22.32.42.52.72.82.8
  Non-Physician Compensation—16.2962.22.22.22.01.91.91.92.12.32.42.52.52.42.52.42.4
   Wages and Salaries—13.7862.02.02.01.91.91.92.02.32.52.62.62.62.52.52.52.5
    Professional/TechnicalECI—W/S: Professional/Technical33.7901.91.81.81.71.61.82.12.32.62.62.52.52.52.62.62.5
    ManagersECI—W/S: Administrative/Managerial32.6202.02.22.22.12.22.22.32.83.03.03.12.72.72.72.52.6
    ClericalECI—W/S: Clerical35.0742.22.22.22.02.12.02.12.22.42.62.72.72.62.62.62.6
    CraftECI—W/S: Craft30.0691.91.91.91.81.92.02.12.12.12.22.12.22.32.32.32.2
    ServicesECI—W/S: Service Occupations32.2331.61.61.71.81.61.61.51.61.82.12.22.32.32.22.22.2
   Employee BenefitsECI—Benefits, Private White Collar32.5103.63.33.02.62.11.71.41.21.31.61.92.02.02.02.02.1
  Office ExpensesCPI(U)—Housing10.2802.52.42.42.42.52.72.82.93.03.13.23.53.63.73.73.6
  Medical Materials/SuppliesPPI—Drugs/PPI—Surgical/CPI— Medical Supplies5.2513.02.82.82.32.12.22.22.72.52.32.11.92.12.32.42.6
  Professional Liability InsuranceHCFA—Professional Liability Premiums4.7803.63.32.91.90.8-0.3-1.1-1.3-1.2-0.9-0.5-0.10.41.01.51.9
  Medical EquipmentPPI—Medical Instruments/Equipment2.3480.50.60.91.11.31.51.61.41.20.80.70.91.21.61.71.7
  Other Professional Expenses—6.8902.93.13.33.23.13.02.82.72.72.62.62.72.83.23.53.8
   AutomobileCPI(U)—Private Transportation1.4003.03.94.84.43.72.92.32.32.72.72.42.32.32.73.34.0
   All OtherCPI(U)—All Items less Food/Energy5.4902.92.92.92.93.03.02.92.82.72.62.62.83.03.33.63.7

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 economy-wide productivity and physician practice productivity are not included in the update.

NOTES: 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. 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. An example of how a percent change is calculated is shown in the notes at end of Table 10.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics Division of Health Cost Analysis. Fourth–quarter 1996 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw-Hill..

Table 9

Percent Change in Medical Prices From Same Period of Previous Year: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Annual Percent ChangePercent Change From the Same Period of Previous Year
Consumer Price Indexes, All Urban Consumers1
Medical Care Services27.66.55.25.06.46.05.45.15.05.25.55.25.04.54.13.83.5
 Professional Services6.15.14.34.45.04.54.34.24.14.54.74.44.44.03.83.73.5
  Physicians' Services6.35.64.44.55.65.24.84.54.24.34.54.54.64.54.23.73.3
  Dental Services6.75.34.84.94.94.54.44.54.85.45.74.94.84.34.24.64.9
 Hospital and Related Services9.18.45.95.08.37.86.75.85.75.45.35.04.84.64.74.74.6
  Hospital Room8.88.55.75.08.47.86.65.65.55.05.35.14.94.84.13.93.8
  Other Inpatient Services (1986=100)9.17.86.15.07.67.66.86.35.95.75.55.04.84.55.05.05.0
  Outpatient Services (1986=100)10.09.35.84.99.18.06.55.45.75.75.24.94.74.85.05.75.4
Medical Care Commodities6.43.72.91.93.73.32.93.02.83.02.51.71.51.82.43.13.2
 Prescription Drugs7.63.93.41.93.83.33.04.03.23.42.41.51.92.02.93.63.5
 Non-Prescription Drugs and Medical Supplies (1986=100)3.93.31.91.83.43.32.60.92.02.12.82.30.71.21.52.02.3
  Internal and Respiratory Over-the- Counter Drugs3.83.31.50.63.43.53.01.30.80.91.10.30.50.61.32.11.9
  Non-Prescription Medical Equipment and Supplies4.13.32.73.93.53.11.90.14.24.45.86.11.32.51.71.82.8
Producer Price Indexes3
Industry Groupings:4
 Health Services (12/94=100)——————————————2.52.42.1
  Offices and Clinics of Doctors of Medicine (12/93=100)———3.9——————4.54.34.02.91.00.70.4
   Medicare Treatments (12/93=100)———4.7——————4.74.74.74.7-3.7-3.7-3.7
   Non-Medicare Treatments (12/93=100)———3.6——————4.54.33.62.11.91.51.6
  Hospitals (12/92=100)——3.63.5——3.83.63.63.54.03.73.13.42.72.72.5
   General Medical and Surgical Hospitals (12/92=100)——3.53.7——3.53.53.53.44.03.83.23.72.92.82.3
    Inpatient Treatments (12/92=100)——3.53.1——3.73.63.53.13.43.22.53.12.82.82.3
     Medicare Patients (12/92=100)——2.02.0——2.32.32.31.31.31.31.34.14.14.14.1
     Medicaid Patients (12/92=100)——4.62.5——4.34.75.04.54.03.41.11.62.12.62.4
     All Other Patients (12/92=100)——4.03.7——4.34.13.83.94.44.23.33.02.32.01.4
    Outpatient Treatments (12/92=100)——4.16.2——3.43.74.44.76.66.36.06.13.32.92.2
     Medicare Patients (12/92=100)——3.14.0——2.32.63.04.64.54.84.02.71.91.31.4
     Medicaid Patients (12/92=100)——1.72.9——1.1-0.32.73.13.84.60.62.81.31.20.1
     All Other Patients (12/92=100)——4.46.9——3.84.34.84.87.26.76.86.93.73.42.6
  Skilled and Intermediate Care Facilities (12/94=100)——————————————6.16.56.2
   Public Payors (12/94=100)——————————————6.67.26.5
   Private Payors (12/94=100)——————————————5.95.86.0
  Medical Laboratories (6/94=100)————————————5.95.13.71.8-0.6
Commodity Groupings:
 Drugs and Pharmaceuticals5.34.52.52.44.43.73.02.62.12.31.92.22.43.12.52.01.9
  Ethical (Prescription) Preparations6.54.53.22.84.43.83.93.42.72.81.82.33.04.23.93.63.6
  Proprietary (Over-the-Counter) Preparations5.03.71.81.83.72.82.21.81.61.62.32.21.21.61.5-1.1-1.8
 Medical, Surgical, and Personal Aid Devices2.73.01.80.72.82.62.11.62.01.60.50.40.61.22.01.80.8
  Personal Aid Equipment2.61.76.42.71.31.24.36.77.47.42.60.73.24.44.36.13.8
  Medical Instruments and Equipment (6/82=100)2.22.10.51.31.91.90.80.10.80.61.11.11.61.42.01.60.8
   Surgical Appliances and Supplies (6/83=100)3.14.13.1-0.64.13.73.63.13.32.4-0.8-1.0-1.00.62.02.61.1
   Ophthalmic Goods (12/83=100)1.70.90.62.20.81.41.40.50.10.31.42.12.92.30.4-1.8-2.5
   Dental Equipment and Supplies (6/85=100)4.53.82.91.74.12.92.92.43.03.11.62.20.82.23.22.02.8

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. Quarterly data are not seasonally adjusted.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for January 1992-September 1996.U.S. Department of Labor, Bureau of Labor Statistics: Producer Price Indexes. Washington. U.S. Government Printing Office. Monthly reports for January 1992-September 1996.

Another contributor to decelerating health care price growth is slower increases in hospital inpatient prices. Growth in both the CPI and the PPI has slowed for this sector, as shown in Figure 8. The CPI for hospital rooms decelerated from a growth rate of 5.1 percent for the first three quarters of 1995 to a growth rate of 3.9 percent for the first three quarters of 1996. A less drastic deceleration also occurred in the CPI for other inpatient services, which declined from 5.1-percent growth to 5.0-percent for this same period. Producer price growth followed a similar trend to consumer price growth for hospital inpatient services. Year-to-date, the PPI for hospital inpatient treatments grew 2.6 percent in 1996 as compared with 3.0 percent in 1995. This deceleration was caused mostly by decelerating growth in prices faced by patients other than Medicare and Medicaid patients. Unlike the CPI, however, the PPI for outpatient treatments also decelerated, contributing to the decline in the growth rates for overall hospital producer prices. Though the producer price growth for Medicare patients accelerated between 1995-96, the HCFA PPS hospital input price index, which is used with other adjustments to update Medicare payments to hospitals under the PPS, grew less quickly in the first three quarters of 1996 (2.4 percent) as compared with 1995 (3.3 percent). The PPI for hospital inpatient Medicare treatments can differ from the HCFA update published annually in the Federal Register because the PPI is based on a national sample of diagnosis-related groups (DRGs) in hospitals, DRG relative weights from the PPS final rules published in the Federal Register, and other adjustments. Again the recent decelerating trend in hospital price growth is consistent with the decline in many of the major hospital indicators as a result of managed care penetration as well as over-capacity.
Figure 8

Percent Change in Selected Hospital Price Indexes for First Three Quarters of Year From Same Period of Previous Year: 1995-96

Background Information on Data Sources and Methods

Community Hospital Statistics

Since 1963, the 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 1995, 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, 1963-96). In Tables 1 and 2, statistics covering expenses, use, beds, and personnel depict trends in the operation of community hospitals annually for 1987-95 and quarterly for 1993 forward. For purposes of national health expenditures (NHE), survey statistics on revenues are analyzed in estimating the growth in the largest component of health care costs— community hospital expenditures. This segment of NHE accounted for 35 percent of all health spending in 1995 (Levit et al., 1996). The survey also identifies factors influencing expenditure growth, such as changes in the number of beds in operation, numbers of admissions, length of stay, use of outpatient facilities, and number of surgeries.

Medicare Trust Fund Operations

Data on the financial operations of the Medicare trust funds, the HI trust fund, and the SMI trust fund are available from two sources. The monthly statistics on trust fund operations are published in the Monthly Treasury Statement of Receipts and Outlays of the United States Government (U.S. Department of the Treasury, 1996). The trust fund operating statistics are presented in Table 8, entitled “Trust Fund Impact on Budget Results and Investment Holding.” The 1996 Annual Reports of the Board of Trustees of the HI and SMI Trust Funds (Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund, 1996; Annual Report of the Board of Trustees of the Federal Supplementary Medical Insurance Trust Funds, 1996) contain a detailed accounting of all financial operations for the prior fiscal year. They also contain actuarial analysis of the expected operations of the trust funds in future years and analysis of the actuarial status of the funds.
Table 8

Index Levels of Medical Prices: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41995Q11996Q21996Q3
1992199319941995
Consumer Price Indexes, All Urban Consumers1
Medical Care Services 2190.5202.9213.4224.2204.4206.7209.5212.0214.6217.5221.0223.0225.4227.4230.1231.5233.3
 Professional Services175.8184.7192.5201.0185.9187.1189.3191.8193.5195.5198.3200.2202.0203.4205.9207.5209.2
  Physicians' Services181.2191.3199.8208.8192.7194.2196.7199.2200.7202.4205.6208.1210.1211.5214.3215.8217.1
  Dental Services178.7188.1197.1206.8189.2190.8193.0196.1198.3201.1204.0205.8207.8209.8212.5215.1218.0
 Hospital and Related Services214.0231.9245.6257.8233.8237.7241.3243.4247.2250.6254.2255.6259.1262.2266.1267.7271.0
  Hospital Room208.7226.4239.2251.2228.2232.0235.3237.2240.9243.5247.8249.4252.6255.1257.9259.0262.3
  Other Inpatient Services (1986=100)172.3185.7197.1206.8187.2190.4193.5195.4198.2201.2204.0205.2207.8210.3214.3215.5218.1
  Outpatient Services (1986=100)168.7184.3195.0204.6185.6188.7191.5192.9196.3199.4201.5202.3205.5208.9211.7213.9216.5
Medical Care Commodities188.1195.0200.7204.5196.0196.7198.5200.1201.6202.6203.4203.6204.6206.2208.4209.9211.1
 Prescription Drugs214.7223.0230.6235.0223.9225.2228.0230.5231.0232.8233.4233.9235.4237.4240.1242.3243.7
 Non-Prescription Drugs and Medical Supplies (1986=100)131.2135.5138.1140.5136.7136.5136.7136.8139.4139.4140.5140.0140.4141.2142.5142.9143.6
  Internal and Respiratory Over-the-Counter Drugs158.2163.5165.9167.0165.3164.9165.2165.5166.6166.4167.1166.0167.4167.3169.3169.5170.6
  Non-Prescription Medical Equipment and Supplies150.9155.9160.0166.3156.5156.7156.7156.7163.1163.6165.8166.3165.2167.8168.7169.3169.8
Producer Price Indexes3
Industry Groupings:4
 Health Services (12/94=100)———102.4——————101.6101.9102.5103.4104.1104.4104.7
  Offices and Clinics of Doctors of Medicine (12/93=100)——102.8106.8——101.8102.4102.9104.0106.3106.8107.1107.0107.4107.5107.5
   Medicare Treatments (12/93=100)——104.7109.6——104.7104.7104.7104.7109.6109.6109.6109.6105.5105.5105.5
   Non-Medicare Treatments (12/93=100)——102.3105.9——101.0101.8102.4103.8105.5106.1106.1106.0107.5107.7107.8
  Hospitals (12/92=100)—102.5106.2110.0103.0104.0105.0105.4106.7107.7109.2109.3110.0111.4112.2112.3112.7
   General Medical and Surgical Hospitals (12/92=100)—102.4106.0109.9102.9103.9104.8105.2106.5107.5109.0109.2109.9111.5112.2112.2112.5
   Inpatient Treatments (12/92=100)—102.5106.0109.2102.9104.2104.9105.2106.4107.5108.5108.6109.1110.9111.5111.6111.6
    Medicare Patients (12/92=100)—100.6102.6104.7100.0102.3102.3102.3102.3103.6103.6103.6103.6107.8107.8107.8107.8
    Medicaid Patients (12/92=100)—102.3107.1109.8103.0104.3105.3106.0108.1108.9109.5109.6109.3110.6111.7112.5111.9
    All Other Patients (12/92=100)—103.5107.7111.7104.5105.3106.3106.7108.4109.4111.0111.1112.0112.6113.6113.4113.6
   Outpatient Treatments (12/92=100)—102.5106.7113.3103.0103.4105.0105.8107.6108.2111.9112.5114.0114.8115.6115.8116.6
    Medicare Patients (12/92=100)—103.7107.0111.2104.4104.1105.5106.0107.5108.8110.2111.1111.8111.8112.3112.5113.4
    Medicaid Patients (12/92=100)—101.6103.3106.4102.4101.9101.8101.2105.1105.1105.7105.9105.8108.0107.1107.1105.9
    All Other Patients (12/92=100)—102.4106.9114.2102.8103.4105.2106.2107.8108.4112.7113.2115.1115.8116.9117.1118.1
  Skilled and Intermediate Care Facilities (12/94=100)———103.6——————101.9102.8104.2105.6108.2109.5110.7
   Public Payors (12/94=100)———103.8——————101.8102.7104.4106.2108.6110.1111.2
   Private Payors (12/94=100)———103.6——————102.1103.2104.2105.1108.2109.1110.4
  Medical Laboratories (6/94=100)———104.0————100.099.9101.6103.4106.0105.0105.3105.2105.3
Commodity Groupings:
 Drugs and Pharmaceuticals192.2200.9206.0210.9202.0202.4204.6205.9206.3207.0208.5210.3211.2213.4213.8214.6215.2
  Ethical (Prescription) Preparations231.7242.2250.0257.0243.5244.5248.3250.1250.0251.4252.7255.8257.6261.8262.5265.1266.8
  Proprietary (Over-the-Counter) Preparations173.6180.0183.2186.6181.6181.6181.4182.6184.4184.5185.5186.6186.6187.5188.3184.5183.3
 Medical, Surgical, and Personal Aid Devices133.9137.8140.4141.3137.8138.3140.1140.3140.6140.5140.7140.8141.5142.1143.5143.4142.6
  Personal Aid Equipment120.2122.3130.1133.7121.9121.9127.8130.8130.9130.9131.2131.8135.1136.7136.8139.8140.2
  Medical Instruments and Equipment (6/82=100)123.4126.0126.7128.3125.8126.2126.4126.5126.8126.9127.8128.0128.8128.7130.3130.1129.7
  Surgical Appliances and Supplies (6/83=100)145.0151.0155.7154.8151.1151.7155.4155.7156.1155.4154.3154.1154.5156.2157.4158.1156.3
  Ophthalmic Goods (12/83=100)118.0119.0119.6122.2119.3119.4120.0119.4119.4119.8121.7121.8122.9122.6122.2119.7119.8
  Dental Equipment and Supplies (6/85=100)126.6131.5135.2137.5132.0131.6134.2135.0136.0135.7136.4137.9137.1138.7140.7140.7141.0

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. Quarterly data are not seasonally adjusted.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for January 1992-September 1996. U.S. Department of Labor, Bureau of Labor Statistics: Producer Price Indexes. Washington. U.S. Government Printing Office. Monthly reports for January 1992-September 1996.

Private Health Sector: Employment, Hours, and Earnings

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, 1996a). 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. Tables 4, 5, and 6 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 6

Percent Change in Implied Non-Supervisory Payrolls, Employment, Average Weekly Hours, and Average Hourly Earnings in Private Health Service Establishments by Selected Type of Establishment: 1992-96

Type of EstablishmentCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Annual Percent ChangePercent Change From the Same Period of Previous Year
Health Services
Payrolls8.56.65.45.76.25.85.55.35.35.65.85.35.76.15.96.46.4
 Employment3.73.02.52.93.02.82.62.62.52.52.62.63.03.53.63.63.3
 Average Weekly Hours0.70.10.1-0.20.00.00.10.0-0.10.20.1-0.2-0.1-0.4-0.8-0.5-0.2
 Average Hourly Earnings3.93.42.72.93.13.02.72.62.92.83.02.82.73.03.03.23.2
Offices and Clinics of Physicians
Payrolls7.56.96.26.46.55.66.55.55.96.96.35.96.17.28.210.611.4
 Employment4.02.42.54.02.41.61.91.92.63.43.64.03.94.34.24.64.7
 Average Weekly Hours0.80.20.50.20.20.30.70.40.10.90.20.10.40.10.41.01.1
 Average Hourly Earnings2.54.23.12.13.83.63.83.13.22.42.41.71.72.73.44.65.2
Offices and Clinics of Dentists
Payrolls6.16.57.37.16.97.18.17.76.86.66.76.17.18.58.79.810.5
 Employment2.12.83.04.02.82.93.13.32.82.93.13.34.55.05.65.64.9
 Average Weekly Hours0.2-0.3-0.5-0.6-0.2-0.20.1-0.7-0.8-0.5-0.5-0.9-0.8-0.2-0.60.61.3
 Average Hourly Earnings3.83.84.63.64.24.34.75.04.84.13.93.63.43.63.53.34.0
Nursing Homes
Payrolls7.47.18.36.57.28.29.18.47.87.87.26.36.36.14.85.34.7
 Employment2.83.33.92.73.64.34.54.23.93.02.82.52.63.02.72.92.7
 Average Weekly Hours0.5-0.30.30.5-0.3-0.70.20.0-0.21.00.60.30.70.4-0.30.0-0.4
 Average Hourly Earnings3.94.04.03.13.84.44.24.14.03.63.73.42.92.62.42.32.4
Private Hospitals
Payrolls7.64.52.23.63.83.02.21.92.22.53.23.53.54.44.24.44.1
 Employment2.70.6-0.70.60.4-0.3-0.7-0.8-0.8-0.5-0.20.30.81.42.02.01.8
 Average Weekly Hours0.60.50.2-0.30.50.50.50.20.1-0.1-0.1-0.1-0.6-0.5-0.9-0.9-0.5
 Average Hourly Earnings4.23.32.73.42.92.82.42.52.93.13.53.33.33.43.13.32.7
Home Health Care Services
Payrolls29.124.424.115.725.925.826.525.922.422.121.016.315.411.06.25.35.2
 Employment15.617.919.111.919.320.421.320.718.416.615.011.911.39.77.36.13.7
 Average Weekly Hours4.81.41.71.21.21.01.71.61.12.42.61.91.7-1.4-3.4-3.2-1.2
 Average Hourly Earnings6.64.12.52.34.23.52.62.72.32.32.52.12.02.62.42.62.7
Non-Farm Private Sector
Payrolls3.15.47.15.65.86.06.77.07.07.77.05.25.54.74.06.06.1
 Employment0.42.53.83.22.73.13.23.84.04.24.23.52.92.42.02.32.5
 Average Weekly Hours0.20.30.5-0.60.60.40.70.60.30.60.0-1.0-0.5-0.8-1.10.20.1
 Average Hourly Earnings2.42.52.72.82.32.52.62.52.62.82.72.73.03.03.13.43.4

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 1992- September 1996.

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 7 presents national indicators of output and inflation.
Table 7

Selected National Economic Indicators: 1992-96

ItemCalendar Year1993Q31993Q41994Q11994Q21994Q31994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3
1992199319941995
Gross Domestic Product
Billions of Dollars6,2446,5536,9367,2546,5746,6896,7766,8916,9937,0837,1507,2057,3107,3517,4277,5457,616
Billions of 1992 Chain Weighted Dollars6,2446,3866,6096,7436,3936,4696,5096,5886,6456,6946,7016,7146,7766,7816,8146,8936,928
Implicit Price Deflator (1992 = 100.0)100.0102.6104.9107.6102.8103.4104.1104.6105.2105.8106.7107.3107.9108.4109.0109.5109.9
Personal Income
Personal Income in Billions5,2645,4805,7536,1155,5025,6115,5625,7395,8085,9036,0056,0746,1476,2356,3096,4126,501
Disposable Income in Billions4,6144,7905,0225,3214,8054,8974,8574,9985,0775,1555,2355,2735,3495,4275,4845,5425,629
Prices1
Consumer Price Index, All Items140.3144.5148.2152.4144.8145.8146.7147.6148.9149.6150.9152.2152.9153.6155.0156.5157.4
 All Items Less Medical Care137.5141.2144.7148.6141.5142.4143.3144.1145.4146.0147.1148.4149.0149.7151.0152.5153.3
  Energy103.0104.2104.6105.2105.4103.8101.7103.5107.8105.4103.7106.5107.2103.5105.3112.0111.9
  Food and Beverages138.7141.6144.9148.9141.5142.7143.9144.1145.2146.2147.9148.7149.0150.0151.6152.8154.3
 Medical Care190.1201.4211.0220.5202.8204.8207.5209.8212.2214.7217.6219.3221.5223.4226.0227.4229.1
Producer Price Index,2 Finished Consumer Goods121.7123.0123.3125.6122.8122.3122.4123.0123.9123.7124.5125.7125.9126.4127.4129.3130.2
  Energy77.878.077.078.179.476.174.476.780.276.976.780.079.476.478.884.284.7
  Food123.3125.6126.8129.0125.4126.4127.1126.5126.4127.2128.3128.0129.1130.7131.1132.1134.9
  Finished Goods Except Food and Energy137.3138.5139.0141.9137.3137.6138.6138.7138.7139.8140.8141.6141.7143.7144.0144.2144.0
Annual Percent ChangePercent Change From the Same Period of Previous Year
Gross Domestic Product
Billions of Dollars5.54.95.84.64.84.85.25.96.45.95.54.64.53.83.94.74.2
Billions of 1992 Chain Weighted Dollars2.72.33.52.02.12.22.93.63.93.53.01.92.01.31.72.72.2
Implicit Price Deflator (1992 = 100.0)2.72.62.32.52.72.52.22.22.32.32.52.62.52.42.12.01.9
Personal Income
Personal Income in Billions6.04.15.06.34.53.64.05.15.65.27.95.85.85.65.15.65.8
Disposable Income in Billions6.23.84.86.04.13.33.64.75.75.37.85.55.35.34.85.15.2
Prices1
Consumer Price Index, All Items3.03.02.62.82.72.72.52.42.92.72.83.12.62.72.72.82.9
 All Items Less Medical Care2.72.72.52.72.52.52.42.22.72.52.73.02.52.52.72.82.9
  Energy0.51.10.50.6-0.3-0.4-0.9-1.12.31.51.92.9-0.6-1.81.65.24.4
  Food and Beverages1.42.12.32.82.02.52.31.92.72.52.73.22.62.62.52.83.6
 Medical Care7.46.04.84.55.95.55.04.74.64.84.94.64.44.13.83.73.4
Producer Price Index,2 Finished Consumer Goods1.01.10.21.90.4-0.2-0.3-1.00.91.21.72.21.62.22.32.93.4
  Energy-0.40.3-1.21.4-1.3-2.8-3.4-3.51.01.13.04.3-1.0-0.72.85.26.6
  Food-0.71.90.91.81.82.12.00.20.80.61.01.22.22.72.23.24.5
  Finished Goods Except Food and Energy2.70.90.32.10.3-0.5-0.5-0.81.01.61.62.02.22.82.31.81.6

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 1992-September 1996; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1992-September 1996.

Gross domestic product (GDP) measures the output of the 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, January/February 1996).

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 7, 8, and 9 present information on the all urban 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, 1996b].) 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. The CPI for medical care services also includes an indirect measure of price change for health insurance coverage purchased 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 PPI 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 7, 8, and 9 as the PPI. This 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 15 major commodity groupings. Although PPIs for medical commodities have existed for many 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—Offices 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 price changes in 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 HCPCS, HCPCS updates from the November 22, 1996, Federal Register, and other adjustments. Because of different methodologies, these two Medicare 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 SNF and 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 routine costs of Medicare inpatient services. 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 1992. Cost categories, such as food, fuel, and labor, are identified and their 1992 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 26 expenditure categories in the 1992-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 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 10-12 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 and the most recent PPS update for payment rates was published in the August 30, 1996, Federal Register. The latest HHA regulatory input price index was published in the July 1, 1996, 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 10

Quarterly Index Levels and Four-Quarter Moving Average Percent Change in the Prospective Payment System (PPS) Hospital Input Price Index, by Expense Category: 1994-98

Expense Category1Price/Wage VariableBase Year Weights FY 9221994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3Forecast
1996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q3
Index Levels
Total—100.000107.8108.9109.8110.4110.8111.6112.4113.1113.6114.5115.1116.1116.8117.7118.3119.4
Compensation—61.390108.7109.5110.1110.8111.5112.5113.2114.0114.9115.9116.7117.9118.8119.8120.4121.7
 Wages and SalariesHCFA Occupational Wage Index450.244108.0108.7109.3110.0110.8111.9112.6113.5114.3115.3116.1117.3118.3119.2119.8121.1
 Employee BenefitsHCFA Occupational Benefits Index411.146112.0112.8113.7114.2114.6115.4116.0116.5117.4118.7119.2120.5121.1122.5123.0124.4
Other Professional FeesECI—W/S: Professional/Technical (Private)2.127109.4110.2110.8111.6112.1113.5114.4115.0115.8116.9117.7119.1119.8120.8121.5122.9
Energy and Utilities3—2.470102.7102.5104.1106.0101.8103.9107.7110.0107.2106.9107.6108.3106.5106.4107.5108.9
Professional Liability InsuranceHCFA—Professional Liability Premium1.189100.999.598.798.398.298.798.698.497.997.196.796.596.596.696.697.0
All Other—32.825106.7108.6109.9110.5110.6110.9111.5111.9112.2112.9113.3113.7114.2115.1115.7116.3
 Other Products3—24.033106.1108.2109.8110.4110.3110.2110.7110.9111.0111.4111.7112.0112.3112.8113.4113.9
  PharmaceuticalsPPI—Prescription Drugs4.162110.0110.6112.0112.7114.6114.9116.0116.6117.4117.7118.4119.0120.0120.2121.6122.4
  Food: Direct PurchasePPI—Processed Foods2.363102.1103.1102.7104.4106.3106.8108.7111.2110.9111.6111.8111.7110.9111.6112.2112.7
  Food: Contract ServiceCPI—Food Away From Home1.096104.7105.4106.0106.6107.2107.7108.4109.3109.9111.2112.5113.6114.6115.9117.0118.0
  ChemicalsPPI—Industrial Chemicals3.795111.9116.7120.3118.8115.0114.6116.8116.3116.4116.4115.7116.0116.2116.6116.9117.5
  Medical InstrumentsPPI—Medical Instruments/Equipment3.128103.5104.3104.4105.0104.9106.3106.1105.9105.8106.8107.5107.4107.8108.7109.0109.0
  Rubber and PlasticsPPI—Rubber/Plastic Products4.868104.7106.9108.5109.1108.6107.8107.7108.0107.9107.9108.1108.4108.3108.1108.4108.9
  Paper ProductsPPI—Converted Paper and Paperboard2.062105.8111.2116.1119.6119.9117.6114.4112.2111.7112.3112.8112.6113.7115.1116.3116.6
 Other Services3—8.792108.3109.6110.3110.7111.3112.7113.5114.5115.5116.9117.6118.5119.6121.3122.1122.9
  Business ServicesECI—W/S: Business Services3.823108.8110.1110.8111.1111.7114.0114.2115.1116.2118.2118.9119.7120.9122.6123.3124.0
  Computer ServicesAHE—Data Processing Services1.927110.7111.8112.9113.2114.2115.6117.3119.3120.6121.8122.8124.2125.3126.6128.0129.2
4-Quarter Moving-Average Percent Change
Total—100.0002.72.93.13.23.13.02.72.52.52.52.52.62.62.72.72.8
Compensation—61.3903.13.02.92.72.62.62.72.82.93.03.03.13.23.33.33.3
 Wages and SalariesHCFA Occupational Wage Index450.2442.92.92.82.72.62.72.82.93.13.13.13.23.33.33.43.3
 Employee BenefitsHCFA Occupational Benefits Index411.1464.03.43.22.72.42.42.22.12.22.42.62.93.13.13.23.2
Other Professional FeesECI—W/S: Professional/Technical (Private)2.1273.33.12.92.62.42.62.83.03.23.23.13.23.23.33.43.3
Energy and Utilities3—2.4700.60.20.30.0-0.20.00.72.03.53.82.91.60.2-0.7-0.7-0.1
Professional Liability InsuranceHCFA—Professional Liability Premium1.189-1.8-2.5-3.0-3.3-3.2-2.6-1.8-0.9-0.3-0.5-0.9-1.4-1.7-1.5-1.0-0.4
All Other—32.8252.33.14.04.74.74.13.02.11.61.51.61.71.71.81.92.0
 Other Products3—24.0331.93.04.45.35.44.53.11.81.00.80.80.91.01.11.21.4
  PharmaceuticalsPPI—Prescription Drugs4.1623.22.72.42.52.83.33.73.83.33.02.62.32.22.12.32.5
  Food: Direct PurchasePPI—Processed Foods2.3631.20.4-0.20.11.22.23.85.05.05.34.53.01.90.80.20.3
  Food: Contract ServiceCPI—Food Away From Home1.0961.71.81.92.12.32.32.32.32.42.73.03.43.84.14.14.1
  ChemicalsPPI—Industrial Chemicals3.7953.58.213.114.712.47.42.2-1.1-1.4-0.6-0.10.40.0-0.30.20.6
  Medical InstrumentsPPI—Medical Instruments/Equipment3.1280.50.60.91.11.31.51.61.41.30.90.81.01.31.61.71.7
  Rubber and PlasticsPPI—Rubber/Plastic Products4.8681.42.74.35.65.74.42.50.6-0.4-0.6-0.30.00.30.30.30.3
  Paper ProductsPPI—Converted Paper and Paperboard2.0622.25.49.513.414.913.18.52.5-2.3-4.8-4.8-3.2-1.00.82.02.8
 Other Services3—8.7923.43.23.13.02.92.92.83.03.23.43.73.73.63.63.63.7
  Business ServicesECI—W/S: Business Services3.8233.93.53.12.92.72.93.03.23.63.63.83.93.94.03.83.7
  Computer ServicesAHE—Data Processing Services1.9274.33.73.83.63.53.53.54.04.65.15.34.94.54.24.04.0

For data sources used to estimate the input price index relative weights and choice of price proxies, see the August 30, 1996, 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 (0.345), Electricity (1.349), Natural Gas (0.670), and Water and Sewage (0.106). Other Products: Photographic Supplies (0.399), Apparel (0.875), Machinery and Equipment (0.211), and Miscellaneous Products (1.074). Other Services: Transportation and Shipping (0.188), Telephone (0.531), Postage (0.272), Other—Labor Intensive (1.707), and Other—Non-Labor Intensive (0.344).

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 represents Employment Cost Index, PPI represents Producer Price Index, and AHE represents Average Hourly Earnings. HCFA is Health Care Financing Administration. W/S is wages and salaries. FY is fiscal year. Q designates quarter of year. The 4-quarter moving-average percent change for the quarter indicated by the column heading 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-average index level for the same quarter 1 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 1 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 1996 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw-Hill.

Table 12

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change of the Home Health Agency (HHA) by Expense Category: 1994-98

Expense Category1Price/Wage VariableBase Year Weights FY9341994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3Forecast
1996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q3
Index Levels
Total—100.000104.8105.6106.2106.9107.5108.4109.1109.8110.6111.6112.3113.4114.3115.4116.0117.1
 Compensation2—77.668104.9105.5106.1106.7107.4108.2108.9109.7110.5111.6112.2113.3114.3115.3115.7116.9
  Wages and Salaries2HHA Occupational Wage Index564.226104.7105.3105.8106.6107.3108.2108.9109.8110.6111.6112.3113.4114.4115.3115.8117.0
  Employee Benefits2HHA Occupational Benefits Index513.442105.7106.4107.1107.5107.8108.4108.9109.2110.1111.3111.7112.9113.6115.0115.2116.4
 Operations and MaintenanceCPI(U)—Fuel and Other Utilities0.832101.3101.7102.2103.9102.5103.7105.3107.4106.7108.4109.0110.6108.8109.9110.7112.3
 Administrative and General3—9.569104.4106.4107.1108.2108.8109.7110.4111.4111.9112.8113.5114.4115.4117.4118.1119.1
  TelephoneCPI(U)—Telephone Services0.725102.0102.8102.5102.8103.0103.5103.6104.8105.1105.8106.3106.7106.8108.0108.8109.4
  Paper and PrintingCPI(U)—Household Paper Products0.529101.7103.4105.9109.6112.4113.8114.4113.3112.8113.4113.9113.7114.9116.3117.5117.8
  PostageCPI(U)—Postage0.724100.0110.3110.3110.3110.3110.3110.3110.3110.3110.3110.3110.3110.3122.3122.3122.3
  Other Administrative Costs3CPI(U)—Services7.591105.3106.5107.4108.5108.9110.0110.8112.0112.6113.7114.5115.5116.7117.9118.7119.8
 TransportationCPI(U)—Private Transportation3.405105.9106.4108.1107.5107.5108.5111.1110.4110.9110.7113.0113.0114.2114.8117.8118.6
 Capital-Related—3.204104.5105.2105.9106.5107.2107.7108.0108.8109.5110.0110.9112.2113.1113.9114.7115.7
  InsuranceCPI(U)—Household Insurance0.560106.5107.5108.3108.6108.3109.0109.9111.5112.1112.7113.9115.1115.8116.5117.3118.4
  Fixed CapitalCPI(U)—Owner's Equivalent Rent1.764105.5106.2106.9108.0109.1109.9110.4111.3112.4112.8114.1115.8116.9117.9118.8120.0
  Movable CapitalPPI—Machinery and Equipment0.880101.2101.8102.1102.2102.6102.7102.1102.1102.1102.5102.8103.3103.7104.3104.8105.3
 Other Expenses3CPI(U)—All Items less Food and Energy5.322104.6105.7106.5107.0107.8108.7109.3109.8110.7111.3112.3113.3114.6115.5116.6117.6
4-Quarter Moving-Average Percent Change
Total—100.0002.92.92.92.82.72.72.62.72.82.82.93.03.13.23.33.4
 Compensation2—77.6683.02.92.82.72.62.52.52.62.72.93.03.13.23.33.33.3
  Wages and Salaries2HHA Occupational Wage Index664.2262.82.82.82.72.62.62.72.82.93.13.13.23.23.33.33.3
  Employee Benefits2HHA Occupational Benefits Index513.4423.73.22.92.52.22.11.91.81.82.02.32.73.03.13.23.2
 Operations and MaintenanceCPI(U)—Fuel and Other Utilities0.8321.20.70.40.50.71.11.72.43.13.73.93.83.22.52.01.6
 Administrative and General3—9.5692.82.93.23.53.93.83.63.33.02.92.92.82.93.23.53.8
  TelephoneCPI(U)—Telephone Services0.7251.61.41.00.80.80.70.81.21.41.82.22.22.12.02.02.1
  Paper and PrintingCPI(U)—Household Paper Products0.5290.90.91.93.96.58.69.47.95.32.70.70.00.41.12.02.8
  PostageCPI(U)—Postage0.7240.02.65.27.710.37.54.92.40.00.00.00.00.02.75.48.1
  Other Administrative Costs3CPI(U)—Services7.5913.33.23.33.33.43.43.33.33.33.33.33.33.43.43.53.7
 TransportationCPI(U)—Private Transportation3.4053.03.94.84.43.72.92.32.32.72.72.42.32.32.73.34.0
 Capital-Related—3.2042.72.82.92.82.82.62.42.32.22.12.32.52.83.23.33.3
  InsuranceCPI(U)—Household Insurance0.5603.74.04.23.93.32.51.81.82.22.83.33.43.43.43.23.2
  Fixed CapitalCPI(U)—Owner's Equivalent Rent1.7643.33.33.33.43.33.43.43.33.23.03.03.23.53.94.24.1
  Movable CapitalPPI—Machinery and Equipment0.8800.91.01.01.01.21.10.80.50.0-0.20.00.30.81.31.61.8
 Other Expenses3CPI(U)—All Items less Food and Energy5.3222.92.92.92.93.03.02.92.82.72.62.62.83.03.33.63.7

For data sources used to estimate the input price index relative weights and choice of price proxies, see the July 1, 1996, Federal Register.

Includes allocated Contract Services' Labor.

Includes allocated Contract Services' Non-Labor.

Category weights may not sum to total because of rounding.

The HHA Occupational Wage and Occupational Benefit Indexes are computed as weighted-averages of 5 ECI categories (ECI for Civilian Hospital Workers and 4 ECI occupational categories).

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding 2 or more categories. CPI(U) represents Consumer Price Index for all urban consumers. CY is calendar year. Q designates quarter of year. An example of how a percent change is calculated is shown in the Notes at the end of Table 10.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics Division of Health Cost Analysis. Fourth–quarter 1996 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 10, the SNF input price index is in Table 11, and the HHA input price index is in Table 12.
Table 11

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the Skilled Nursing Facility Input Price Index, by Expense Category: 1994-98

Expense Category1Price/Wage VariableBase Year Weights CY 7721994Q41995Q11995Q21995Q31995Q41996Q11996Q21996Q3Forecast
1996Q41997Q11997Q21997Q31997Q41997Q11998Q21998Q3
Index Levels
Total—100.000260.2262.9263.9265.5267.2269.6270.9272.7276.0280.0280.6282.3285.6289.7290.6292.8
Compensation—70.620266.2269.3270.0271.6273.1275.5276.0277.7281.4286.4286.6288.6292.9297.9298.4300.7
  Wages and SalariesAHE—Nursing Facilities63.020263.5266.6267.2268.7270.3273.0273.3275.0278.9283.9284.0285.8290.3295.5295.8298.1
  Employee BenefitsBEA—Supplement to Wages/Salaries per Worker7.600288.5291.9293.4295.2296.3296.5298.3300.0302.1306.5308.5311.2314.1317.9320.1322.6
 Fuel and Other Energy—4.270231.8231.4231.9232.4231.6239.9245.3243.5247.0247.0245.5243.2242.3243.1244.2245.5
  Fuel Oil and CoalIPD—Fuel Oil and Coal1.660202.3201.4204.2204.9201.4219.5226.4219.1225.8222.8217.5210.6208.3208.3208.5208.6
  ElectricityIPD—Electricity1.210223.7224.9225.1227.9230.0229.3229.9232.1234.1233.3231.9231.1230.4230.9231.3231.5
  Natural GasIPD—Natural Gas0.910246.4243.3239.4234.9233.9237.7245.5249.5250.0253.6255.6254.6253.4253.4254.7256.5
  Water and Sewerage MaintenanceCPI(U)—Water and Sewage0.490324.2326.8328.4331.8333.4339.6347.0342.9345.1350.7355.4362.8366.6372.0377.5384.9
 Food—9.740195.4196.4197.2199.4201.8202.2205.2209.2211.0212.4213.4214.1214.7215.5216.6217.8
  Direct PurchasePPI—Processed Foods4.930168.7169.5169.2172.4175.7175.5179.0183.7184.3184.7184.8184.6184.3184.8185.6186.3
  Contract ServiceCPI(U)—Food and Beverages4.810222.8223.9225.8227.0228.6229.6232.0235.3238.4240.8242.6244.4245.8247.1248.4250.0
 All Other—15.370281.8284.3287.1288.9291.0293.3296.1298.0300.3302.6305.1307.3309.4311.6314.6317.1
  PharmaceuticalsPPI—Prescription Drugs1.500382.5384.5389.2391.8398.3399.4403.3405.4408.1409.1411.7413.7417.1417.7422.8425.3
  SuppliesCPI(U)—All Items3.280246.9248.9251.1252.2253.4255.7258.3259.6261.6263.3265.6267.4268.9270.5273.0275.2
  Health ServicesCPI(U)—Physicians' Services1.210346.0351.5355.8359.1361.5366.3368.8371.1373.5378.9382.5385.4388.0393.9397.6401.1
  Other Business ServicesCPI(U)—Services4.590293.2295.9298.9301.2303.4305.5308.3311.2314.0316.8319.4322.0324.7327.6330.5333.3
  Miscellaneous CostsCPI(U)—All Items4.790246.9248.9251.1252.2253.4255.7258.3259.6261.6263.3265.6267.4268.9270.5273.0275.2
4-Quarter Moving-Average Percent Change
Total—100.0003.43.23.13.02.92.72.72.62.83.13.43.63.63.53.53.6
 Compensation—70.6203.83.63.43.23.02.72.52.42.52.93.33.73.94.04.04.1
  Wages and SalariesAHE—Nursing Facilities63.0204.03.83.73.43.12.82.62.42.63.03.43.84.04.04.14.2
  Employee BenefitsBEA—Supplement to Wages/Salaries per Worker7.6002.21.91.81.92.22.12.11.91.72.12.63.13.63.73.83.8
 Fuel and Other Energy—4.2700.7-0.1-0.4-0.3-0.30.92.43.55.25.03.62.30.3-0.9-1.0-0.8
  Fuel Oil and CoalIPD—Fuel Oil and Coal1.660-1.5-2.0-1.6-0.8-0.62.35.16.69.77.73.91.2-3.5-5.5-5.6-4.9
  ElectricityIPD—Electricity1.2100.10.30.91.62.22.32.32.21.91.91.61.00.2-0.5-0.8-0.7
  Natural GasIPD—Natural Gas0.9101.9-0.9-3.2-4.4-5.1-4.6-2.60.33.35.66.04.93.51.80.70.4
  Water and Sewerage MaintenanceCPI(U)—Water and Sewage0.4905.04.64.03.53.13.23.83.94.13.93.13.84.45.16.16.2
 Food—9.7401.91.61.51.62.12.53.13.84.14.74.64.03.32.41.81.6
  Direct PurchasePPI—Processed Foods4.9301.20.4-0.20.11.22.33.85.05.25.65.03.42.20.90.20.3
  Contract ServiceCPI(U)—Food and Beverages4.8102.42.62.92.82.82.72.62.93.33.94.44.44.13.53.02.6
 All Other—15.3703.13.03.13.13.23.23.23.23.23.23.13.13.13.03.13.1
  PharmaceuticalsPPI—Prescription Drugs1.5003.22.72.42.52.83.33.73.83.33.02.62.32.22.12.32.5
  SuppliesCPI(U)—All Items3.2802.62.72.92.82.82.82.72.82.93.03.03.02.92.82.82.8
  Health ServicesCPI(U)—Physicians' Services1.2104.44.44.44.54.54.54.33.93.63.43.43.63.73.83.94.0
  Other Business ServicesCPI(U)—Services4.5903.33.23.33.33.43.43.33.33.33.43.53.63.53.53.43.5
  Miscellaneous CostsCPI(U)—All Items4.7902.62.72.92.82.82.82.72.82.93.03.03.02.92.82.82.8

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 represents Average Hourly Earnings, BEA represents Bureau of Economic Analysis, IPD represents Implicit Price Deflator from the Department of Commerce, CPI(U) represents Consumer Price Index for all urban consumers, and PPI represents Producer Price Index. CY is calendar year. Q designates quarter of year. An example of how a percent change is calculatedis shown in the notes at the end of Table 10.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Fourth quarter 1996 forecasts were produced under contract to HCFA by Data Resources, Inc./McGraw–Hill.

Medicare Economic Index

In 1972, Congress mandated the development of the 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 22, 1996, 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 shares by cost category are determined. Second, price proxies are selected to match each relative 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 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 four 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 these 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 are presented in Table 13 as index levels and 4-quarter moving average percent changes.

北京卡尤迪生物科技股份有限公司 © 2022-2023.