Literature DB >> 11481776

Hospital, employment, and price indicators for the health care industry: second quarter 1999.

M L Seifert1, S K Heffler, C S Donham.   

Abstract

This feature presents highlights from statistics on health care utilization, prices, expenses, employment, and work hours, as well as on national economic activity, with brief analysis of these economic indicators. These statistics provide an early indication of changes occurring in the health care sector and within the general economy. Although most statistics include data for the second quarter of 1999, American Hospital Association data are through the third quarter of 1998.

Entities:  

Mesh：

Year:  1999        PMID： 11481776      PMCID： PMC4194650     

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


Hospital Insurance (HI) Trust Fund assets rose 4.7 percent in the second quarter of 1999, compared with the same period of the previous year. Estimates in the 1999 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999) indicate that, given current law and trends, the HI Trust Fund will be exhausted in 2015. The recent declines in home health care services employment slowed, as employment fell 3.3 percent in the second quarter of 1999, compared with the second quarter of 1998. This followed declines of 8.1 percent and 6.6 percent in the fourth quarter of 1998 and the first quarter of 1999, respectively. Home health care employment and payroll decreases began in early 1998, following public sector actions to control Medicare spending growth and ongoing actions to detect fraud and abuse. Employment in all private and government hospitals rose by 1.1 percent in the second quarter of 1999, driven by a 1.2-percent increase in private hospital employment and a 2.1-percent increase in local government hospital employment. Employment in State government hospitals rose for the first time since the third quarter of 1992, while employment in Federal Government hospitals continued to decline. Medical services price growth had leveled off for a few quarters but continued to outpace growth in overall prices in the second quarter of 1999, even including recent energy price increases. Although hospital inpatient and outpatient producer prices have grown at similar rates over the past few years, the underlying patterns of growth by payer type have been very different. Prices increased more slowly for public payers than for all other payers for inpatient services but increased faster than for all other payers for outpatient services. Nursing home price growth continued to decelerate in the second quarter of 1999, moving closer to the rate in input prices in the industry. Although most statistics include data for the second quarter of 1999, American Hospital Association data (Tables 1 and 2) go through to the third quarter of 1998.
Table 1

Selected Community Hospital Statistics: 1995-1998

ItemCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q3
199519961997
Utilization
All Ages
Admissions in Thousands33,38933,26833,3888,2678,1598,3318,5008,3428,2658,2818,6408,3268,361
Admissions per 1,000 Population2122121120120118121123120119119124119119
Inpatient Days in Thousands190,377183,495181,31345,53244,34945,56347,17745,17744,19344,76647,55344,60744,545
Adult Length of Stay in Days5.75.55.45.55.45.55.55.45.35.45.55.45.3
65 Years of Age or Over
Admissions in Thousands12,82012,87013,0503,2043,0903,2523,3743,2533,1733,2503,4793,2603,193
Admissions per 1,000 Population2375373375372357375389374364373398373365
Inpatient Days in Thousands91,16486,43185,31521,44520,44821,56622,66121,17920,43121,04422,94120,85920,295
Adult Length of Stay in Days7.16.76.56.76.66.66.76.56.46.56.66.46.4
Under 65 Years of Age
Admissions in Thousands20,56920,39820,3395,0635,0705,0785,1265,0895,0925,0325,1625,0665,168
Admissions per 1,000 Population286858484848485848482848384
Inpatient Days in Thousands99,21397,06495,99924,08723,90223,99724,51623,99923,76223,72224,71223,74824,251
Adult Length of Stay in Days4.84.84.74.84.74.74.84.74.74.74.84.74.7
Surgical Operations in Thousands23,73924,16524,6016,0876,0286,1026,0476,2456,1976,1116,2006,4056,461
Outpatient Visits in Thousands452,558481,298507,523119,874122,232122,857123,270127,607128,285128,361131,411135,812138,222
Adjusted Patient Days in Thousands3273,638270,023275,86467,39466,24767,08770,05068,81368,25868,68272,26169,19670,246
Beds in Thousands874854833859849844842832829830829827825
Adult Occupancy Rate459.758.759.658.356.858.762.359.757.958.763.859.358.7
Total Hospital Revenues in Millions5$324,961$338,118$349,329$84,396$83,449$85,993$86,941$87,073$87,092$88,223$91,024$89,187$89,695
 Total Patient Revenues in Millions307,228318,183327,93879,34978,46180,66481,99881,78181,44182,71785,39183,58384,102
  Inpatient Revenues in Millions213,771216,242215,55853,60952,52654,78455,22353,69252,72853,91456,19453,88253,331
  Outpatient Revenues in Millions93,457101,941112,38025,74025,93425,88026,77428,09028,71328,80329,19729,70130,770
Total Expenses
Total Hospital Expenses in Millions$308,411$320,789$331,482$79,958$79,593$81,877$82,092$82,694$82,835$83,862$85,251$86,155$86,169
 Labor in Millions163,842168,796173,04741,93541,92543,06342,88842,95843,32643,87544,50244,57644,812
 Non-Labor in Millions144,569151,993158,43538,02337,66838,81439,20439,73539,50939,98640,74941,58041,357
Inpatient Expense in Millions6$214,570$217,994$217,869$54,020$53,284$55,608$55,287$54,291$53,631$54,660$56,102$55,540$54,643
 Amount per Patient Day1,1271,1881,2021,1861,2011,2201,1721,2021,2141,2211,1801,2451,227
 Amount per Admission6,4266,5536,5256,5346,5306,6756,5046,5086,4896,6006,4936,6716,535
Outpatient Expense in Millions6$93,841$102,796$113,614$25,937$26,309$26,269$26,805$28,403$29,204$29,201$29,149$30,615$31,527
 Amount per Outpatient Visit207214224216215214217223228227222225228

Collection of American Hospital Association (AHA) data used in this table was discontinued after third quarter 1998.

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 National Health Statistics Group. 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 National Health Statistics Group. 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 1995-September 1998.

Table 2

Percent Change in Selected Community Hospital Statistics: 1995-1998

ItemCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q3
199519961997
Annual Percent ChangePercent Change from Same Period of Previous Year
Utilization
All Ages
Admissions in Thousands1.4-0.40.4-0.2-0.70.9-0.10.91.3-0.61.6-0.21.2
Admissions per 1,000 Population0.4-1.3-0.6-1.1-1.6-0.1-1.10.00.4-1.50.7-1.10.3
Inpatient Days in Thousands-2.9-3.6-1.2-3.7-4.1-1.9-1.8-0.8-0.4-1.70.8-1.30.8
Adult Length of Stay in Days-4.2-3.3-1.5-3.6-3.5-2.8-1.7-1.7-1.6-1.2-0.8-1.1-0.4
65 Years of Age or Over
Admissions in Thousands2.90.41.40.50.62.21.51.52.7-0.13.10.20.7
Admissions per 1,000 Population1.8-0.50.6-0.4-0.31.20.60.71.9-0.72.5-0.40.1
Inpatient Days in Thousands-3.9-5.2-1.3-6.0-4.9-2.2-1.4-1.2-0.1-2.41.2-1.5-0.7
Adult Length of Stay in Days-6.6-5.6-2.7-6.5-5.5-4.3-2.8-2.7-2.7-2.3-1.8-1.7-1.3
Under 65 Years of Age
Admissions in Thousands0.4-0.8-0.3-0.6-1.40.0-1.20.50.4-0.90.7-0.51.5
Admissions per 1,000 Population-0.5-1.7-1.2-1.5-2.3-0.9-2.1-0.4-0.5-1.8-0.3-1.40.6
Inpatient Days in Thousands-2.0-2.2-1.1-1.6-3.4-1.7-2.2-0.4-0.6-1.10.8-1.02.1
Adult Length of Stay in Days-2.4-1.3-0.8-1.0-2.0-1.7-1.1-0.9-1.0-0.20.1-0.60.6
Surgical Operations in Thousands1.91.81.82.13.43.21.72.62.80.22.52.64.3
Outpatient Visits in Thousands8.36.45.45.47.97.46.06.55.04.56.66.47.7
Adjusted Patient Days in Thousands-0.9-1.32.2-1.1-1.20.01.22.13.02.43.20.62.9
Beds in Thousands-1.8-2.4-2.4-2.1-2.6-2.6-2.4-3.1-2.3-1.7-1.6-0.7-0.6
Adult Occupancy Rate1-0.7-0.90.9-1.0-0.90.41.01.41.10.01.5-0.40.8
Total Hospital Revenues in Millions5.04.03.34.23.95.13.23.24.42.64.72.43.0
 Total Patient Revenues in Millions4.83.63.13.63.34.42.93.13.82.54.12.23.3
  Inpatient Revenues in Millions2.61.2-0.30.90.32.4-0.20.20.4-1.61.80.41.1
  Outpatient Revenues in Millions9.99.110.29.99.98.99.89.110.711.39.05.77.2
Total Expenses
Total Hospital Expenses in Millions5.34.03.34.23.64.23.43.44.12.43.84.24.0
 Labor in Millions4.53.02.52.92.63.32.42.43.31.93.83.83.4
 Non-Labor in Millions6.35.14.25.74.85.24.64.54.93.03.94.64.7
Inpatient Expense in Millions3.21.6-0.11.40.62.20.40.50.6-1.71.52.31.9
 Amount per Patient Day6.35.41.15.34.94.22.21.31.00.00.73.61.1
 Amount per Admission1.82.0-0.41.61.31.30.5-0.4-0.6-1.1-0.22.50.7
Outpatient Expense in Millions10.59.510.510.510.28.710.49.511.011.28.77.88.0
 Amount per Outpatient Visit2.03.04.84.82.21.24.22.95.86.42.01.30.2

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 1995-September 1998.

Key Trends

Medicare Trust Fund Operations

Total Medicare outlays, the sum of HI (Part A) and Supplementary Medical Insurance (SMI) (Part B) outlays, increased 0.3 percent in the second quarter of 1999. Although Medicare Part A outlays fell 1.0 percent, Part B outlays rose 2.4 percent. The HI Trust Fund income grew 5.4 percent, and by the end of the second quarter of 1999, the level of assets in the HI Trust Fund increased 4.7 percent from the same period 1 year earlier (Table 3). This was the fifth consecutive quarterly increase in assets and was attributable to the 5.4 percent income increase, coupled with a 1.0-percent decrease in outlays. A strong economy with low unemployment continued to boost HI Trust Fund income, while outlays slowed for reasons similar to those explaining lower outlays in 1998: lower Medicare hospital updates for reimbursement rates for 1998 and 1999 and other cost-restraining strategies under the Balanced Budget Act of 1997 (BBA) and continuing efforts to combat fraud and abuse. Estimates found in the 1999 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999) indicate that, given current law and trends, the HI Trust Fund will be exhausted in 2015.
Table 3

Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) Trust Fund Operations: 1995-1999

IndicatorCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Millions of Dollars
Total Medicare Outlays$184,203$200,337$213,600$213,228$49,642$50,599$52,639$50,084$53,696$53,922$55,897$50,818$53,692$53,165$55,553$48,626$53,841
 HI Trust Fund117,604129,929139,475133,67132,16032,61533,86633,40735,30735,20835,55230,52633,94235,23033,97330,83433,612
 SMI Trust Fund66,59970,40874,12579,55717,48217,98418,77316,67718,38918,71420,34520,29219,75017,93521,58017,79220,229
HI Trust Fund Operations
Income$115,027$124,603$130,107$140,546$37,000$27,840$33,470$29,535$36,644$28,852$35,075$31,551$41,080$30,496$37,419$34,678$43,304
Outlays117,604129,929139,475133,67132,16032,61533,86633,40735,30735,20835,55230,52633,94235,23033,97330,83433,612
Difference(2,577)(5,325)(9,368)6,8754,840(4,774)(396)(3,873)1,337(6,356)(477)1,0257,138(4,734)3,4463,8443,231
Assets at End of Period1130,267124,942115,573122,448130,112125,338124,942121,069122,406116,050115,573116,598123,736119,002122,448126,292129,523
SMI Trust Fund Operations
Income$60,306$85,609$81,924$87,712$19,653$19,208$20,152$19,906$20,855$19,893$21,270$19,803$20,998$19,884$27,027$15,389$22,098
Outlays66,59970,40874,12579,55717,48217,98418,77316,67718,38918,71420,34520,29219,75017,93521,58017,79220,229
Difference(6,293)15,2027,7998,1552,1711,2241,3783,2292,4661,179925(489)1,2481,9495,447(2,403)1,869
Assets at End of Period113,13028,33236,13144,28625,72926,95328,33231,56134,02735,20636,13135,64236,89038,83944,28641,88343,752
Annual Percent ChangePercent Change from the Same Period of the Previous Year
Total Medicare Outlays11.78.86.6-0.26.28.713.05.58.26.66.21.50.0-1.4-0.6-4.30.3
 HI Trust Fund12.510.57.3-4.25.411.715.86.89.88.05.0-8.6-3.90.1-4.41.0-1.0
 SMI Trust Fund10.45.75.37.37.83.68.43.15.24.18.421.77.4-4.26.1-12.32.4
HI Trust Fund Operations
Income5.08.34.48.04.014.811.612.3-1.03.64.86.812.15.76.79.95.4
Outlays12.510.57.3-4.25.411.715.86.89.88.05.0-8.6-3.90.1-4.41.0-1.0
Assets at End of Period-1.9-4.1-7.55.9-3.2-3.2-4.1-3.4-5.9-7.4-7.5-3.71.12.55.98.34.7
SMI Trust Fund Operations
Income8.542.0-4.37.114.390.721.6-25.26.13.65.5-0.50.70.027.1-22.35.2
Outlays10.45.75.37.37.83.68.43.15.24.18.421.77.4-4.26.1-12.32.4
Assets at End of Period-32.4115.827.522.621.694.3115.834.032.230.627.512.98.410.322.617.518.6

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

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

SOURCES: (U.S. Department of the Treasury, 1998; Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999; Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund, 1999.)

Health Sector Employment and Payrolls

The 1.3 percent increase in private health services employment in the second quarter of 1999 masks a third consecutive quarterly drop in nursing home employment (-0.6 percent) and a continuing decline in home health care services employment (-3.3 percent). Following nine quarters of decelerating growth, nursing home employment experienced declines of 0.4 percent and 0.6 percent in the fourth quarter of 1998 and the first quarter of 1999, respectively, before registering another 0.6 percent drop in the second quarter, compared with the same period of 1998. These declines in employment began during the implementation of a prospective payment system (PPS) for nursing homes. Home health care's employment decrease of 3.3 percent in the second quarter of 1999 is less severe than decreases experienced over the previous four quarters and suggests that the brunt of industry's reaction to the implementation of Medicare spending controls in the fourth quarter of 1997 is attenuating. The rapid employment growth of 1988-1993 began to slow after the first quarter of 1994; actual decreases began in the first quarter of 1998. These declines followed public sector actions to control Medicare spending and continuing actions to detect fraud and abuse activities.

Hospitals

Employment in all private and government hospitals increased by 1.1 percent in the second quarter of 1999, compared with the same quarter of the previous year. Private hospital employment grew by 1.2 percent, while local government hospital employment rose by 2.1 percent, and State government hospital employment increased for the first time since the third quarter of 1992. Only employment in Federal Government hospitals failed to grow, decreasing by 2.0 percent in the second quarter of 1999. Private hospitals' share of total hospital employment has increased steadily from 68.8 percent in 1982 to 76.5 percent in 1998. The Federal hospitals' share has decreased from a high of 5.8 percent in 1985 to 4.3 percent in 1998. State hospitals' share has dropped steadily from 11.3 percent in 1982 to 6.8 percent in 1998, and local hospitals' share has dipped from 14.5 percent in 1982 to 12.4 percent in 1998. Part of the local share long-term decline may be the merging of for-profit (private) facilities with local community facilities in order to gain bargaining power in negotiating with managed care organizations and to improve administrative efficiency. By the end of the second quarter of 1999, the private hospital and local hospital shares of total hospital employment had each risen slightly from their 1998 levels, while the State and Federal shares continued to decline.

Medical Prices

Medical services prices continued to grow faster than overall prices, as measured by the gross domestic product (GDP) implicit price deflator, in the second quarter of 1999. Annual growth in the Consumer Price Index (CPI) for medical services has been around 3.4-3.5 percent over the past four quarters. The Producer Price Index (PPI) for health services has grown approximately 2.0 percent over this same period. At the same time, annual growth in the GDP implicit price deflator has remained near 1.0 percent, although slightly higher recently because of rising energy prices. The widening gap between medical prices and overall prices is in contrast to most of the 1991-1997 period, where medical inflation (as measured by the CPI) and overall inflation were converging. This same pattern existed for the PPI for health services, except that the growth in the PPI is much closer to that in the GDP implicit price deflator. The difference in growth between the CPI for medical care services and the PPI for health services reflects two main factors. First, there are substantial methodological differences between the two indexes. For example, the PPI includes price changes from public payers, such as Medicare and Medicaid, while the CPI includes only price changes associated with out-of-pocket expenses. Also, the PPI includes prices for home health care services, but the CPI does not, and the CPI includes prices for dental and eye care services that the PPI does not. Second, the PPI captures transaction prices, but the CPI in some cases measures changes in list (undiscounted) prices.

Hospital Inpatient and Outpatient Producer Prices

Growth in the PPI for hospital inpatient and outpatient treatments has been similar since 1996. For the second quarter of 1999, inpatient prices increased 1.4 percent over the year and outpatient prices increased 1.6 percent. From 1996 to 1998, the two indexes grew at nearly the same rate, differing by just 0.2 percentage points on average per year. However, underlying this overall similarity for inpatient and outpatient prices are different trends by payer type. For hospital inpatient services, slow growth in Medicare prices (0.4 percent in the second quarter of 1999) and Medicaid prices (0.0 percent in the second quarter of 1999) have been offset by relatively faster growth in prices faced by private patients (2.3 percent in the second quarter of 1999). This has been the trend since 1997 and can be traced directly to low updates in hospital payments under Medicare PPS as mandated by the BBA. By comparison, hospital outpatient producer price changes have exhibited the exact opposite trend since 1997. Medicare price growth (4.1 percent in the second quarter of 1999) for outpatient services has far outpaced price growth for private patients (1.1 percent in the second quarter of 1999). This mostly reflects the different Medicare payment methodologies for hospital inpatient and outpatient services. The inpatient payments are paid prospectively based on an admission diagnosis, while outpatient payments are based on costs. The BBA mandated that Medicare outpatient payments be made on a prospective basis beginning January 1, 1999, although the implementation date was delayed.

Nursing Home Prices

Nursing home price growth, as measured by the CPI and PPI, continued to decelerate in the second quarter of 1999. This deceleration in growth for nursing home prices has brought these rates closer in line with HCFA's skilled nursing facility (SNF) input price index. In the second quarter of 1999, the CPI for nursing home services was greater than HCFA's SNF input price index by 1.2 percentage points (4.0 percent versus 2.8 percent). This compares with a 1.9-percentage point differential when the CPI for nursing homes was first introduced. The trend is even more significant for the PPI for skilled and intermediate care facilities. The difference in growth for the second quarter of 1999 was 0.8 percentage points (3.6 percent versus 2.8 percent). When the PPI was initially published, it grew 3.5 percentage points faster. The recent deceleration in nursing home prices has coincided with the implementation of the Medicare SNF PPS in July 1998.

Background Information on Data Sources and Methods

Community Hospital Statistics

From 1963 to September 1998, the American Hospital Association, in cooperation with member hospitals, collected 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 1997, 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 sampled approximately one-third of all U.S. community hospitals. The sample was designed to produce estimates of community hospital indicators by bed size and region (American Hospital Association, 1963-1998). In Tables 1 and 2, statistics covering expenses, utilization, beds, and personnel depict trends in the operation of community hospitals annually for 1994 to 1997 and quarterly from 1995 through the third quarter of 1998, after which data collection was discontinued. 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 one segment of NHE accounted for 30 percent of all health spending in 1998 (Cowan et al., 1999). The survey also identified important factors influencing expenditure growth patterns, such as changes in the number of beds in operation, number of admissions, length of stay, use of outpatient facilities, and number of surgeries. Separate trust funds finance the operations of the two parts of the Medicare program. The HI program, or Medicare Part A, helps pay for inpatient hospital, home health care, 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 SMI program, or Medicare Part B, pays for physician, outpatient hospital, home health care, 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 (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999; Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund, 1999). Data on the financial operations of the Medicare trust funds 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, 1998); the 1999 annual reports of the Boards of Trustees of the HI and SMI Trust Funds (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999;Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund, 1999) contain detailed accounting of all financial operations for the prior fiscal year. The reports also contain actuarial analysis of the expected operations of the trust funds in future years and analysis of the actuarial status of the funds.

Private Health Sector: Employment, Hours, and Earnings

The Bureau of Labor Statistics (BLS) collects monthly information on employment for all workers, and employment, earnings, and work hours for non-supervisory workers in a sample of approximately 305,000 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, 1999a). 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, also record employment. In the Current Population Survey, however, each person's employment status is counted only once, as either employed, unemployed, or not in the labor force, which includes discouraged workers.) 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 4

Percent Change in Employment, Hours, and Earnings in Private Health Service Establishments, by Selected Type of Establishment: 1995-1999

Type of EstablishmentCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Total Employment in Thousands
Non-Farm Private Sector97,885100,189103,133106,007100,073101,379101,769100,362103,027104,261104,882103,432105,972107,129107,495105,879108,433
 Health Services9,2309,4789,7039,8469,4519,5219,5769,6079,6849,7399,7819,7799,8319,8729,9019,8969,958
  Offices and Clinics of Physicians1,6091,6781,7391,8031,6721,6921,7001,7121,7321,7471,7651,7731,7921,8151,8321,8401,860
  Offices and Clinics of Dentists592611629646608614619623628631634636643649655657666
  Nursing Homes1,6911,7301,7561,7621,7251,7401,7451,7421,7531,7641,7671,7601,7631,7651,7601,7501,752
  Private Hospitals3,7723,8123,8603,9263,8063,8183,8293,8363,8523,8703,8833,8933,9173,9433,9523,9523,966
  Home Health Care Services629675710672671679694701713714714692678660656646656
Non-Supervisory Employment in Thousands
Non-Farm Private Sector80,12582,09284,54186,76282,02283,16783,51282,07184,50585,55686,03284,49586,76287,75488,03586,41888,733
 Health Services8,1788,4058,5998,7248,3818,4428,4928,5128,5858,6328,6688,6688,7138,7498,7658,7628,819
  Offices and Clinics of Physicians1,3141,3771,4281,4861,3721,3891,3961,4041,4231,4351,4501,4621,4781,4981,5061,5131,529
  Offices and Clinics of Dentists517535550563534538543545549552553555561565570574582
  Nursing Homes1,5261,5591,5791,5851,5541,5671,5701,5671,5761,5861,5881,5831,5861,5881,5811,5721,573
  Private Hospitals3,4503,4893,5373,5983,4843,4963,5073,5133,5293,5473,5603,5683,5903,6143,6203,6213,635
  Home Health Care Services582624655618621628642646657657657638624608604595604
Average Weekly Hours
Non-Farm Private Sector34.534.434.634.634.434.834.634.334.634.934.834.434.534.834.734.234.5
 Health Services32.832.733.033.132.632.832.832.933.033.133.133.233.033.133.032.932.8
  Offices and Clinics of Physicians32.532.933.233.032.832.933.233.233.233.133.333.332.932.832.932.732.8
  Offices and Clinics of Dentists28.028.228.428.328.228.228.428.428.628.228.528.428.228.328.327.927.8
  Nursing Homes32.532.432.432.632.332.732.332.332.332.732.532.432.432.932.632.232.4
  Private Hospitals34.534.434.935.034.334.334.434.634.834.935.135.234.934.934.934.934.6
  Home Health Care Services28.628.128.929.027.828.328.328.628.929.029.129.229.029.128.928.829.0
Average Hourly Earnings
Non-Farm Private Sector11.4311.8112.2812.7811.7411.8212.0112.1512.1812.2712.5112.6512.7012.7812.9813.1113.16
 Health Services12.4512.8513.2613.7312.7812.8713.0113.1313.1713.2913.4613.5713.6513.7713.9114.0514.11
  Offices and Clinics of Physicians12.5413.1713.7914.3113.0813.2213.4413.6113.6713.8314.0314.1914.2614.2914.5014.6214.75
  Offices and Clinics of Dentists12.4012.8813.6314.1612.7712.9213.1713.4613.5813.6213.8513.9814.0814.1814.3914.5314.69
  Nursing Homes8.779.019.349.778.959.029.109.209.269.409.519.639.719.829.9010.0110.07
  Private Hospitals14.3014.7015.0315.4614.6314.7314.8114.9114.9415.0515.2215.2815.3615.5415.6715.8215.87
  Home Health Care Services10.9111.1811.3511.4911.1311.2211.2811.3611.2911.3311.4011.4011.4111.5311.6311.8111.91
Hospital Employment in Thousands
Total5,0695,0675,0775,1325,0685,0665,0655,0605,0695,0855,0925,0965,1215,1525,1605,1645,179
Private3,7723,8123,8603,9263,8063,8183,8293,8363,8523,8703,8833,8933,9173,9433,9523,9523,966
Federal233232224223233231229225224225224224224224221221220
State395376360348378372368366362358354349347348348349348
Local669648632635651646640633631632631631633637640642646

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, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999.

Table 5

Percent Change in Employment, Hours, and Earnings in Private Health Service Establishments, by Selected Type of Establishment: 1995-1999

Type of EstablishmentCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Annual Percent ChangePercent Change from the Same Period of Previous Year
Total Employment in Thousands
Non-Farm Private Sector3.02.42.92.82.32.52.62.93.02.83.13.12.92.82.52.42.3
 Health Services2.72.72.41.52.82.72.62.62.52.32.11.81.51.41.21.21.3
  Offices and Clinics of Physicians4.14.33.63.74.64.43.83.83.63.33.83.63.53.93.83.83.7
  Offices and Clinics of Dentists3.33.13.02.73.03.03.33.63.12.82.42.22.52.93.33.33.5
  Nursing Homes2.62.31.50.32.62.21.91.71.61.41.31.10.60.1-0.4-0.6-0.6
  Private Hospitals0.21.01.31.71.01.01.21.11.21.41.41.51.71.91.81.51.2
  Home Health Care Services12.47.35.3-5.58.26.46.37.26.35.12.8-1.3-4.9-7.5-8.1-6.6-3.3
Non-Supervisory Employment in Thousands
Non-Farm Private Sector3.22.53.02.62.42.62.73.03.02.93.03.02.72.62.32.32.3
 Health Services2.72.82.31.42.92.72.72.52.42.22.11.81.51.41.11.11.2
  Offices and Clinics of Physicians4.24.83.74.15.14.84.23.93.83.33.84.23.84.43.93.53.5
  Offices and Clinics of Dentists3.23.52.72.33.73.53.73.42.82.62.01.82.02.43.03.53.8
  Nursing Homes2.62.21.30.32.42.11.71.51.41.21.11.00.60.1-0.4-0.7-0.8
  Private Hospitals0.31.11.41.71.11.11.31.21.31.51.51.61.71.91.71.51.3
  Home Health Care Services12.37.34.9-5.58.06.36.36.85.94.72.4-1.4-5.1-7.5-8.1-6.7-3.3
Average Weekly Hours
Non-Farm Private Sector-0.6-0.10.6-0.10.20.10.41.30.50.30.40.3-0.3-0.3-0.3-0.80.0
 Health Services-0.2-0.31.10.2-0.3-0.10.21.11.20.91.11.0-0.10.1-0.3-1.1-0.5
  Offices and Clinics of Physicians0.21.31.0-0.71.21.41.71.81.20.60.20.2-0.8-1.1-1.2-1.7-0.2
  Offices and Clinics of Dentists-0.60.61.0-0.60.71.60.82.01.40.00.6-0.1-1.40.2-0.9-1.9-1.3
  Nursing Homes0.5-0.30.10.50.2-0.2-0.90.2-0.2-0.10.60.40.30.80.3-0.70.0
  Private Hospitals-0.3-0.51.40.3-0.9-0.50.10.71.51.71.81.60.4-0.1-0.6-0.9-0.8
  Home Health Care Services1.2-1.83.10.4-3.2-1.20.73.23.82.52.82.00.30.1-0.8-1.40.2
Average Hourly Earnings
Non-Farm Private Sector2.83.43.94.13.43.43.74.03.83.84.14.14.24.23.83.63.7
 Health Services2.93.23.23.53.43.33.13.03.13.23.53.43.63.63.33.63.4
  Offices and Clinics of Physicians2.35.04.73.85.15.65.55.14.54.64.44.24.33.43.33.03.5
  Offices and Clinics of Dentists3.63.95.83.93.44.04.56.16.45.55.23.83.74.13.93.94.3
  Nursing Homes3.22.73.74.52.42.72.92.83.44.24.54.64.94.54.13.93.6
  Private Hospitals3.42.82.32.93.32.72.02.02.12.22.72.52.83.22.93.53.3
  Home Health Care Services2.32.51.41.32.62.72.32.31.41.01.10.41.11.72.03.64.4
Hospital Employment in Thousands
Total-0.10.00.21.10.0-0.2-0.1-0.20.00.40.50.71.01.31.31.31.1
Private0.21.01.31.71.01.01.21.11.21.41.41.51.71.91.81.51.2
Federal-0.2-0.6-3.2-0.60.3-2.6-1.9-4.1-3.7-2.6-2.2-0.50.0-0.6-1.3-1.3-2.0
State-2.9-4.9-4.2-3.3-4.6-5.2-5.4-5.0-4.4-3.7-3.9-4.5-4.1-2.9-1.60.00.1
Local-0.6-3.1-2.50.5-3.0-3.3-3.4-3.4-3.1-2.1-1.3-0.40.30.81.41.72.1

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, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999.

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: 1995-1999

Type of EstablishmentCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Annual Percent ChangePercent Change from the Same Period of Previous Year
Health Services
Payrolls5.55.86.75.26.06.06.16.86.96.56.86.35.15.14.23.54.1
 Employment2.72.82.31.42.92.72.72.52.42.22.11.81.51.41.11.11.2
 Average Weekly Hours-0.2-0.31.10.2-0.3-0.10.21.11.20.91.11.0-0.10.1-0.3-1.1-0.5
 Average Hourly Earnings2.93.23.23.53.43.33.13.03.13.23.53.43.63.63.33.63.4
Offices and Clinics of Physicians
Payrolls6.811.49.67.211.812.311.811.29.88.88.68.87.46.76.04.86.9
 Employment4.24.83.74.15.14.84.23.93.83.33.84.23.84.43.93.53.5
 Average Weekly Hours0.21.31.0-0.71.21.41.71.81.20.60.20.2-0.8-1.1-1.2-1.7-0.2
 Average Hourly Earnings2.35.04.73.85.15.65.55.14.54.64.44.24.33.43.33.03.5
Offices and Clinics of Dentists
Payrolls6.38.29.75.78.09.39.212.010.98.27.85.64.36.96.15.56.9
 Employment3.23.52.72.33.73.53.73.42.82.62.01.82.02.43.03.53.8
 Average Weekly Hours-0.60.61.0-0.60.71.60.82.01.40.00.6-0.1-1.40.2-0.9-1.9-1.3
 Average Hourly Earnings3.63.95.83.93.44.04.56.16.45.55.23.83.74.13.93.94.3
Nursing Homes
Payrolls6.54.65.35.45.24.63.64.64.65.46.36.15.95.44.02.52.8
 Employment2.62.21.30.32.42.11.71.51.41.21.11.00.60.1-0.4-0.7-0.8
 Average Weekly Hours0.5-0.30.10.50.2-0.2-0.90.2-0.2-0.10.60.40.30.80.3-0.70.0
 Average Hourly Earnings3.22.73.74.52.42.72.92.83.44.24.54.64.94.54.13.93.6
Private Hospitals
Payrolls3.33.45.25.03.53.43.53.95.05.56.25.85.05.14.14.13.8
 Employment0.31.11.41.71.11.11.31.21.31.51.51.61.71.91.71.51.3
 Average Weekly Hours-0.3-0.51.40.3-0.9-0.50.10.71.51.71.81.60.4-0.1-0.6-0.9-0.8
 Average Hourly Earnings3.42.82.32.93.32.72.02.02.12.22.72.52.83.22.93.53.3
Home Health Care Services
Payrolls16.28.19.7-4.07.37.99.512.711.68.36.41.0-3.7-5.8-7.0-4.71.2
 Employment12.37.34.9-5.58.06.36.36.85.94.72.4-1.4-5.1-7.5-8.1-6.7-3.3
 Average Weekly Hours1.2-1.83.10.4-3.2-1.20.73.23.82.52.82.00.30.1-0.8-1.40.2
 Average Hourly Earnings2.32.51.41.32.62.72.32.31.41.01.10.41.11.72.03.64.4
Non-Farm Private Sector
Payrolls5.55.87.76.66.16.26.98.57.47.17.77.56.76.55.95.26.0
 Employment3.22.53.02.62.42.62.73.03.02.93.03.02.72.62.32.32.3
 Average Weekly Hours-0.6-0.10.6-0.10.20.10.41.30.50.30.40.3-0.3-0.3-0.3-0.80.0
 Average Hourly Earnings2.83.43.94.13.43.43.74.03.83.84.14.14.24.23.83.63.7

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

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

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999.

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. 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, replacing the previous fixed-weighted method (U.S. Department of Commerce, 1996 and 1999).
Table 7

Selected National Economic Indicators: 1995-1999

Type of EstablishmentCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Gross Domestic Product
Billions of Dollars$7,270$7,662$8,111$8,511$7,629$7,703$7,818$7,955$8,063$8,171$8,255$8,384$8,441$8,538$8,681$8,809$8,882
Billions of 1992 Chain-Weighted Dollars6,7626,9957,2707,5526,9847,0207,0937,1677,2377,3117,3657,4657,4997,5677,6787,7607,794
Implicit Price Deflator (1992 = 100.0)107.5109.5111.6112.7109.2109.7110.2111.0111.4111.8112.1112.3112.6112.8113.1113.5114.0
Personal Income
Personal Income in Billions$6,072$6,426$6,784$7,126$6,390$6,479$6,550$6,667$6,744$6,821$6,905$7,004$7,082$7,161$7,258$7,349$7,442
Disposable Income in Billions5,2775,5355,7956,0285,4975,5775,6305,7115,7685,8225,8795,9375,9896,0526,1336,2056,280
Prices1
Consumer Price Index, All Items152.4156.9160.5163.0156.5157.4158.5159.6160.2160.8161.5161.9162.8163.4164.0164.6166.2
 All Items Less Medical Care148.6152.8156.3158.6152.5153.3154.4155.5156.0156.7157.2157.5158.4159.0159.5160.1161.6
  Energy105.2110.1111.5102.9112.0111.9111.3112.5110.7112.6110.2103.6103.8103.9100.297.9105.8
  Food and Beverages148.9153.7157.7161.1152.8154.3156.2157.0157.1158.0158.9160.1160.5161.3162.5163.8164.1
 Medical Care220.5228.2234.6242.1227.4229.1230.4232.6234.1235.1236.4239.1241.4243.4244.7247.5249.6
Producer Price Index,2 Finished
Consumer Goods125.6129.5130.2128.9129.3130.2131.2130.7129.9130.2130.1128.2128.8129.2129.4129.4131.0
Energy78.183.283.475.184.284.785.184.982.584.281.875.976.175.972.770.977.2
Food129.0133.6134.5134.3132.1134.9136.1134.4134.5134.5134.7133.4133.7135.1135.0134.8134.3
Finished Goods Except Food and Energy141.9144.3145.1147.7144.2144.0145.0145.2145.0144.4145.8146.3147.3147.4149.9151.2151.1
Annual Percent ChangePercent Change from Same Period Period of Previous Year
Gross Domestic Product
Billions of Dollars4.65.45.94.95.85.55.86.15.76.15.65.44.74.55.25.15.2
Billions of 1992 Chain-Weighted Dollars2.33.43.93.93.93.53.94.13.64.13.84.23.63.54.24.03.9
Implicit Price Deflator (1992 = 100.0)2.31.91.91.01.91.81.81.92.01.81.71.21.00.90.91.11.2
Personal Income
Personal Income in Billions5.55.85.65.06.06.35.96.15.55.35.45.15.05.05.14.95.1
Disposable Income in Billions5.14.94.74.05.05.34.95.14.94.44.44.03.84.04.34.54.9
Prices1
Consumer Price Index, All Items2.82.92.31.62.82.93.22.92.32.21.91.51.61.61.51.72.1
 All Items Less Medical Care2.72.92.31.42.82.93.13.02.32.21.81.31.51.51.41.62.0
  Energy0.64.61.3-7.75.24.47.56.8-1.10.6-1.0-8.0-6.3-7.7-9.0-5.41.9
  Food and Beverages2.83.32.62.12.83.64.23.52.82.41.72.02.22.12.32.32.2
 Medical Care4.53.52.83.23.73.43.12.93.02.62.62.83.13.53.53.53.4
Producer Price Index2, Finished
Consumer Goods1.93.10.5-1.02.93.43.82.60.5-0.1-0.8-1.9-0.8-0.7-0.50.91.7
Energy1.46.50.2-9.85.26.611.57.7-2.0-0.6-4.0-10.6-7.8-9.9-11.0-6.61.4
Food1.83.50.7-0.23.24.54.12.51.8-0.3-1.0-0.7-0.60.40.21.10.4
Finished Goods Except Food and Energy2.11.70.51.81.81.60.90.80.60.30.50.81.62.12.93.42.6

Base period = 1982-1984, unless noted.

Formerly called the “Wholesale Price Index.”

NOTES: Q designates quarter of year. Unlike Tables 1-5, quarterly data on gross domestic product, 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, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999; U.S. Department of Labor, Bureau of Labor Statistics.

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 consumer price index (CPI-U) that measures changes in prices faced by 87 percent of the non-institutionalized U.S. population. The more restrictive wage-earner CPI-W gauges prices faced by wage earners and clerical workers. These workers account for approximately 32 percent of the non-institutionalized population (U.S. Department of Labor, 1998b).
Table 8

Index Levels of Medical Prices: United States, 1995-1999

Type of EstablishmentCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Consumer Price Indexes, All Urban Consumers1
Medical Care Services2224.2232.4239.1246.8231.5233.3234.7237.0238.4239.7241.2244.0245.9248.0249.3252.3254.0
 Professional Services201.0208.3215.4222.2207.5209.2210.7213.2215.1216.2217.1219.5221.8223.3224.4226.7228.7
  Physician Services208.8216.4222.9229.5215.8217.1218.3220.8222.8223.7224.2226.6228.8230.8231.7233.7235.5
  Dental Services206.8216.5226.6236.2215.1218.0220.5223.4225.8227.6229.6232.6235.1237.3239.7243.7246.4
 Hospital and Related Services257.8269.5278.4287.5267.7271.0273.1276.3277.2278.8281.3284.6285.7289.0290.8295.7297.0
  Hospital Services (12/1996 = 100)——101.7105.0———101.0101.3101.8102.7103.9104.3105.5106.2108.0108.4
   Inpatient Hospital Services (12/1996 =100)——101.3104.0———100.8101.0101.5102.1103.1103.3104.4105.0106.7107.0
   Outpatient Hospital Services (12/1986 =100)204.6215.1224.9233.2213.9216.5218.1222.6223.7225.4227.7230.0231.6234.4236.7241.1243.2
 Nursing Home Services (12/1996 =100)——102.3107.1———101.0101.8102.9103.5105.5106.7107.8108.2110.0111.0
Medical Care Commodities204.5210.4215.3221.8209.9211.1212.1213.8215.6215.6216.1218.2221.3223.1224.8226.8229.7
 Prescription Drugs235.0242.9249.3258.6242.3243.7245.3247.6249.8249.6250.1253.3257.6260.6263.0267.2272.0
 Non-Prescription Drugs and Medical Supplies (1986 =100)140.5143.1145.4147.7142.9143.6143.6144.5145.4145.8146.1146.5147.7148.0148.6147.8148.2
  Internal and Respiratory Over-the-Counter Drugs167.0170.2173.1175.4169.5170.6171.3172.4173.3173.3173.4173.2175.6176.4176.4174.8175.9
  Non-Prescription Medical Equipment and Supplies166.3169.1171.5174.9169.3169.8168.8169.7171.2172.2173.1175.1174.5173.9176.0176.5175.6
Producer Price Indexes3
Industry Groupings4
 Health Services (12/1994 = 100)102.4104.6106.1107.7104.4104.7105.2105.8105.9106.2106.3107.1107.5107.9108.3109.2109.4
  Offices and Clinics of Doctors of Medicine (12/1993 =100)106.8107.6109.0111.3107.5107.5107.9108.7108.8109.3109.2110.7111.2111.5112.0113.2113.5
   Medicare Treatments (12/1993 =100)109.6105.5105.8110.5105.5105.5105.5105.8105.8105.8105.8110.5110.5110.5110.5113.2113.2
   Non-Medicare Treatments (12/1993 =100)105.9107.8109.6111.4107.7107.8108.2109.2109.4109.9109.8110.6111.2111.6112.2113.1113.5
  Hospitals (12/1992 = 100)110.0112.6113.6114.4112.3112.7113.4113.5113.6113.5113.5114.0114.2114.4115.0115.7115.9
   General Medical and Surgical Hospitals (12/1992 =100)109.9112.5113.6114.6112.2112.5113.2113.4113.4113.8113.8114.1114.4114.6115.2115.8116.1
    Inpatient Treatments (12/1992 =100)109.2111.8112.8113.6111.6111.6112.4112.5112.5113.2113.0113.3113.4113.6114.1114.8115.0
     Medicare Patients (12/1992 =100)104.7108.1108.8108.1107.8107.8109.1109.1109.1109.1108.0108.0108.0108.0108.4108.4108.4
     Medicaid Patients (12/1992 =100)109.8112.2110.9110.2112.5111.9112.5110.7110.0111.4111.5110.9110.6109.6109.7109.8110.6
     All Other Patients (12/1992 =100)111.7113.7115.6117.8113.4113.6114.2114.8115.1116.0116.3117.0117.4118.1118.8120.0120.2
    Outpatient Treatments (12/1992 =100)113.3116.2117.4118.6115.8116.6117.0117.4117.5117.1117.5118.0118.4118.6119.3120.0120.4
     Medicare Patients (12/1992 =100)111.2113.1116.1118.8112.5113.4114.4115.3115.9116.7116.4117.4118.3119.0120.6122.2123.1
     Medicaid Patients (12/1992 =100)106.4106.1105.0105.9107.1105.9104.4104.8104.9105.0105.2105.2105.3105.3107.8107.8107.8
     All Other Patients (12/1992 =100)114.2117.7118.8119.8117.1118.1118.6119.0119.0118.4118.9119.3119.7119.9120.2120.7121.0
  Skilled and Intermediate Care Facilities (12/1994 =100)103.6110.0114.7119.6109.5110.7111.6113.3113.9115.5116.1117.7118.6120.6121.4122.5122.8
   Public Payers (12/1994 =100)103.8110.5115.4120.4110.1111.2112.1113.7114.4116.3117.0118.4119.0121.5122.6123.1123.1
   Private Payers (12/1994 =100)103.6109.8114.3119.1109.1110.4111.4113.3113.8114.9115.4117.4118.7120.0120.3122.4123.2
  Medical Laboratories (6/1994 =100)104.0105.3106.1106.4105.2105.3105.3105.8106.1106.2106.2106.3106.5106.4106.4106.2106.3
  Home Health Care Services (12/1996 =100)——103.4106.2———101.6103.4103.7104.7105.7106.4106.3106.6106.0106.5
   Medicare Payers (12/1996 =100)——102.2103.6———101.5101.5102.5103.1103.2103.8103.2104.3102.5103.3
   Non-Medicare Payers (12/1996 =100)——100.3103.0———100.2100.099.9101.2102.6103.1103.2103.0103.1103.2
Commodity Groupings
 Drugs and Pharmaceuticals210.9214.7219.1242.6214.6215.2215.2218.1218.2219.2221.0229.8244.5247.4248.7251.1251.7
  Ethical (Prescription) Preparations257.0265.4273.5322.9265.1266.8267.0271.0272.5273.6276.8295.3328.3332.9335.3337.2336.1
  Proprietary (Over-the-Counter) Preparations186.6185.1184.8184.5184.5183.3184.2186.1183.9184.3184.9184.7184.3184.4184.7185.3186.7
 Medical, Surgical, and Personal Aid Devices141.3143.1143.1143.4143.4142.6142.7142.9143.2143.2143.1143.3143.0143.3144.0144.2144.4
  Personal Aid Equipment133.7139.3140.3143.4139.8140.2140.3140.3140.4139.4141.1142.0143.9143.9143.9146.6147.5
  Medical Instruments and Equipment (6/1982 =100)128.3130.1128.1126.7130.1129.7130.1127.8128.1128.6127.8127.0126.4126.6126.9127.3126.7
  Surgical Appliances and Supplies (6/1983 =100)154.8156.9158.8160.6158.1156.3155.8158.5158.9158.6159.2160.7160.1160.3161.3161.3162.5
  Ophthalmic Goods (12/1983 =100)122.2120.3119.8119.6119.7119.8119.5120.4119.9119.4119.5119.2119.1119.6120.7120.2119.7
  Dental Equipment and Supplies (6/1985 =100)137.5141.0146.6151.2140.7141.0141.7145.9146.5146.8147.0148.8150.8152.1153.0153.7154.8

Unless otherwise noted, base year is 1982-1984 = 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 diagnosis-related groups, 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, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999. U.S. Department of Labor, Bureau of Labor Statistics: Producer Price Indexes. Washington, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999.

Table 9

Percent Change in Medical Prices from Same Period a Year Ago: United States, 1995-1999

Type of EstablishmentCalendar Year1996Q21996Q31996Q41997Q11997Q21997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2
1995199619971998
Annual ChangePercent Change from the Same Period of Previous Year
Consumer Price Indexes, All Urban Consumers1
Medical Care Services25.03.72.93.23.83.53.23.03.02.72.82.93.13.53.43.43.3
 Professional Services4.43.73.43.23.73.53.63.63.73.43.13.03.13.33.33.23.1
  Physician Services4.53.63.03.03.73.33.23.03.33.02.72.62.73.23.33.12.9
  Dental servieces4.94.74.74.24.64.95.15.24.94.44.14.14.14.34.44.84.8
 Hospital and Related Services5.04.53.33.34.74.64.23.83.52.93.03.03.03.63.43.94.0
  Hospital Services (12/1996=100)———————————2.93.03.63.33.93.9
   Inpatient Hospital Services (12/1996=100)———————————2.32.32.92.83.53.6
   Outpatient Hospital Services (12/1986=100)4.95.14.63.75.75.44.45.24.64.14.43.33.54.03.94.85.0
 Nursing Home Services (12/1996=100)———————————4.44.84.84.54.34.0
Medical Care Commodities1.92.92.33.03.13.22.92.62.72.11.92.02.63.54.04.03.8
 Prescription Drugs1.93.32.63.83.63.53.33.13.12.41.92.33.14.45.25.55.6
 Non-Prescription Drugs and Medical Supplies (1986=100)1.81.91.61.62.02.31.71.41.81.51.71.41.61.51.70.90.3
  Internal and Respiratory Over-the-Counter Drugs0.61.91.71.32.11.92.41.82.21.61.30.51.31.81.70.90.2
  Non-Prescription Medical Equipment and Supplies3.91.71.42.01.82.80.60.61.11.42.53.22.01.01.70.80.6
Producer Price Indexes3
Industry Groupings4
Health Services (12/1994=100)—2.21.41.52.42.11.81.61.51.51.01.31.41.61.92.11.8
 Offices and Clinics of Doctors of Medicine (12/1993=100)3.90.71.32.10.70.40.81.31.21.61.21.82.12.02.52.32.1
  Medicare Treatments (12/1993=100)4.7-3.70.34.4-3.7-3.7-3.70.30.30.30.34.44.44.44.42.42.4
  Non-Medicare Treatments (12/1993=100)3.61.81.71.61.51.62.01.61.62.01.51.31.61.52.12.42.1
 Hospitals (12/1992=100)3.52.40.80.72.72.51.81.21.20.80.10.40.50.81.31.71.5
  General Medical and Surgical Hospitals (12/1992=100)3.72.41.00.82.82.31.51.11.11.20.60.70.80.71.21.61.5
   Inpatient Treatments (12/1992=100)3.12.30.90.72.82.31.40.80.91.40.50.70.80.41.01.51.4
    Medicare Patients (12/1992=100)2.03.30.6-0.74.14.11.21.21.21.2-1.0-1.0-1.0-1.00.40.40.4
    Medicaid Patients (12/1992=100)2.52.2-1.1-0.72.62.41.7-0.9-2.2-0.5-0.90.20.5-1.6-1.60.10.0
    All Other Patients (12/1992=100)3.71.81.71.92.01.41.41.11.52.21.91.92.01.82.12.52.3
   Outpatient Treatments (12/1992=100)6.22.61.01.02.92.21.91.61.50.50.50.50.81.31.51.81.6
    Medicare Patients (12/1992=100)4.01.72.62.41.31.42.32.73.02.91.81.92.02.03.54.74.1
    Medicaid Patients (12/1992=100)2.9-0.2-1.10.91.20.1-3.4-2.1-2.1-0.80.80.40.30.32.52.52.4
    All Other Patients (12/1992=100)6.93.01.00.83.42.62.41.81.60.30.30.30.61.31.11.31.1
 Skilled and Intermediate Care Facilities (12/1994=100)—6.14.34.36.56.25.74.74.04.34.13.94.14.54.64.23.6
  Public Payers (12/1994=100)—6.54.44.37.26.55.54.74.04.64.44.24.04.54.73.93.4
  Private Payers (12/1994=100)—5.94.14.25.86.06.04.74.24.03.63.64.44.44.34.53.8
 Medical Laboratories (6/1994=100)—1.30.80.31.8-0.60.30.50.90.90.90.40.30.20.20.0-0.2
 Home Health Care Services (12/1996=100)———2.8———————4.02.92.41.80.50.1
  Medicare Payers (12/1996=100)———1.4———————1.62.30.61.1-0.1-0.5
  Non-Medicare Payers (12/1996=100)———2.7———————2.53.13.31.70.40.2
Commodity Groupings
Drugs and Pharmaceuticals2.41.82.110.72.01.90.82.01.71.92.75.412.012.812.58.03.0
 Ethical (Prescription) Preparations2.83.33.118.13.63.62.03.22.82.53.68.920.521.721.211.92.4
 Proprietary (Over-the-Counter) Preparations1.8-0.8-0.1-0.1-1.1-1.8-1.8-1.2-0.30.60.4-0.70.20.1-0.10.31.3
Medical, Surgical, and Personal Aid Devices0.71.30.00.21.80.80.4-0.4-0.20.40.30.3-0.10.00.60.61.0
 Personal Aid Equipment2.74.20.72.26.13.82.62.60.4-0.60.61.22.53.22.03.12.5
 Medical Instruments and Equipment (6/1982=100)1.31.4-1.5-1.11.60.81.1-1.9-1.5-0.9-1.7-0.7-1.4-1.5-0.70.00.3
 Surgical Appliances and Supplies (6/1983=100)-0.61.41.21.12.61.1-0.30.70.51.52.21.40.71.11.30.61.5
 Ophthalmic Goods (12/1983=100)2.2-1.6-0.4-0.1-1.8-2.5-2.5-1.50.1-0.30.0-1.0-0.70.21.01.00.6
 Dental Equipment and Supplies (6/1985=100)1.72.53.93.22.02.82.23.64.14.13.82.03.03.64.04.02.6

Unless otherwise noted, base year is 1982-1984 = 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 diagnosis-related groups, etc., are available from the Bureau of Labor Statistics.

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

SOURCES: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for January 1995-August 1999; U.S. Department of Labor, Bureau of Labor Statistics: Producer Price Indexes. Washington, DC. U.S. Government Printing Office. Monthly reports for January 1995-August 1999.

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 1982-1984 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 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 transaction price changes affecting the entire health care industry more accurately than does the overall CPI medical care index (Cowan et al., 1999).

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. The index is designed to measure transaction prices, and is different from the CPI, which in some cases measures list or full-charge prices. The PPI is a fixed-weight or Laspeyres index, with base-period weights determined by values of receipts. The base period varies among series. The PPI consists of indexes in several major classification structures, including the industry and commodity classifications that are included in articles in the Health Care Indicators series in this journal. 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 did 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, private third-party payer, and other 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 diagnosis-related groups (DRGs) 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 physician offices and clinics. 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 physician offices are computed from a combination of a geographic area sample of payments under t he HCFA Common Procedure Coding System, updates to this system from the November 2, 1998, Federal Register (1998a), and other adjustments. Because of different methodologies, these two Medicare PPIs are not comparable to 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 home health agency (HHA) input price indexes, often referred to as market baskets, were developed to price a consistent set of goods and services over time. Also in the early 1980s, the original Medicare Hospital Input Price Index was revised for use in updating payment rates for 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. The proxy's purpose is to measure the rate of price increases of the goods or services in that category. The price proxy index for each spending category is multiplied by the expenditure weight for the category. The sum of these products (weights multiplied by the price index) over all cost categories yields the composite input price index for any given time period, usually a fiscal year or a calendar year. The percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider. The input price indexes are estimated on a historical basis and forecast out several years. The HCFA-chosen price proxies are forecast under contract with Standard and Poor's/DRI. Following every calendar year quarter, 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, 11, and 12 are forecast 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 hospital, HHA, and SNF payment updates. A description of the current structure of the PPS Input Price Index is in the August 29, 1997, Federal Register (1997), and the most recent PPS hospital update for payment rates was published in the July 30, 1999, Federal Register (1999). The latest description of the HHA regulatory input price index was published in the August 11, 1998, Federal Register (1998b). The latest description of the SNF input price index was published in the May 12, 1998, Federal Register (1998c).
Table 10

Quarterly Index Levels and Four-Quarter Moving Average Percent Change in the HCFA Prospective Payment System (PPS) Hospital Input Price Index, by Expense Category: United States, 1997-2001

Expense Category1Price/Wage VariableBase Year Weights FY 199221997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2Forecats
1999Q31999Q42000Q12000Q22000Q32000Q42001Q12001Q2
Index Levels
Total—100.000115.1115.9116.7117.9118.9119.3119.7120.6121.6122.4123.3124.1125.0125.8126.7127.6
 Compensation—61.390117.1118.1119.0119.9121.2121.8122.7123.7124.8125.7126.8127.6128.8129.8130.9131.7
  Wages and SalariesHCFA Occupational Wage Index450.244116.9117.9118.9119.8121.1121.8122.8123.7124.8125.7126.8127.7128.9129.9130.8131.7
  Employee BenefitsHCFA Occupational Benefits Index411.146118.1119.0119.6120.6121.4122.1122.5123.6124.7125.6126.9127.5128.5129.8130.9131.6
 Other Professional FeesECI-W/S:Professional/Technical (Private)2.127117.9118.9119.8120.9122.2123.0123.3124.3125.6126.5127.7128.6129.9130.9132.0133.0
 Energy and Utilities3—1.542113.6111.3109.0109.8113.4109.6108.2108.6113.9110.8111.4112.7116.2112.4112.5114.1
 Professional Liability InsuranceHCFA-Professional Liability Premium1.18995.996.096.196.296.496.897.297.698.198.799.4100.0100.5101.1101.6102.2
 All Other—33.752112.1112.5113.4115.1115.5115.6115.3116.0116.6117.5118.2118.6119.0119.6120.4121.2
  Other Products3—24.825110.8111.0112.0114.0114.2114.1113.4114.0114.4115.2115.8116.1116.2116.7117.3118.1
   PharmaceuticalsPPI-Prescription Drugs4.162119.7121.1129.2143.7145.7146.8144.6147.1147.7148.8150.5151.6151.4152.7154.4156.1
   Food: Direct PurchasePPI-Processed Foods2.314109.9109.4107.7107.6108.4107.9107.6106.6107.2107.2107.7108.3108.6108.8109.1109.7
   Food: Contract ServiceCPI-Food Away From Home1.072112.3113.2113.8114.5115.3116.0116.9117.4118.1119.1120.1121.2122.2123.3124.2125.1
   ChemicalsPPI-Industrial Chemicals3.666115.9115.7114.0111.7110.3109.2107.5107.6107.9109.4109.2108.6108.2108.3108.6110.0
   Medical InstrumentsPPI-Medical Instruments/Equipment3.080104.9104.2103.6103.1103.3103.5103.5103.4102.6102.4102.6102.5102.6102.9103.5103.6
   Rubber and PlasticsPPI-Rubber/Plastic Products4.750107.4107.3107.2106.9106.6106.5106.1106.5106.8107.4107.9108.2108.3108.4108.6108.7
   Paper ProductsPPI-Converted Paper and Paperboard2.078109.3111.6113.6113.3113.3112.1111.4113.1114.8116.8117.6118.2119.1120.2121.3121.8
   Miscellaneous ProductsPPI-Finished Goods2.236107.2107.3106.1106.4106.6106.9106.8107.8108.7109.2109.5109.8109.9110.4110.8111.2
  Other Services3—8.927115.8116.6117.5118.1119.1119.6120.8121.6122.8123.9124.8125.7127.0127.9128.9130.1
   All Other: Labor IntensiveECI-Comp:Service Workers7.277116.9117.8118.8119.4120.6121.2122.5123.5124.8126.0127.1128.0129.4130.5131.4132.8
Four-Quarter Moving-Average Percent Change
Total—100.0002.02.12.32.62.93.03.02.82.52.42.62.72.82.92.82.8
 Compensation—61.3902.62.72.93.13.33.33.33.23.13.13.23.23.23.33.23.2
  Wages and SalariesHCFA Occupational Wage Index450.2442.83.03.23.43.53.53.43.43.23.23.23.23.23.33.23.2
  Employee BenefitsHCFA Occupational Benefits Index411.1461.51.61.72.02.42.52.62.62.62.62.93.13.23.33.23.2
 Other Professional FeesECI-W/S:Professional/Technical (Private)2.1272.62.62.83.03.23.33.33.23.02.93.03.23.33.53.43.4
 Energy and Utilities3—1.5422.32.00.70.60.3-0.7-0.5-0.9-0.7-0.10.82.12.52.52.01.4
 Professional Liability InsuranceHCFA-Professional Liability Premium1.189-1.5-1.8-1.5-1.0-0.40.20.61.01.31.61.92.12.32.42.42.4
 All Other—33.7521.11.01.21.82.32.72.72.11.61.31.51.82.12.12.02.0
  Other Products3—24.8250.30.20.31.11.92.52.61.81.10.60.81.31.61.71.51.5
   PharmaceuticalsPPI-Prescription Drugs4.1622.63.14.59.013.718.118.713.78.64.02.32.52.83.12.72.7
   Food:Direct PurchasePPI-Processed Foods2.3141.80.5-0.6-1.6-1.7-1.8-1.4-0.9-0.8-0.7-0.60.00.61.11.41.4
   Food:Contract ServiceCPI-Food Away From Home1.0722.92.82.72.62.62.62.62.62.62.62.62.83.03.23.43.4
   ChemicalsPPI-Industrial Chemicals3.6660.3-0.2-1.3-1.7-2.8-4.0-4.8-5.0-4.3-2.9-1.10.10.80.4-0.10.0
   Medical InstrumentsPPI-Medical Instruments/Equipment3.080-0.8-1.5-1.2-1.2-1.3-1.1-0.9-0.5-0.3-0.4-0.6-0.9-0.7-0.30.10.6
   Rubber and PlasticsPPI-Rubber/Plastic Products4.750-0.6-0.5-0.3-0.4-0.4-0.5-0.8-0.7-0.5-0.10.61.11.41.51.20.9
   Paper ProductsPPI-Converted Paper and Paperboard2.078-4.9-3.3-1.30.82.32.51.40.4-0.10.82.73.94.54.23.63.2
   Miscellaneous ProductsPPI-Finished Goods2.2361.30.4-0.5-0.8-0.9-0.9-0.30.20.91.62.02.11.91.61.31.2
  Other Services3—8.9273.23.43.63.63.33.12.92.82.93.13.33.43.43.33.33.3
   All Other: Labor IntensiveECI-Comp:Service Workers7.2773.53.84.14.23.83.53.33.13.23.53.63.73.83.73.63.6

For data sources used to estimate the input price index relative weights and choice of price proxies, refer to the August 29, 1997, Federal Register. For the most recent PPS update for payment rates, refer to the July 30, 1999, Federal Register.

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

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).

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 (0.369), Electricity (0.927), and Water and Sewage (0.246). Other Products: Photographic Supplies (0.391), Apparel (0.869), and Machinery and Equipment (0.207). Other Services: Telephone (0.581), Postage (0.272), and Other Non-Labor Intensive (0.796).

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding two or more categories. HCFA is Health Care Financing Administration. FY is fiscal year. Q designates quarter of year. ECI is Employment Cost Index. W/S is Wages and Salaries. PPI is Producer Price Index. CPI is Consumer Price Index. Comp is Compensation. The four-quarter moving-average percent change for the quarter indicated by the column heading is the rate of change in the average index level for four quarters ending in that quarter over the same period of the previous year. The four-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 four quarters and dividing by 4. The process is repeated to compute the four-quarter moving-average index level for the same quarter a year ago. The average index level for the quarter indicated by the column heading is divided by the average index level of the same quarter a year ago, and the quotient is subtracted from 1 and multiplied by 100 to determine the four-quarter moving-average percent change in the index.

SOURCES: Health Care Financing Administration, Office of the Actuary:Data from the National Health Statistics Group. Third-quarter 1999 forecasts were produced under contract to HCFA by Standard & Poor's/DRI.

Table 11

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the HCFA Skilled Nursing Facility Input Price Index, by Expense Category: United States, 1997-2001

Expense Category1Price/Wage VariableBase Year Weights CY 199221997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2Forecast
1999Q31999Q42000Q12000Q22000Q32000Q42001Q12001Q2
Index Levels
Total—100.000116.8117.5118.4119.6120.5120.9121.9123.0124.0124.6125.7126.7127.5128.3129.3130.4
 Compensation—67.059118.9119.8120.9121.9122.8123.5125.1126.2127.3128.0129.3130.5131.2132.4133.6134.7
  Wages and SalariesECI-W/S:Nursing Homes (Private)54.262119.6120.5122.1123.1124.3124.8126.6127.7129.0129.6131.1132.3133.1134.1135.6136.7
  Employee BenefitsECI-Benefits: Nursing Homes (Private)12.797115.9116.8115.9116.8116.6117.7118.8119.9120.2121.2121.8123.0123.4124.9125.1126.1
 Non-Medical Professional FeesECI-Comp:Professional and Technical Workers (Private)1.916117.9118.9119.8120.9122.2123.0123.3124.3125.6126.5127.7128.6129.9130.9132.0133.0
 Utilities3—2.500114.7110.8109.1110.6114.7110.1108.7109.7115.1111.2111.6113.4117.7113.5113.6115.7
 Other Expenses—18.747112.1112.5113.3114.8115.4115.6115.6116.3117.0117.6118.2118.8119.3119.9120.4121.2
  Other Products3—10.964111.9112.3113.7116.9117.5117.5116.8117.6118.3119.0119.8120.4120.6121.2121.9122.8
  Other Services3—7.783115.7116.3117.0117.6118.3118.8119.6120.6121.8122.7123.7124.5125.7126.6127.5128.6
 Capital-Related Expenses—9.777109.6109.7109.8110.3110.8110.8111.0111.5111.9112.0112.1112.6112.9113.0113.2113.6
  Depreciation3—5.915116.6117.1117.9118.3119.3119.7120.5120.9121.7122.1122.9123.3124.0124.5125.2125.5
  Interest3—3.18995.694.793.494.093.492.591.392.191.590.789.490.289.588.887.688.3
  Other Capital-Related ExpensesCPI(U)-Residential Rent0.674114.6115.5116.3117.2118.3119.4120.3121.0122.0123.4124.4125.4126.5127.6128.2129.0
Four-Quarter Moving-Average Percent Change
Total—100.0002.42.42.42.62.82.93.02.92.93.03.03.03.03.02.92.9
 Compensation—67.0592.72.72.72.93.03.13.23.33.43.63.63.53.43.33.33.3
  Wages and SalariesECI-W/S:Nursing Homes (Private)54.2623.13.13.23.43.53.63.73.73.73.83.83.73.53.43.43.4
  Employee BenefitsECI-Benefits: Nursing Homes (Private)12.7971.31.00.80.80.80.71.21.62.22.82.82.82.72.72.82.7
 Non-Medical Professional FeesECI-Comp:Professional and Technical Workers (Private)1.9162.62.62.83.03.23.33.33.23.02.93.03.23.33.53.43.4
 Utilities3—2.5001.61.50.70.70.5-0.2-0.1-0.5-0.40.00.81.82.42.62.42.0
 Other Expenses—18.7471.71.61.51.92.22.62.62.21.91.61.71.92.02.12.01.9
  Other Products3—10.9640.90.70.81.83.04.04.23.22.11.31.31.72.02.22.01.9
  Other Services3—7.7833.03.02.92.82.62.52.42.32.52.83.03.23.33.23.23.2
 Capital-Related Expenses—9.7771.41.31.21.21.11.11.11.11.11.01.01.01.01.01.00.9
  Depreciation3—5.9152.62.52.52.42.42.32.32.22.22.12.12.02.01.91.91.9
  Interest3—3.189-1.5-1.7-1.9-2.1-2.2-2.3-2.2-2.2-2.1-2.1-2.0-2.1-2.1-2.1-2.1-2.1
  Other Capital-Related ExpensesCPI(U)-Residential Rent0.6742.82.93.03.13.23.23.33.33.33.33.33.43.53.53.43.3

For data sources used to estimate the input price index relative weights and choice of price proxies, refer to the May 12, 1998, Federal Register.

Category weights may not sum to totals shown because of rounding.

Represents a subtotal. Detailed categories not shown are listed below by subtotal, detailed category, and base-year weight: Utilities: Electricity (1.626), Fuels non-highway (0.332), and Water and Sewage (0.542). Other Products: Pharmaceuticals (2.531), Food (3.353), Chemicals (0.720), Rubber and Plastics (1.529), Paper Products (1.005), and Miscellaneous Products (1.826). Other Services: Telephone Services (0.385), Labor-Intensive Services (3.686), and Non-Labor Intensive Services (3.713). Depreciation: Building and Fixed Equipment (4.118) and Movable Equipment (1.797). Interest: Government and Non-Profit SNFs (1.658) and For-Profit SNFs (1.531).

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding two or more categories. HCFA is Health Care Financing Administration. CY is calendar year. Q is quarter of year. ECI is Employment Cost Index. W/S is Wages and Salaries. Ben is Benefits. Comp is Compensation. CPI(U) is Consumer Price Index for all urban consumers. SNF is skilled nursing facility. 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 National Health Statistics Group. Third quarter 1999 forecasts were produced under contract to HCFA by Standard & Poor's/DRI.

Table 12

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change of the Home Health Agency (HHA) Input Price Index, by Expense Category: United States, 1997-2001

Expense Category1Price/Wage VariableBase Year Weights FY 199341997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2Forecast
1999Q31999Q42000Q12000Q22000Q32000Q42001Q12001Q2
Index Levels
Total—100.000113.1113.9114.6115.4116.4117.0117.9118.8119.9120.8121.8122.6123.8124.7125.7126.6
 Compensation2—77.668113.2114.2115.1115.9117.1117.8118.7119.7120.8121.7122.8123.7124.9125.9126.8127.8
  Wages and Salaries2HHA Occupational Wage Index564.226113.6114.6115.5116.4117.6118.3119.4120.3121.5122.4123.5124.3125.6126.6127.5128.5
  Employee Benefits2HHA Occupational Benefits Index513.442111.5112.3112.9113.7114.5114.9115.5116.5117.5118.5119.7120.4121.2122.4123.5124.2
 Operations and MaintenanceCPI(U)-Fuel and Other Utilities0.832109.4108.4106.0106.8108.4105.2104.6105.8108.7108.3108.7109.6111.0110.2110.4111.5
 Administrative and General3—9.569114.1114.5115.2116.0116.8117.0117.9118.5119.4119.9120.9121.8122.6123.2124.5125.3
  TelephoneCPI(U)-Telephone Services0.725105.7105.6105.8106.7106.6106.4106.1105.4105.3105.4105.9106.0105.9106.1106.3106.5
  Paper and PrintingCPI(U)-Household Paper Products0.529114.2114.6115.6116.6116.7117.3117.4117.7117.4117.5118.3118.9119.1119.2119.2119.2
  PostageCPI(U)-Postage0.724110.3110.3110.3110.3110.3110.3113.6113.6113.6113.6113.6113.6113.6113.6117.7117.7
  Other Administrative Costs3CPI(U)-Services7.591115.3115.7116.6117.4118.4118.7119.5120.3121.5122.1123.2124.2125.3126.0127.2128.2
 TransportationCPI(U)-Private Transportation3.405110.8110.7109.1108.8108.3108.5107.4110.3111.8113.0112.7113.4113.4114.6115.0116.5
 Capital-Related—3.204111.0111.5112.0112.3112.8113.4113.8114.3115.1115.8116.5117.3118.2118.9119.7120.5
  InsuranceCPI(U)-Household Insurance0.560114.3114.8115.1114.5114.0114.6114.8116.0117.5118.2119.1119.9121.0121.4122.0122.6
  Fixed CapitalCPI(U)-Owner's Equivalent Rent1.764114.6115.6116.4117.3118.4119.4120.1120.7121.7122.7123.8125.0126.2127.4128.5129.7
  Movable CapitalPPI-Machinery and Equipment0.880101.6101.3101.2100.9100.7100.6100.7100.5100.4100.2100.4100.3100.3100.4100.7100.7
 Other Expenses3CPI(U)-All Items less Food and Energy5.322112.4113.1113.9114.6115.1115.7116.4117.0117.8118.8119.8120.7121.7122.7123.9124.8
Four-Quarter Moving-Average Percent Change
Total—100.0002.82.92.93.03.02.92.92.92.93.03.13.23.33.23.23.2
 Compensation2—77.6682.93.13.33.43.53.43.33.23.23.23.33.33.43.43.33.3
  Wages and Salaries2HHA Occupational Wage Index564.2263.13.33.53.63.73.63.53.43.33.43.43.43.43.43.43.4
  Employee Benefits2HHA Occupational Benefits Index513.4421.72.02.22.42.62.62.52.42.42.63.03.23.33.33.23.2
 Operations and MaintenanceCPI(U)-Fuel and Other Utilities0.8323.32.50.90.0-0.7-1.8-1.6-1.6-1.20.21.52.73.12.82.31.8
 Administrative and General3—9.5692.72.62.42.32.32.32.32.32.22.32.42.52.62.72.82.8
  TelephoneCPI(U)-Telephone Services0.7251.91.50.90.40.40.50.60.2-0.4-0.8-0.9-0.50.00.40.60.5
  Paper and PrintingCPI(U)-Household Paper Products0.5290.60.50.71.21.51.92.01.71.40.80.60.60.81.21.21.0
  PostageCPI(U)-Postage0.7240.00.00.00.00.00.00.71.52.23.02.21.50.70.00.91.8
  Other Administrative Costs5CPI(U)-Services7.5913.13.02.92.82.82.72.62.62.52.62.83.03.13.23.23.2
 TransportationCPI(U)-Private Transportation3.4051.70.7-0.6-1.1-1.8-2.2-2.0-1.10.31.83.43.83.32.61.91.9
 Capital-Related—3.2042.02.02.02.01.91.81.71.71.81.92.12.32.42.62.72.7
  InsuranceCPI(U)-Household Insurance0.5603.02.62.62.11.40.90.10.21.01.82.83.33.33.22.92.6
  Fixed CapitalCPI(U)-Owner's Equivalent Rent1.7642.92.93.03.13.23.23.23.13.02.92.93.13.33.53.73.8
  Movable CapitalPPI-Machinery and Equipment0.880-0.5-0.5-0.5-0.7-0.7-0.8-0.7-0.6-0.5-0.4-0.4-0.3-0.3-0.10.00.2
 Other Expenses3CPI(U)-All Items less Food and Energy5.3222.52.42.32.22.32.32.32.32.32.32.52.83.03.23.33.4

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

Category weights may not sum to total because of rounding.

Includes allocated Contract Services' Labor.

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

Includes allocated Contract Services' Non-Labor.

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding two or more categories. HCFA is Health Care Financing Administration. FY is fiscal year. Q is quarter of year. CPI(U) is Consumer Price Index for all urban consumers. PPI is Producer Price Index. An example of how a percent change is calculated is shown in the Notes for Table 10.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the National Health Statistics Group. Third quarter 1999 forecasts were produced under contract to HCFA by Standard & Poor's/DRI.

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 four-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.

Medicare Economic Index

In 1972, Congress mandated the development of the Medicare Economic Index (MEI) to measure the changes in costs of physicians' time and operating expenses. The input price change measured by the MEI is considered in connection with the update factor for the Medicare Part B physician fee schedule under the resource-based relative value scale (Federal Register, 1996) 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 (1996 for the MEI), cost categories are identified, and the 1996 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 both economy wide productivity and physician-practice productivity are not both included in the update, resulting in a double counting of productivity. Standard & Poor's/DRI produces four main forecasts of the MEI for HCFA: (1) a Presidential budget forecast in December; (2) the mid-session review in June, based on assumptions for the Federal budget exercises; (3) the Medicare Trustees Report forecast in February, based on assumptions by the Medicare Trustees, and (4) the Medicare Premium Promulgation f o recast in August, based on baseline assumptions by Standard & Poor's/DRI. Standard & Poor's/DRI also produces forecasts of the MEI using their own economic assumptions forecast. The forecasts based on Standard & Poor's/DRI assumptions are presented in the Health C are Indicators series. Much of the forecast 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 2, 1998, Federal Register (1998a) The MEI data are presented in Table 13 as index levels and four - quarter moving -average percent changes.
Table 13

Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the HCFA Medicare Economic Index (MEI) with DRI Forecast Assumptions, by Expense Category: United States, 1997-2001

Expense Category1Price/Wage VariableBase Year Weights CY 199621997Q31997Q41998Q11998Q21998Q31998Q41999Q11999Q2Forecast
1999Q31999Q42000Q12000Q22000Q32000Q42001Q12001Q2
Index Levels
Total—100.000102.3103.3104.1104.6105.1105.8106.4106.8107.3108.1108.7109.2109.7110.4111.0111.4
 Physician Earnings—54.460102.4103.9104.6104.8105.2106.2106.8107.0107.4108.4109.0109.2109.5110.4110.9111.1
  Wages and SalariesAHE-Private344.197102.7104.4105.3105.4105.7107.0107.8107.8108.2109.4109.9110.2110.4111.4111.9112.0
  BenefitsECI-Benefits, Private310.263101.1101.6101.8102.3102.6102.8102.8103.4103.9104.2105.0105.3105.8106.1106.9107.2
 Practice Expenses—45.540102.2102.7103.4104.3105.0105.4105.9106.6107.2107.7108.5109.1109.8110.3111.2111.8
  Non-Physician Compensation—16.812102.4103.1103.8104.3105.1105.3105.8106.5107.1107.5108.1108.6109.2109.6110.2110.6
   Wages and Salaries—12.424102.8103.5104.3104.9105.8106.0106.6107.3107.9108.3108.9109.4110.1110.5111.1111.5
    Professional/TechnicalECI-W/S: Professional/Technical 35.662102.5103.0103.6104.2105.1105.5105.9106.6107.2107.6108.1108.6109.4109.7110.1110.5
    ManagersECI-W/S:Administrative/Managerial32.410103.4104.8106.1106.5107.8107.2107.9108.8109.3109.8110.6111.2111.9112.6113.3113.8
    ClericalECI-W/S:Clerical33.830102.8103.3104.0104.8105.4105.8106.6107.3107.9108.2108.9109.4109.9110.3111.0111.3
    ServicesECI-W/S:Service Occupations30.522103.8104.5105.0105.4106.2106.5107.3108.1108.9109.7110.1110.6111.4112.0112.4112.8
   Employee BenefitsECI-Benefits, Private White Collar34.388101.1101.9102.5102.8103.2103.5103.5104.1104.7105.1105.9106.2106.7107.0107.8108.1
  Office ExpensesCPI(U)-Housing11.581103.2103.2103.9104.7105.6105.6106.2106.9108.0108.3109.4110.2111.4111.7112.7113.6
  Medical Materials/SuppliesPPI-Drugs/PPI-Surgical/CPI-Medical Supplies4.516102.0102.7105.7109.6110.1111.1110.6111.4111.4112.3113.1113.7113.9114.6115.7116.6
  Professional Liability InsuranceHCFA-Professional Liability Premiums3.152100.9100.9100.9100.9102.3103.6106.7106.7107.3108.0108.7109.4110.1110.7111.4112.1
  Medical EquipmentPPI-Medical Instruments/Equipment1.87898.998.397.797.297.497.697.697.496.896.596.896.996.897.097.697.7
  Other Professional Expenses—7.601102.1102.7103.0103.5103.8104.3104.6105.6106.2107.0107.9108.7109.5110.5111.4112.3
   AutomobileCPI(U)-Private Transportation1.300100.4100.398.898.698.298.397.4100.0100.9101.8102.0103.0103.1104.2104.5105.8
   All OtherCPI(U)-All Items less Food/Energy6.301102.5103.1103.9104.5105.0105.6106.1106.7107.2108.1109.1109.9110.8111.8112.8113.7
Four-Quarter Moving-Average Percent Change
Total—100.0002.22.32.32.42.62.62.52.42.22.12.12.22.22.22.22.1
 Physician Earnings—54.4602.52.52.52.62.72.62.52.32.22.12.12.12.02.01.91.8
  Wages and SalariesAHE-Private344.1972.82.92.93.03.02.92.72.52.42.32.22.22.12.02.01.8
  BenefitsECI-Benefits, Private310.2631.01.11.11.21.31.31.31.21.11.21.41.71.81.91.81.8
 Practice Expenses—45.5402.02.02.02.22.42.52.62.52.32.22.22.32.42.42.52.5
  Non-Physician Compensation—16.8122.02.12.32.42.62.52.32.22.02.02.12.02.12.12.01.9
   Wages and Salaries—12.4242.32.42.62.72.92.72.62.52.22.22.22.12.12.12.02.0
    Professional/TechnicalECI-W/S:Professional/Technical 35.6621.92.02.32.52.62.52.42.42.32.22.12.02.02.01.91.9
    ManagersECI-W/S:Administrative/Managerial32.4103.03.23.43.64.03.63.02.61.91.92.12.12.42.42.42.5
    ClericalECI-W/S:Clerical33.8302.32.42.52.52.62.62.62.52.42.42.32.22.01.91.91.9
    ServicesECI-W/S:Service Occupations30.5222.93.03.23.32.92.62.42.32.32.62.72.62.62.42.22.1
   Employee BenefitsECI-Benefits, Private White Collar34.3881.11.21.31.41.81.81.61.51.31.31.71.81.92.01.91.8
  Office ExpensesCPI(U)-Housing11.5812.72.62.42.32.32.32.32.32.22.32.52.72.93.13.13.1
  Medical Materials/SuppliesPPI-Drugs/PPI-Surgical/CPI-Medical Supplies4.5161.41.92.74.25.87.17.15.53.82.11.51.71.92.22.22.3
  Professional Liability InsuranceHCFA-Professional Liability Premiums3.1520.60.60.70.70.91.32.53.94.85.24.23.42.82.42.52.5
  Medical EquipmentPPI-Medical Instruments/Equipment1.878-0.8-1.5-1.2-1.2-1.3-1.1-0.9-0.5-0.3-0.4-0.6-0.8-0.6-0.20.20.5
  Other Professional Expenses—7.6012.32.11.81.71.61.51.61.71.92.12.52.73.03.13.23.2
   AutomobileCPI(U)-Private Transportation1.3001.70.7-0.6-1.1-1.8-2.2-2.0-1.10.11.53.13.53.43.12.52.4
  All OtherCPI(U)-All Items less Food/Energy6.3012.52.42.32.22.32.32.32.32.22.22.42.62.93.13.33.4

For data sources used to estimate the index relative weights and choice of price proxies, refer to the November 2, 1998, 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 Medicare Economic Index are adjusted for productivity so both economywide 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 two or more categories. HCFA is Health Care Financing Administration. CY is calendar year. Q is quarter of year. AHE is Average Hourly Earnings. ECI Employment Cost Index. W/S is Wages and Salaries. CPI(U) is Consumer Price Index for all urban consumers. PPI represents Producer Price Index. 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 National Health Statistics Group. Third-quarter 1999 forecasts were produced under contract to HCFA by Standard & Poor's DRI.

Data Inquiries

For inquiries concerning market basket data, contact Stephen K. Heffler at (410) 786-1211 or Mary Lee Seifert at (410) 786-0030. For all other inquiries, contact Carolyn S. Donham at (410) 786-7947.
  6 in total

1.  Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 2000 rates. Department of Health and Human Services (HHS), Health Care Financing Administration (HCFA). Final rule.

Authors: 
Journal:  Fed Regist       Date:  1999-07-30

2.  Medicare program; revisions to payment policies and adjustments to the relative value units under the physician fee schedule for calendar year 1999--HCFA. Final rule with comment period.

Authors: 
Journal:  Fed Regist       Date:  1998-11-02

3.  Medicare program; schedules of per-visit and per-beneficiary limitations on home health agency costs for cost reporting periods beginning on or after October 1, 1998--HCFA. Notice with comment period.

Authors: 
Journal:  Fed Regist       Date:  1998-08-11

4.  Medicare program; physician fee schedule update for calendar year 1997 and physician volume performance standard rates of increase for Federal fiscal year 1997--HCFA. Final notice.

Authors: 
Journal:  Fed Regist       Date:  1996-11-22

5.  Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1998 rates--HCFA. Final rule with comment period.

Authors: 
Journal:  Fed Regist       Date:  1997-08-29

6.  National health expenditures, 1998.

Authors:  C A Cowan; H C Lazenby; A B Martin; P A McDonnell; A L Sensenig; J M Stiller; L S Whittle; K A Kotova; M A Zezza; C S Donham; A M Long; M W Stewart
Journal:  Health Care Financ Rev       Date:  1999
  6 in total

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