Health Care Indicators.

This regular feature of the journal includes a discussion of each of the following four topics community hospital statistics; employment, hours, and earnings in the private health sector; health care prices; and national economic indicators. These statistics are valuable in their own right for understanding the relationship between the health care sector and the overall economy. In addition, they allow us to anticipate the direction and magnitude of health care cost changes prior to the availability of more comprehensive data.

Introduction

This article presents statistics on health care utilization, prices, expenses, employment, and work hours, as well as on national economic activity. Some of these statistics are based on sample surveys conducted monthly or quarterly by government agencies or private organizations and are available 1 to 3 months after the completion of the period. They provide the first glimpse of changes occurring within the general economy and the health care sector.

The accompanying tables report selected quarterly statistics for 1990 through the second quarter of 1993 and the calendar year aggregation of quarterly information in the past 3 years. Additional tables show change from the same period 1 year earlier. For quarterly information, this calculation permits analysis of quarterly data to focus on the direction and magnitude of changes, without interference introduced by seasonal fluctuations.

In the national health accounts, indicators such as these play an important role in the estimation of the latest historical year of health care expenditures. Information that is more comprehensive tends to lag behind the close of a calendar year by 9 to 12 months or more. Therefore, we rely extensively 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 expenditure change.

In the following sections, we will identify important indicators of health care and national economic activity and their sources. We will then describe what these indicators tell us about general economic and health sector activity during the most recent quarter.

Community Hospital Statistics

Since 1963, the American Hospital Association, 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 1991, 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, 1963-93). In Tables 1 and 2, statistics covering expenses, utilization, beds, and personnel depict trends in the operation of community hospitals annually for 1990-92 and for selected quarters for 1990-93. Figure 1 shows changes from the same quarter 1 year earlier in a measure of hospital expense and admissions for 1983 through the second quarter of 1993.

Table 1

Selected Community Hospital Statistics: 1990-93

Item	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
Operating Expenses
Total in Millions	$217,113	$238,633	$260,994	$53,738	$58,930	$64,532	$65,829	$66,894	$68,527	$69,245
Labor in Millions	$117,828	$128,704	$140,112	$29,050	$31,692	$34,501	$35,396	$36,073	$36,782	$37,250
Non-Labor in Millions	$99,286	$109,929	$120,882	$24,688	$27,238	$30,031	$30,434	$30,821	$31,746	$31,994
Inpatient Expense in Millions	165,792	178,401	191,401	40,969	43,979	47,284	47,873	48,733	50,447	50,085
Amount per Patient Day	765	844	927	760	835	922	950	965	948	999
Amount per Admission	5,021	5,461	5,905	4,936	5,375	5,836	5,980	6,133	6,041	6,194
Utilization
Admissions in Thousands	33,017	32,670	32,411	8,300	8,182	8,102	8,005	7,947	8,351	8,086
Inpatient Days in Thousands	216,836	211,475	206,440	53,931	52,681	51,306	50,387	50,509	543,228	50,150
Adult Length of Stay in Days	6.6	6.5	6.4	6.5	6.4	6.3	6.3	6.4	6.4	6.2
Surgical Operations in Thousands	21,904	21,983	22,463	5,581	5,572	5,641	5,630	5,584	5,646	5,721
Outpatient Visits in Thousands	326,498	344,116	366,243	82,609	86,331	91,572	93,271	92,232	94,677	97,637
Beds in Thousands	921	912	908	924	913	910	908	904	905	904
Adult Occupancy Rate1	64.5	63.5	62.1	64.1	63.4	62.0	60.3	60.7	65.3	61.0
Full-Time Equivalent (FTE) Personnel
Total in Thousands	3,229	3,249	3,300	3,226	3,244	3,290	3,310	3,324	3,322	3,331
Number per Bed	3.5	3.6	3.6	3.5	3.6	3.6	3.6	3.7	3.7	3.7
Adjusted Patient Days2 per FTE	88	87	85	22	22	21	21	21	22	21
Adjusted Patient Days in Thousands	283,959	282,874	281,502	70,741	70,590	70,021	69,286	69,332	72,306	69,334

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

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.

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

SOURCE: American Hospital Association: National Panel Survey Reports. Chicago. Monthly reports for January 1990-June 1993.

Table 2

Percent Change in Selected Community Hospital Statistics: 1990-93

Item	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
	Annual Percent Change			Percent Change From the Same Period of Previous Year
Operating expenses
Total	11.1	9.9	9.4	11.5	9.7	9.5	9.3	7.4	7.5	7.3
Labor	11.1	9.2	8.9	11.5	9.1	8.9	8.9	7.6	7.7	8.0
Non-Labor	11.1	10.7	10.0	11.5	10.3	10.3	9.9	7.1	7.3	6.5
Inpatient Expenses	9.0	7.6	7.3	9.4	7.3	7.5	7.4	5.0	6.2	5.9
Amount per Patient Day	10.7	10.3	9.9	10.9	9.9	10.4	9.7	9.7	8.2	8.4
Amount per Admission	9.5	8.8	8.1	8.8	8.9	8.6	8.3	7.8	6.3	6.1
Utilization
Admissions	−0.5	−1.1	−0.8	0.6	−1.4	−1.0	−0.9	−2.6	−0.1	−0.2
Inpatient Days	−1.6	−2.5	−2.4	−1.4	−2.3	−2.6	−2.1	−4.3	−1.9	−2.3
Adult Length of Stay	−1.1	−1.4	−1.6	−1.9	−0.9	−1.6	−1.2	−1.7	−1.8	−2.1
Surgical Operations	2.4	0.4	2.2	2.1	−0.2	1.2	1.7	1.6	0.7	1.4
Outpatient Visits	6.0	5.4	6.4	5.4	4.5	6.1	6.4	5.2	6.2	6.6
Beds	−0.9	−1.0	−0.5	−0.8	−1.3	−0.3	−0.3	−0.5	−0.4	−0.7
Adult Occupancy Rate1	−0.4	−0.9	−1.4	−0.4	−0.7	−1.5	−1.1	−2.4	−0.2	−1.0
Full-Time Equivalent (FTE) Personnel
Total	2.1	0.6	1.6	2.4	0.5	1.4	1.8	2.0	1.4	1.3
Number per Bed	3.1	1.7	2.0	3.2	1.8	1.7	2.1	2.6	1.8	2.0
Adjusted Patient Days per FTE	−1.7	−1.0	−2.0	−1.9	−0.8	−2.2	−2.1	−4.0	−2.0	−2.2
Adjusted Patient Days	0.3	−0.4	−0.5	0.5	−0.2	−0.8	−0.3	−2.1	−0.7	−1.0

Change in rate, rather than percent change.

NOTE: Q designates quarter of year.

SOURCE: American Hospital Association: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1989-June 1993.

Figure 1

Percent Change in Operating Expense and Admissions from the Same Period of Previous Year: 1983-93

For purposes of national health expenditures (NHE), survey statistics on revenues (not shown on Table 1) are analyzed in estimating the growth in the largest component of health care costs—community hospital expenditures. This one segment of NHE accounted for 33 percent of all health spending in 1991 (Letsch et al., 1992). The survey also identifies 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. Figure 2 shows changes from the same quarter 1 year earlier in measures of hospital utilization for 1983 through the second quarter of 1993.

Figure 2

Percent Change in Inpatient Days, Outpatient Visits, and Beds from the Same Period of Previous Year: 1983-93

Private Health Sector: Employment, Hours, and Earnings

The Bureau of Labor Statistics (BLS) collects monthly information on employment for all workers and earnings and work hours for non-supervisory workers in a sample of 370,000 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, 1993a).

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 point in 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 3 and 4 and Figure 3 present statistics on employment, average hourly earnings, and average weekly hours in private (non-government) health service establishments. Similar statistics for the all-private non-agricultural sector, included on these tables, provide a basis for comparing the economy as a whole with the health sector in employment, earnings, and work hours. Table 5 summarizes business activity in the health sector and the overall economy by measuring change in the implied non-supervisory work hours and payroll. Implied work hours are the product of the number of non-supervisory employees and average weekly hours. Implied non-supervisory payrolls are calculated by multiplying implied work hours by average hourly earnings. Figure 4 shows changes from the same quarter 1 year earlier in payroll for 1983 through the second quarter of 1993.

Table 3

Employment, Hours, and Earnings in Private Health Service Establishments, by Selected Type of Establishment: 1990-93

Type of Establishment and Measure	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
Health Services (SIC 80)
Total Employment in Thousands	7,814.3	8,182.9	8,523.3	7,767.7	8,131.0	8.470.6	8,580.5	8,667.4	8,735.7	8,836.4
Non-Supervisory Workers:
Employment in Thousands	6,947.6	7,275.8	7,575.3	6,907.2	7,231.0	7,531.4	7,627.1	7,698.2	7,755.0	7,843.9
Average Weekly Hours	32.5	32.5	32.8	32.4	32.5	32.6	32.9	32.8	32.7	32.7
Average Hourly Earnings	$10.40	$10.96	$11.39	$10.31	$10.90	$11.30	$11.44	$11.57	$11.68	$11.70
Offices and Clinics of Medical Doctors (SIC 801)
Total Employment in Thousands	1,338.2	1,404.5	1,472.7	1,331.5	1,393.7	1,460.2	1,485.7	1,504.7	1,517.6	1,538.1
Non-Supervisory Workers:
Employment in Thousands	1,104.5	1,155.4	1,209.4	1,100.0	1,148.4	1,200.7	1,219.9	1,232.9	1,242.0	1,258.4
Average Weekly Hours	31.8	31.9	32.1	31.6	31.9	32.0	32.2	32.2	32.1	32.2
Average Hourly Earnings	$10.58	$11.13	$11.41	$10.46	$11.08	$11.32	$11.46	$11.65	$11.72	$11.85
Offices and Clinics of Dentists (SIC 802)
Total Employment in Thousands	512.9	527.6	541.9	512.4	524.9	539.1	545.2	549.3	552.3	560.0
Non-Supervisory Workers:
Employment in Thousands	449.7	463.5	474.3	449.5	461.1	471.6	477.3	481.1	483.5	489.8
Average Weekly Hours	28.4	28.3	28.3	28.4	28.3	28.2	28.3	28.3	28.1	28.4
Average Hourly Earnings	$10.14	$10.62	$11.01	$10.09	$10.58	$10.97	$10.99	$11.19	$11.25	$11.34
Nursing and Personal Care Facilities (SIC 805)
Total Employment in Thousands	1,415.4	1,492.6	1,542.7	1,404.6	1,484.6	1,531.1	1,552.5	1,569.1	1,581.9	1,604.6
Non-Supervisory Workers:
Employment in Thousands	1,278.9	1,347.4	1,393.7	1,269.7	1,339.7	1,383.2	1,403.4	1,417.8	1,428.6	1,449.0
Average Weekly Hours	32.1	32.1	32.3	31.9	32.0	32.0	32.7	32.3	32.0	32.2
Average Hourly Earnings	$7.24	$7.56	$7.85	$7.20	$7.52	$7.81	$7.90	$7.95	$8.05	$8.09
Private Hospitals (SIC 806)
Total Employment in Thousands	3,548.7	3,655.1	3,759.8	3,530.3	3,635.7	3,746.4	3,780.0	3,792.4	3,805.5	3,815.4
Non-Supervisory Workers:
Employment in Thousands	3,248.4	3,352.5	3,451.4	3,230.0	3,334.1	3,439.0	3,470.2	3,481.3	3,491.8	3,499.6
Average Weekly Hours	34.2	34.2	34.4	34.2	34.2	34.4	34.5	34.4	34.5	34.5
Average Hourly Earnings	$11.79	$12.50	$13.03	$11.67	$12.43	$12.90	$13.12	$13.26	$13.38	$13.38
All Private Non-Agricultural Establishments
Total Employment in Thousands	91,115	89,854	89,866	91,386	89,884	89,924	90,715	90,714	89,217	91,297
Non-Supervisory Workers:
Employment in Thousands	73,800	72,650	72,866	74,054	72,662	72,898	73,678	73,755	72,357	74,316
Average Weekly Hours	34.5	34.3	34.4	34.5	34.3	34.3	34.6	34.5	34.0	34.4
Average Hourly Earnings	$10.01	$10.32	$10.57	$9.96	$10.29	$10.53	$10.57	$10.70	$10.78	$10.79
Employment in Thousands
All Hospitals	4,852.5	4,958.2	5,086.2	4,835.1	4,936.8	5,068.1	5,112.5	5,128.8	5,146.6	5,163.4
Private Hospitals (SIC 806)	3,548.7	3,655.1	3,759.8	3,530.3	3,635.7	3,746.4	3,780.0	3,792.4	3,805.5	3,815.4
Federal Hospitals	231.6	233.5	237.0	232.5	233.2	236.7	237.5	237.7	238.1	239.3
State Hospitals	426.2	416.7	419.8	427.8	417.2	420.1	420.2	419.1	418.2	417.6
Local Hospitals	646.1	652.9	669.7	644.5	650.6	664.9	674.8	679.6	684.7	691.0

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

NOTES: Data presented here incorporate conversion to the 1987 Standard Industrial Classification (SIC) and a historical reconstruction of components back to the inception of the series, whenever possible. Q designates quarter of year. Quarterly data are not seasonally adjusted.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1990-September 1993.

Table 4

Percent Change in Employment, Hours, and Earnings in Private Health Service Establishments, by Selected Type of Establishment: 1990-93

Type of Establishment and Measure	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
	Annual Percent Change			Percent Change From the Same Period of Previous Year
Health Services (SIC 80)
Total Employment	4.7	4.7	4.2	4.5	4.7	4.2	4.0	4.2	4.3	4.3
Non-Supervisory Workers:
Employment	4.7	4.7	4.1	4.5	4.7	4.2	4.0	4.1	4.2	4.1
Average Weekly Hours	0.3	−0.0	0.7	0.2	0.2	0.3	0.6	0.5	−0.4	0.4
Average Hourly Earnings	5.9	5.3	3.9	6.3	5.8	3.7	3.6	3.7	4.0	3.5
Offices and Clinics of Medical Doctors (SIC 801)
Total Employment	5.5	5.0	4.9	5.6	4.7	4.8	4.6	5.1	5.4	5.3
Non-Supervisory Workers:
Employment	5.5	4.6	4.7	5.5	4.4	4.6	4.4	4.9	4.9	4.8
Average Weekly Hours	−0.4	0.4	0.7	−0.8	1.2	0.1	0.6	0.6	−0.4	0.6
Average Hourly Earnings	8.1	5.3	2.5	8.7	5.9	2.2	2.8	3.0	4.4	4.7
Offices and Clinics of Dentists (SIC 802)
Total Employment	2.6	2.9	2.7	2.6	2.4	2.7	2.6	2.7	3.5	3.9
Non-Supervisory Workers:
Employment	2.8	3.1	2.3	2.8	2.6	2.3	2.1	2.5	3.4	3.8
Average Weekly Hours	−0.2	−0.4	0.2	−1.0	−0.1	−0.4	0.4	0.0	−1.3	0.7
Average Hourly Earnings	7.8	4.7	3.7	8.2	4.9	3.7	3.3	3.8	3.1	3.4
Nursing and Personal Care Facilities (SIC 805)
Total Employment	4.4	5.5	3.4	4.1	5.7	3.1	3.2	3.6	4.2	4.8
Non-Supervisory Workers:
Employment	4.3	5.4	3.4	4.0	5.5	3.2	3.3	3.7	4.2	4.8
Average Weekly Hours	0.9	0.1	0.5	0.6	0.3	0.1	0.8	0.2	−0.7	0.4
Average Hourly Earnings	6.5	4.4	3.9	7.1	4.5	3.9	4.0	3.8	3.8	3.6
Private Hospitals (SIC 806)
Total Employment	3.2	3.0	2.9	3.0	3.0	3.0	2.9	2.6	2.3	1.8
Non-Supervisory Workers:
Employment	3.3	3.2	2.9	3.0	3.2	3.1	3.0	2.6	2.2	1.8
Average Weekly Hours	0.7	−0.0	0.6	0.9	0.1	0.4	0.3	0.4	0.4	0.5
Average Hourly Earnings	5.2	6.0	4.2	5.5	6.5	3.8	3.6	3.9	4.2	3.7
All Private Non-Agricultural Establishments
Total Employment	1.1	−1.4	0.0	1.4	−1.6	0.0	0.2	0.6	1.3	1.5
Non-Supervisory workers:
Employment	1.0	−1.6	0.3	1.4	−1.9	0.3	0.5	1.0	1.7	1.9
Average Weekly Hours	−0.3	−0.6	0.2	−0.3	−0.7	0.2	−0.0	0.1	−0.1	0.3
Average Hourly Earnings	3.7	3.1	2.5	3.9	3.2	2.3	2.3	2.5	2.6	2.5
Employment
All Hospitals	2.4	2.2	2.6	2.3	2.1	2.7	2.7	2.5	2.2	1.9
Private Hospitals (SIC 806)	3.2	3.0	2.9	3.0	3.0	3.0	2.9	2.6	2.3	1.8
Federal Hospitals	1.9	0.8	1.5	3.3	0.3	1.5	1.1	1.1	0.9	1.1
State Hospitals	−3.7	−2.2	0.7	−3.8	−2.5	0.7	1.2	0.6	−0.4	−0.6
Local Hospitals	2.2	1.1	2.6	2.5	0.9	2.2	2.9	3.6	3.9	3.9

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

NOTES: Data presented here incorporate conversion to the 1987 Standard Industrial Classification (SIC) and a historical reconstruction of components back to the inception of the series whenever possible. Q designates quarter of year.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1989-September 1993.

Figure 3

Percent Change in Employment from the Same Period of Previous Year: 1984-93

Table 5

Percent Change in Implied Non-Supervisory Payrolls and Work Hours in Private Health Service Establishments, by Selected Type of Establishment: 1990-93

Type of Establishment	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
	Annual Percent Change			Percent Change From this Same Period of Previous s Year
Private Health Service Establishments (SIC 80)
Payrolls	11.2	10.3	8.9	11.3	11.0	8.3	8.4	8.5	7.9	8.3
Work Hours	5.0	4.7	4.8	4.7	4.9	4.5	4.6	4.6	3.7	4.6
Offices and Clinics of Medical Doctors (SIC 801)
Payrolls	13.6	10.6	8.1	13.7	11.8	6.9	8.0	8.7	9.1	10.4
Work Hours	5.1	5.1	5.4	4.7	5.6	4.7	5.1	5.5	4.5	5.5
Offices and Clinics of Dentists (SIC 802)
Payrolls	10.6	7.5	6.4	10.1	7.4	5.7	5.8	6.4	5.3	8.1
Work Hours	2.6	2.6	2.5	1.8	2.5	1.9	2.5	2.5	2.1	4.6
Nursing and Personal Care Facilities (SIC 805)
Payrolls	12.1	10.1	8.0	12.2	10.6	7.3	8.3	7.8	7.4	9.0
Work Hours	5.2	5.5	4.0	4.7	5.8	3.4	4.1	3.9	3.5	5.2
Private Hospitals (SIC 806)
Payrolls	9.4	9.4	7.9	9.6	10.1	7.5	7.0	7.1	6.9	6.0
Work Hours	4.0	3.2	3.5	3.9	3.3	3.5	3.3	3.0	2.6	2.3
All Private Non-Agricultural Establishments
Payrolls	4.5	0.9	3.0	5.0	0.6	2.9	2.7	3.6	4.3	4.9
Work Hours	0.8	−2.1	0.5	1.1	−2.5	0.5	0.5	1.1	1.6	2.2

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

NOTES: Data presented here incorporate conversion to the 1987 Standard Industrial Classification (SIC) and a historical reconstruction of components back to the inception of the series, whenever possible. Q designates quarter of year. Quarterly data 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 1989-September 1993.

Figure 4

Percent Change for Non-Supervisory Payroll from the Same Period of Previous Year: 1983-93

For purposes of NHE, changes in work hours by industry combined with changes in prices (discussed in a later section) can be used to gauge the direction and magnitude of expenditure change in specific industries. We use these composite indicators in the estimation of growth in physician and dental expenditures for the most recent period. We compare the historical relationship of changes in this indicator with changes in expenditures and estimate this relationship for the most recent period.

Prices

Consumer Prices

The BLS publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services. Tables 6 and 7 and Figures 5 and 6 present information on the all-urban consumer price index (CPI) that measures changes in prices faced by 80 percent of the non-institutionalized population in the United States. (The more restrictive wage earner CPI gauges prices faced by wage earners and clerical workers. These workers account for 32 percent of the non-institutionalized population [U.S. Department of Labor, 1993b].)

Table 6

Selected Items of the Consumer Price Index for All Urban Consumers: 1990-93

Item	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
All Items	130.7	136.2	140.3	129.3	135.6	139.8	140.9	141.9	143.1	144.2
All Items Less Medical Care	128.8	133.8	137.5	127.5	133.3	137.0	138.0	138.9	140.0	141.0
Apparel and Upkeep	124.1	128.7	131.9	125.2	128.8	132.5	130.9	133.6	133.1	134.6
Energy	102.1	102.4	103.0	97.3	101.7	102.6	105.8	104.3	102.7	104.7
Food and Beverages	132.1	136.8	138.7	131.3	137.4	138.5	138.7	139.3	140.7	141.4
Housing: Shelter	140.0	146.3	151.2	138.6	145.4	150.5	152.0	152.5	154.3	155.2
Medical Care	162.8	177.0	190.1	160.8	175.3	188.7	191.5	194.1	197.7	200.3
Medical Care Services1	162.7	177.1	190.5	160.5	175.2	188.9	192.1	195.0	198.8	201.8
Professional Services	156.1	165.7	175.8	155.0	164.5	174.7	177.0	179.0	181.6	184.1
Physicians' Services	160.8	170.5	181.2	159.8	169.3	180.3	182.6	184.6	187.7	190.5
Dental Services	155.8	167.4	178.7	154.4	165.5	177.0	180.4	182.6	184.8	187.6
Hospital and Related Services	178.0	196.1	214.0	174.5	193.2	211.3	216.0	220.6	226.2	230.0
Hospital Room	175.4	191.9	208.7	172.2	189.5	206.1	210.6	215.2	220.6	224.6
Other Inpatient Services2	142.7	158.0	172.3	139.4	155.4	170.2	173.9	177.0	181.1	183.9
Outpatient Services2	138.7	153.4	168.7	136.3	151.1	166.4	170.1	174.7	179.9	183.0
Medical Care Commodities	163.4	176.8	188.0	162.3	175.4	187.8	189.0	190.4	193.0	194.2
Prescription Drugs	181.7	199.7	214.7	180.2	197.6	214.5	215.6	218.0	221.4	221.6
Non-Prescription Drugs and Medical Supplies2	120.6	126.2	131.2	120.1	125.9	131.1	132.1	132.1	133.2	135.6
Internal and Respiratory Over-the-Counter Drugs	145.9	152.4	158.2	144.9	151.9	158.4	159.9	159.3	160.4	163.4
Non-Prescription Medical Equipment and Supplies	138.0	145.0	150.9	138.1	144.8	150.4	151.2	152.1	153.8	156.4

Includes the net cost of private health insurance not shown in professional or hospital and related services.

December 1986 = 100.

NOTES: 1982-84 = 100.0 unless noted. Q designates quarter of year. Quarterly data 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 1990-June 1993.

Table 7

Percent Change in Selected Items of the Consumer Price Index for All Urban Consumers: 1990-93

Item	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
	Annual Percent Change			Percent Change From the Same Period of Previous Year
All Items	5.4	4.2	3.0	4.6	4.8	3.1	3.1	3.1	3.2	3.1
All Items Less Medical Care	5.2	3.9	2.7	4.3	4.6	2.8	2.8	2.8	2.9	2.9
Apparel and Upkeep	4.6	3.7	2.5	4.6	2.9	2.8	2.2	1.4	2.0	1.6
Energy	8.2	0.4	0.5	0.2	4.5	0.9	2.6	2.4	3.4	2.0
Food and Beverages	5.8	3.6	1.4	5.4	4.7	0.8	1.4	1.7	1.8	2.1
Housing: Shelter	5.4	4.5	3.4	5.2	4.9	3.5	3.3	3.1	3.0	3.1
Medical Care	9.1	8.7	7.4	9.0	9.0	7.7	7.2	6.8	6.3	6.1
Medical Care Services1	9.3	8.9	7.6	9.1	9.2	7.8	7.5	7.2	6.8	6.8
Professional Services	6.6	6.2	6.1	6.6	6.1	6.2	6.0	5.8	5.4	5.3
Physicians' Services	7.2	6.0	6.3	7.3	5.9	6.5	6.4	6.3	5.9	5.7
Dental Services	6.7	7.5	6.7	6.3	7.2	6.9	6.5	6.1	5.8	6.0
Hospital and Related Services	10.9	10.2	9.1	10.8	10.8	9.4	9.1	9.0	8.7	8.8
Hospital Room	10.9	9.4	8.8	11.2	10.0	8.8	9.0	9.0	8.8	9.0
Other Inpatient Services	10.7	10.7	9.1	10.1	11.5	9.5	9.1	8.4	7.8	8.0
Outpatient Services	11.2	10.6	10.0	11.2	10.8	10.1	9.7	10.2	10.1	10.0
Medical Care Commodities	8.4	8.2	6.4	8.3	8.1	7.1	5.7	5.2	4.3	3.4
Prescription Drugs	10.0	9.9	7.6	10.0	9.7	8.5	6.5	6.0	5.0	3.3
Non-Prescription Drugs and Medical Supplies	5.2	4.7	3.9	5.0	4.8	4.1	3.9	3.4	3.0	3.5
Internal and Respiratory Over-the-Counter Drugs	5.2	4.5	3.8	4.6	4.8	4.3	4.0	3.7	3.3	3.2
Non-Prescription Medical Equipment and Supplies	5.3	5.0	4.1	5.7	4.8	3.9	3.6	2.7	2.4	4.0

Includes net cost of private health insurance not shown in professional or hospital and related services.

NOTE: Q designates quarter of year.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for January 1989-June 1993.

Figure 5

Percent Change in Measures of Price Inflation from the Same Period of Previous Year: 1983-93

Figure 6

Percent Change in Measures of Price Inflation from the Same Period of Previous Year: 1984-93

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 price changes for out-of-pocket expenditures made directly by consumers. The composite CPI for medical care weights together product-specific or service-specific CPIs in proportion to household out-of-pocket expenditures for these items. For example, the composite medical care CPI measures inflation for the 3 percent of hospital expenditures that are made out-of-pocket by consumers; the remaining 97 percent of the costs of hospital care paid by private health insurers, Medicare, Medicaid, and other payers are not weighted into the CPI for medical care. In addition, some medical care sector indexes measure changes in list or charged prices, rather than in the 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 CPI for hospital and related services, adjusted by the Health Care Financing Administration (HCFA) to provide transaction price changes, are used as measures of inflation for the health industry. The indexes are used to develop a fixed-weight 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 (Letsch, 1993).

Background on Input Price Indexes

In 1979, HCFA developed the Medicare hospital input price index (hospital market basket), which was designed to measure the pure price changes associated with expenditure changes for hospital services. In the early 1980s, the skilled nursing facility (SNF) and home health agency (HHA) input price indexes, often referred to as “market baskets,” were developed to price a consistent set of goods and services over time. Also in the early 1980s, the original Medicare hospital input price index was revised for use in updating payment rates for the prospective payment system (PPS). All of these indexes have played an important role in helping to set Medicare payment percent increases and in understanding the contribution of input price increases to growing health expenditures.

The input price indexes, or market baskets, are Laspeyres or fixed-weight indexes that are constructed in two steps. First, a base period is selected. For example, for the PPS hospital input price index, the base period is 1987. Cost categories, such as food, fuel, and labor, are identified and their 1987 expenditure amounts determined. The proportion or share of total expenditures included in specific spending categories is calculated. These proportions are called cost or expenditure weights. There are 28 expenditure categories in the 1987-based PPS hospital input price index.

Second, a price proxy is selected to match each expenditure category: Its purpose is to measure the rate of price increase of the goods or services in that category. The price proxy index for each spending category is multiplied by the expenditure weight for the category. The sum of these products (weights multiplied by the price index) over all cost categories yields the composite input price index for any given time period, usually a fiscal year or a calendar year. The percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider.

The input price indexes are estimated on a historical basis and forecasted over 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 8 through 13 are forecasted, and are expected to change as more recent historical data become available and subsequent quarterly forecasts are received.

Table 8

Percent Change in Four-Quarter Moving Averages in the Prospective Payment System Hospital Input Price Index, by Expense Category: 1992-95

Expense Category1	Base Year Weights 19872	Four Quarters Ending
		1992Q1	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2	1993Q3	1993Q4	1994Q1	1994Q2	1994Q3	1994Q4	1995Q1	1995Q2	1995Q3	1995Q4
Total	100.000	3.4	3.1	3.0	3.0	3.1	3.1	3.1	3.1	3.3	3.4	3.6	3.8	3.9	4.0	4.1	4.2
Compensation	61.713	4.5	4.3	4.1	3.9	3.7	3.6	3.6	3.7	3.7	3.8	3.8	3.9	4.0	4.1	4.2	4.3
Wages and Salaries	52.216	4.2	3.9	3.7	3.4	3.3	3.1	3.2	3.2	3.3	3.3	3.4	3.4	3.6	3.8	4.0	4.1
Employee Benefits	9.497	6.4	6.2	6.0	6.1	6.0	6.0	6.1	6.0	6.1	6.0	6.0	5.8	5.6	5.5	5.5	5.6
Other Professional Fees	1.649	4.3	4.2	4.0	3.9	3.8	3.6	3.5	3.5	3.4	3.4	3.5	3.6	3.8	4.0	4.1	4.2
Energy and Utilities	2.368	−5.5	−6.2	−5.0	−0.9	2.3	2.6	1.2	1.4	1.7	2.0	3.6	4.0	3.3	3.3	3.1	3.0
Fuel Oil, Coal, and Other Fuel	0.624	−18.3	−17.7	−14.4	−5.5	3.2	1.9	−1.9	−0.4	−0.6	−0.1	5.1	6.5	5.8	6.3	4.9	4.4
Electricity	1.135	5.3	3.4	1.8	1.2	1.1	1.1	1.1	1.5	2.5	3.1	3.2	2.6	2.0	1.7	2.1	2.4
Natural Gas	0.343	−3.0	−4.2	−1.9	2.0	5.0	10.4	11.2	8.0	8.8	5.8	2.5	2.0	0.0	−0.3	0.9	1.8
Motor Gasoline	0.230	−15.5	−15.1	−11.2	−2.6	2.0	1.1	−2.3	−3.6	−5.0	−3.1	2.3	6.1	7.3	7.2	5.5	3.2
Water and Sewerage Maintenance	0.036	7.6	7.6	7.1	6.8	6.5	6.2	5.8	5.4	5.3	5.4	5.7	6.0	5.9	5.9	5.8	5.8
Professional Liability Insurance	1.433	2.4	3.9	4.8	3.3	3.4	3.7	4.2	5.0	5.7	6.3	6.9	7.5	8.2	9.0	9.6	10.0
All Other	32.838	1.8	1.5	1.5	1.7	1.8	2.0	1.9	2.0	2.3	2.6	3.1	3.5	3.7	3.7	3.7	3.7
Other Products	21.788	1.2	1.0	1.1	1.4	1.8	2.0	1.9	2.0	2.1	2.3	2.6	2.9	3.0	3.2	3.3	3.5
Pharmaceuticals	3.873	8.3	7.9	7.2	6.5	5.9	5.4	5.0	4.8	4.9	5.0	5.1	4.9	4.6	4.4	4.5	5.0
Food	3.299	0.8	0.7	0.9	0.8	1.0	1.1	1.3	1.7	2.2	2.6	2.8	2.9	2.8	2.8	2.7	2.7
Direct Purchase	2.111	−0.6	−0.5	0.0	0.2	0.5	0.8	1.1	1.6	2.1	2.5	2.7	2.7	2.5	2.3	2.1	2.0
Contract Service	1.188	3.1	2.8	2.4	2.0	1.7	1.7	1.8	2.0	2.3	2.6	2.9	3.2	3.4	3.5	3.6	3.7
Chemicals and Cleaning Products	3.126	−4.0	−5.2	−4.4	−2.3	0.1	1.7	1.6	1.5	1.4	1.0	2.0	2.9	3.5	4.1	4.1	4.0
Surgical and Medical Instruments	2.672	1.6	1.8	1.9	2.2	2.3	2.3	2.5	2.6	2.5	2.3	2.2	2.1	2.3	2.7	2.8	2.9
Photographic Supplies	2.623	−1.4	−1.2	−0.7	−0.2	−0.4	−0.5	−0.7	−0.8	−0.2	0.2	0.9	1.7	2.0	2.4	2.7	3.1
Rubber and Plastics	2.323	0.4	−0.1	−0.3	0.0	0.6	0.8	0.9	0.8	0.5	0.4	0.2	0.3	0.5	0.8	1.1	1.2
Paper Products	1.399	−2.7	−2.7	−2.1	−1.4	−0.6	−0.4	−0.3	0.3	1.4	2.7	4.2	5.0	5.3	5.3	5.1	5.3
Apparel	1.142	1.9	1.7	1.6	1.7	1.8	1.7	1.6	1.1	0.7	0.5	0.5	1.1	1.9	2.5	2.7	2.3
Minor Machinery and Equipment	0.497	1.4	0.9	0.5	0.3	0.2	0.3	0.5	0.7	1.0	1.4	1.7	1.9	2.1	2.2	2.3	2.3
Miscellaneous Products	0.833	1.4	0.8	0.8	1.2	1.6	1.8	1.8	1.9	2.0	2.0	2.2	2.4	2.4	2.5	2.5	2.5
Other Services	11.050	3.0	2.6	2.4	2.2	1.9	1.9	1.9	2.2	2.7	3.4	4.1	4.6	5.0	4.8	4.5	4.3
Business Services	3.845	2.9	2.5	2.4	2.1	1.5	1.5	1.4	1.9	2.5	3.1	3.8	4.1	4.5	4.6	4.6	4.5
Computer and Data Processing	1.992	2.2	1.5	1.3	1.4	1.8	2.6	3.2	3.7	4.2	4.2	4.1	4.1	4.0	4.3	4.7	5.1
Transportation and Shipping	1.233	1.4	1.0	1.0	2.2	3.0	3.2	3.1	3.0	2.9	3.4	4.1	4.7	4.8	4.7	4.5	4.3
Telephone	0.987	1.7	1.7	1.2	0.6	0.2	0.0	0.1	0.3	0.5	0.8	1.1	1.5	1.9	2.1	2.2	2.3
Blood Services	0.588	2.1	4.5	6.5	5.8	4.5	1.5	−0.5	−0.5	0.4	1.6	2.3	2.7	2.7	3.3	3.9	4.2
Postage	0.372	13.1	8.8	4.9	1.2	0.0	0.0	0.0	0.0	2.1	10.9	19.8	28.6	32.6	22.0	13.0	5.3
Other—Labor Intensive	1.233	4.1	3.9	3.4	2.9	2.4	2.2	2.2	2.5	2.8	3.1	3.3	3.4	3.6	3.7	3.9	4.0
Other—Non-Labor Intensive	0.800	3.6	3.2	3.0	3.0	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1

For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1990).

Category weights may not sum to totals because of rounding.

NOTES: Data through 1993, Quarter 2 are historical. Data beginning with 1993, Quarter 3 are forecasted. Q designates quarter of year. Percent change data shown are four-quarter moving averages. The following is an example of how a percent change is calculated: Use the quarterly index levels shown in Table 9, 11, and 13. Choose the four-quarter period ending for which you would like to calculate the percent change (e.g., year-end 1993, Quarter 3). Count back three quarters so that you have a total of four (e.g., 1993, Quarter 3; 1993, Quarter 2; 1993, Quarter 1; 1992, Quarter 4). Average these four quarters (add the index levels and divide by 4). Now, take the four quarters previous to the four quarters that you just used (e.g., 1992, Quarter 3; 1992, Quarter 2; 1992, Quarter 1; 1991, Quarter 4). Average these four quarters. Finally, compute a percent change using the two averages.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Third quarter 1993 forecasts were produced by Data Resources, Inc./McGraw-Hill.

Table 13

Quarterly Index Levels of the Home Health Agency Input Price Index, by Expense Category: 1992-95

Expense Category1	Base Year Weights 19762	1992Q1	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2	1993Q3	1993Q4	1994Q1	1994Q2	1994Q3	1994Q4	1995Q1	1995Q2	1995Q3	1995Q4
Total	100.000	283.2	284.8	288.8	291.8	294.4	295.0	298.4	301.1	303.8	307.6	312.2	315.6	318.8	322.4	327.5	331.0
Compensation	73.040	293.4	294.8	299.4	302.7	305.5	305.6	309.6	312.3	315.1	319.2	324.6	328.3	331.8	335.4	341.4	345.1
Wages and Salaries	65.140	295.4	296.7	301.6	304.9	307.7	307.7	311.7	314.4	317.0	321.3	327.0	330.8	334.2	337.9	344.3	348.1
Employee Benefits	7.900	277.0	279.2	281.3	284.6	287.2	288.6	292.5	294.8	299.7	302.2	304.8	307.7	312.2	315.0	317.4	320.1
Transportation	4.870	225.7	229.0	230.5	233.7	234.4	235.9	235.9	240.4	242.4	247.4	248.8	252.3	252.4	258.3	259.6	262.7
Office Costs	2.790	287.3	289.9	292.1	295.2	298.2	301.3	303.7	306.6	309.3	311.7	314.3	317.0	319.8	322.6	325.3	328.1
Medical and Nursing Supplies	2.810	248.1	248.5	249.8	251.3	254.1	258.5	259.3	261.3	263.4	267.2	269.0	271.4	274.7	279.7	282.4	284.9
Rent	1.350	238.5	239.4	240.5	242.7	243.8	245.3	246.7	246.9	247.2	248.2	249.8	252.8	253.6	255.1	258.1	260.4
Energy and Utilities	1.170	248.2	251.0	256.8	258.3	257.7	261.3	260.0	262.2	266.2	268.0	270.1	272.1	274.6	277.1	280.0	282.4
Miscellaneous	7.100	243.9	245.8	247.4	249.4	251.7	253.5	254.9	257.4	259.6	261.5	263.3	265.3	267.5	269.5	271.5	273.5
Contract Services	6.870	283.2	284.8	288.8	291.8	294.4	295.0	298.4	301.1	303.8	307.6	312.2	315.6	318.8	322.4	327.5	331.0

For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1993b).

Category weights may not sum to totals because of rounding.

NOTES: Data through 1993, Quarter 2 are historical. Data beginning with 1993, Quarter 3 are forecasted. Q designates quarter of year.

SOURCES: Health Care Financing Administration, Office of the Actuary, Data from the Office of National Health Statistics, Division of Health Cost Analysis. Third quarter 1993 forecasts were produced by Data Resources, Inc./McGraw-Hill.

The methodology and price proxy definitions used in the input price indexes are described in the Federal Register notices that accompany the revisions of the PPS, HHA, and SNF cost limits. A description of the current structure of the PPS input price index was published in the September 4, 1990, Federal Register. The most recent PPS update for payment rates was published in the September 1, 1993, Federal Register. The latest HHA regulatory input price index was published in the July 8, 1993, Federal Register, and the latest SNF input price index was published in the October 7, 1992, Federal Register.

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 two tables: The first is a percent-change table, and the second provides the actual index numbers from which the percentages were computed. The hospital input price index for PPS is in Tables 8 and 9. The SNF input price index is in Tables 10 and 11. The HHA input price index is in Tables 12 and 13.

Table 9

Quarterly Index Levels of the Prospective Payment System Hospital Input Price Index, by Expense Category: 1992-95

Expense Category1	Base Year Weights 19872	1992Q1	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2	1993Q3	1993Q4	1994Q1	1994Q2	1994Q3	1994Q4	1995Q1	1995Q2	1995Q3	1995Q4
Total	100.000	123.9	124.8	126.0	126.7	127.7	128.7	129.9	130.9	132.2	133.4	135.0	136.1	137.7	138.9	140.7	142.0
Compensation	61.713	126.1	127.0	128.4	129.3	130.7	131.6	133.2	134.2	135.6	136.5	138.4	139.6	141.3	142.4	144.5	145.8
Wages and Salaries	52.216	124.2	125.0	126.2	127.0	128.1	128.9	130.4	131.2	132.3	133.2	134.9	136.1	137.6	138.5	140.5	141.7
Employee Benefits	9.497	136.5	137.9	140.4	142.1	144.5	146.4	148.9	150.7	153.6	154.9	157.4	158.9	161.9	163.4	166.2	168.1
Other Professional Fees	1.649	123.9	124.9	126.4	127.1	128.3	129.2	130.8	131.5	132.6	133.6	135.7	136.7	138.2	139.2	141.4	142.3
Energy and Utilities	2.368	108.9	114.6	120.0	117.0	113.2	117.0	117.4	119.1	119.1	121.0	121.9	123.3	122.2	124.8	125.9	127.1
Fuel Oil, Coal, and Other Fuel	0.624	108.3	120.5	125.0	123.9	117.9	120.8	111.6	125.5	126.2	123.9	123.0	133.7	131.7	129.3	128.3	139.7
Electricity	1.135	111.6	114.9	120.4	113.5	112.5	115.8	121.2	117.8	117.9	119.7	122.3	119.7	120.2	122.6	125.5	122.8
Natural Gas	0.343	96.8	92.3	101.5	109.6	102.0	107.2	112.5	110.6	111.0	110.8	109.6	109.6	111.4	113.0	112.1	112.4
Motor Gasoline	0.230	110.9	126.8	129.5	122.6	115.7	123.3	116.7	116.6	113.3	129.2	130.2	128.2	116.7	135.1	136.0	129.3
Water and Sewerage Maintenance	0.036	134.7	137.0	140.3	141.9	143.2	144.7	147.1	148.8	151.4	153.4	156.2	157.7	159.9	162.3	165.6	167.1
Professional Liability Insurance	1.433	133.5	134.1	135.3	137.0	138.7	140.4	142.6	145.2	147.8	150.4	153.7	157.5	161.9	165.7	169.5	173.3
All Other	32.838	120.3	121.0	121.6	122.0	122.5	123.5	123.9	124.8	126.1	127.6	128.6	129.5	131.0	132.2	133.3	134.5
Other Products	21.788	120.1	121.0	121.7	122.1	122.5	123.5	123.9	124.6	125.7	126.7	127.7	128.4	129.8	131.0	132.1	133.2
Pharmaceuticals	3.873	148.1	150.6	152.1	153.5	155.8	157.5	159.0	161.2	164.1	165.8	166.5	167.9	171.0	173.5	175.0	178.0
Food	3.299	115.8	116.5	116.5	116.5	117.3	118.1	118.9	119.3	120.6	121.6	122.4	122.6	123.9	124.8	125.6	125.9
Direct Purchase	2.111	113.1	114.0	113.7	113.5	114.2	115.3	115.9	116.2	117.6	118.4	119.1	118.9	120.0	120.9	121.5	121.3
Contract Service	1.188	120.7	121.1	121.6	122.0	122.6	123.3	124.1	124.9	126.1	127.2	128.2	129.3	130.7	131.9	133.0	134.1
Chemicals and Cleaning Products	3.126	115.0	115.8	118.1	118.1	117.7	119.1	118.5	118.8	119.7	120.9	123.3	123.8	124.9	125.7	128.1	128.6
Surgical and Medical Instruments	2.672	112.5	113.2	113.3	113.7	115.1	116.0	116.2	116.9	117.6	117.9	118.7	119.7	121.1	121.7	121.9	123.1
Photographic Supplies	2.623	114.2	113.9	114.2	114.2	112.6	113.3	113.3	113.5	114.0	114.7	115.6	116.0	116.9	117.9	119.3	120.3
Rubber and Plastics	2.323	112.2	112.5	113.0	113.4	113.4	113.5	114.1	113.8	113.5	113.8	114.4	114.5	114.7	115.2	115.9	116.0
Paper Products	1.399	115.1	115.7	115.4	115.1	114.6	115.2	115.5	117.3	119.0	121.0	122.3	123.3	125.3	126.9	128.6	130.4
Apparel	1.142	111.2	112.0	112.4	113.1	113.1	113.6	113.8	113.3	113.2	114.1	115.4	116.2	116.6	117.5	117.8	117.7
Minor Machinery and Equipment	0.497	112.3	112.1	112.0	112.2	112.7	112.7	113.0	113.5	114.3	114.8	115.4	116.1	116.9	117.4	118.1	118.7
Miscellaneous Products	0.833	116.5	117.6	118.0	118.5	118.9	119.9	119.9	120.8	121.7	122.3	122.9	123.8	124.7	125.5	126.0	127.0
Other Services	11.050	120.6	120.9	121.4	121.8	122.6	123.4	124.1	125.2	127.0	129.4	130.3	131.6	133.3	134.6	135.7	137.1
Business Services	3.845	120.9	120.0	120.4	120.2	121.9	122.1	122.6	123.8	125.9	127.1	128.2	129.5	131.8	132.8	133.8	135.2
Computer and Data Processing	1.992	129.5	130.2	131.3	132.4	133.0	135.4	136.6	137.8	139.4	140.6	141.9	143.3	145.4	147.4	149.7	151.5
Transportation and Shipping	1.233	119.8	121.5	122.3	124.0	124.4	125.2	125.2	127.6	128.6	131.3	132.0	133.9	134.0	137.1	137.8	139.4
Telephone	0.987	103.4	103.1	102.8	102.7	103.4	103.2	103.5	103.3	104.0	104.8	105.3	105.3	106.4	107.2	107.7	107.9
Blood Services	0.588	111.3	115.4	112.9	112.3	111.1	112.5	111.9	114.2	115.2	114.8	114.1	117.5	119.6	119.8	119.3	122.1
Postage	0.372	131.9	131.9	131.9	131.9	131.9	131.9	131.9	131.9	142.8	178.5	178.5	178.5	178.5	178.5	178.5	178.5
Other—Labor Intensive	1.233	119.1	119.6	120.5	121.0	121.6	122.3	123.6	124.7	125.7	126.4	127.8	129.1	130.8	131.3	132.9	134.4
Other—Non-Labor Intensive	0.800	123.4	124.4	125.4	126.3	127.3	128.3	129.1	130.2	131.1	132.3	133.4	134.2	135.1	136.4	137.5	138.3

For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1990)

Category weights may not sum to totals because of rounding.

NOTES: Data through 1993, Quarter 2 are historical. Data beginning with 1993, Quarter 3 are forecasted. Q designates quarter of year.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Third quarter 1993 forecasts were produced by Data Resources, Inc./McGraw-Hill.

Table 10

Percent Change in Four-Quarter Averages in the Skilled Nursing Facility Input Price Index, by Expense Category: 1992-95

Expense Category1	Base Year Weights 19772	Four Quarters Ending
		1992Q1	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2	1993Q3	1993Q4	1994Q1	1994Q2	1994Q3	1994Q4	1995Q1	1995Q2	1995Q3	1995Q4
Total	100.000	3.9	3.7	3.6	3.6	3.7	3.6	3.5	3.5	3.6	3.7	3.9	4.0	4.0	4.2	4.4	4.6
Compensation	70.620	4.3	4.2	4.0	4.0	3.9	3.8	3.7	3.7	3.8	3.9	4.1	4.3	4.3	4.5	4.8	5.1
Wages and Salaries	63.020	4.1	3.9	3.9	3.9	3.9	3.8	3.7	3.7	3.8	3.9	4.1	4.2	4.3	4.6	4.9	5.2
Employee Benefits	7.600	6.5	6.0	5.4	4.9	4.4	4.0	3.9	3.7	3.8	4.2	4.2	4.4	4.4	4.2	4.2	4.1
Fuel and Other Energy	4.270	−1.3	−1.9	−1.4	0.5	2.4	3.0	2.6	2.6	2.5	2.1	2.7	3.3	3.2	3.4	3.4	3.4
Fuel Oil and Coal	1.660	−8.3	−9.7	−8.5	−3.9	0.3	1.3	0.1	0.4	0.2	0.3	3.1	5.0	5.8	6.3	5.6	5.1
Electricity	1.210	3.3	3.2	2.8	2.2	2.2	2.0	1.9	1.6	1.4	0.9	0.5	0.5	0.4	0.7	1.0	1.3
Natural Gas	0.910	0.4	0.4	0.9	1.7	3.4	4.9	5.6	5.5	5.6	4.2	2.9	2.1	0.8	0.7	1.0	1.6
Water and Sewerage Maintenance	0.490	7.6	7.6	7.1	6.8	6.5	6.2	5.8	5.4	5.3	5.4	5.7	6.0	5.9	5.9	5.8	5.8
Food	9.740	1.4	1.3	1.3	1.2	1.2	1.4	1.6	2.0	2.4	2.7	2.8	2.9	2.8	2.7	2.6	2.6
Direct Purchase	4.930	−0.6	−0.5	0.0	0.1	0.5	0.8	1.1	1.7	2.2	2.6	2.8	2.7	2.5	2.3	2.1	2.1
Contract Service	4.810	3.1	2.8	2.4	2.1	1.8	1.8	2.0	2.3	2.6	2.7	2.9	3.0	3.0	3.1	3.0	2.9
All Other	15.370	4.7	4.4	4.1	4.0	4.0	3.9	3.9	3.9	3.9	3.9	3.9	3.8	3.7	3.7	3.7	3.8
Drugs	1.500	8.3	7.9	7.2	6.5	5.9	5.4	5.0	4.8	4.9	5.0	5.1	4.9	4.6	4.4	4.5	5.0
Supplies	3.280	3.6	3.2	3.0	3.0	3.1	3.1	3.1	3.2	3.1	3.1	3.2	3.2	3.1	3.1	3.1	3.1
Health Services	1.210	5.7	5.9	6.1	6.3	6.3	6.1	6.0	5.9	6.1	6.3	6.4	6.3	6.2	6.1	6.1	6.2
Other Business Services	4.590	4.6	4.3	4.0	3.8	3.8	3.8	3.9	3.9	3.9	3.7	3.6	3.5	3.4	3.4	3.4	3.5
Miscellaneous	4.790	3.6	3.2	3.0	3.0	3.1	3.1	3.1	3.2	3.1	3.1	3.2	3.2	3.1	3.1	3.1	3.1

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

Category weights may not sum to totals because of rounding.

NOTES: Data through 1993, Quarter 2 are historical. Data beginning with 1993, Quarter 3 are forecasted. Q designates quarter of year. Percent change data shown are four-quarter moving averages. The following is an example of how a percent change is calculated: Use the quarterly index levels shown in Tables 9, 11, and 13. Choose the four-quarter period ending for which you would like to calculate the percent change (e.g., year-end 1993, Quarter 3). Count back three quarters so that you have a total of four (e.g., 1993, Quarter 3; 1993, Quarter 2; 1993, Quarter 1; 1992, Quarter 4). Average these four quarters (add the index levels and divide by 4). Now, take the four quarters previous to the four quarters that you just used (e.g., 1992, Quarter 3; 1992, Quarter 2; 1992, Quarter 1; 1991, Quarter 4). Average these four quarters. Finally, compute a percent change using the two averages.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Third quarter 1993 forecasts were produced by Data Resources, Inc./McGraw-Hill.

Table 11

Quarterly Index Levels in the Skilled Nursing Facility Input Price Index, by Expense Category: 1992-95

Expense Category1	Base Year Weights 19772	1992Q1	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2	1993Q3	1993Q4	1994Q1	1994Q2	1994Q3	1994Q4	1995Q1	1995Q2	1995Q3	1995Q4
Total	100.000	235.7	237.5	239.8	241.7	244.2	245.8	248.2	250.3	253.9	255.6	258.3	260.6	264.1	267.4	270.8	273.5
Compensation	70.620	238.6	240.4	242.9	244.8	247.6	249.0	251.8	253.8	257.9	259.4	262.5	265.0	269.0	272.7	276.7	279.7
Wages and Salaries	63.020	237.3	239.1	241.7	243.4	246.3	247.7	250.4	252.4	256.4	257.9	261.1	263.6	267.6	271.4	275.6	278.7
Employee Benefits	7.600	249.2	251.2	253.0	256.1	258.4	259.7	263.1	265.3	269.6	271.9	274.2	276.9	280.9	283.4	285.6	288.0
Fuel and Other Energy	4.270	220.4	222.8	227.8	229.1	228.6	231.8	230.6	232.5	236.0	237.5	239.3	241.0	243.2	245.4	247.9	249.9
Fuel Oil and Coal	1.660	201.9	204.5	211.8	209.7	208.8	210.0	204.4	207.9	213.9	216.9	219.8	222.6	225.6	228.1	230.7	233.4
Electricity	1.210	216.8	218.5	219.5	221.2	220.5	223.4	223.0	222.9	223.0	223.2	223.6	224.1	225.0	226.0	226.9	227.7
Natural Gas	0.910	226.1	228.0	233.1	239.0	237.7	244.7	247.0	248.0	250.4	249.3	248.9	249.5	250.7	252.4	254.3	256.4
Water and Sewerage Maintenance	0.490	281.3	285.9	292.8	296.3	298.9	302.0	307.2	310.5	316.0	320.2	326.1	329.1	333.8	338.7	345.7	348.7
Food	9.740	186.8	187.4	187.4	188.3	189.4	190.7	191.7	193.3	194.8	196.1	197.4	198.6	199.9	201.2	202.3	203.5
Direct Purchase	4.930	164.6	165.4	164.7	165.3	166.1	167.3	168.1	169.6	170.9	171.9	172.8	173.5	174.5	175.5	176.2	177.0
Contract Service	4.810	209.7	210.0	210.6	211.8	213.3	214.7	215.9	217.5	219.3	220.9	222.6	224.2	225.9	227.5	229.1	230.6
All Other	15.370	257.5	260.1	262.2	264.6	267.6	270.1	272.2	275.1	278.1	280.4	282.6	285.0	288.1	290.8	293.3	296.1
Drugs	1.500	345.4	351.2	354.9	358.2	363.5	367.5	370.8	376.0	382.8	386.9	388.4	391.7	399.0	404.8	408.2	415.1
Supplies	3.280	229.1	230.8	232.4	234.2	236.4	238.1	239.4	241.8	243.8	245.6	247.3	249.2	251.2	253.1	255.0	256.9
Health Services	1.210	303.0	308.1	312.1	315.5	320.9	325.7	330.6	335.2	341.8	346.8	351.3	355.4	362.5	368.2	373.5	378.1
Other Business Services	4.590	266.9	269.2	271.3	274.2	276.9	279.8	282.0	284.8	287.2	289.5	291.9	294.4	297.0	299.6	302.1	304.7
Miscellaneous	4.790	229.1	230.8	232.4	234.2	236.4	238.1	239.4	241.8	243.8	245.6	247.3	249.2	251.2	253.1	255.0	256.9

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

Category weights may not sum to totals because of rounding.

NOTES: Data through 1993, Quarter 2 are historical. Data beginning with 1993, Quarter 3 are forecasted. Q designates quarter of year.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. Third quarter 1993 forecasts were produced by Data Resources, Inc./McGraw-Hill.

Table 12

Percent Change in Four-Quarter Averages in the Home Health Agency Input Price Index, by Expense Category: 1992-95

Expense Category1	Base Year Weights 19762	Four Quarters Ending
		1992Q1	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2	1993Q3	1993Q4	1994Q1	1994Q2	1994Q3	1994Q4	1995Q1	1995Q2	1995Q3	1995Q4
Total	100.000	5.7	5.1	4.4	4.0	3.8	3.7	3.7	3.5	3.3	3.5	3.8	4.2	4.7	4.8	4.9	4.9
Compensation	73.040	6.3	5.6	4.8	4.3	3.9	3.9	3.8	3.6	3.3	3.5	3.9	4.4	4.9	5.1	5.2	5.2
Wages and Salaries	65.140	6.3	5.6	4.8	4.2	3.9	3.9	3.8	3.6	3.3	3.5	3.9	4.4	5	5.2	5.3	5.3
Employee Benefits	7.900	6.5	6.0	5.4	4.9	4.4	4.0	3.9	3.7	3.8	4.2	4.2	4.4	4.4	4.2	4.2	4.1
Transportation	4.870	1.4	1.0	1.0	2.2	3.0	3.2	3.1	3.0	2.9	3.4	4.1	4.7	4.8	4.7	4.5	4.3
Office Costs	2.790	4.6	4.3	4.0	3.8	3.8	3.8	3.9	3.9	3.9	3.7	3.6	3.5	3.4	3.4	3.4	3.5
Medical and Nursing Supplies	2.810	5.5	5.2	4.9	4.1	3.2	3.2	3.2	3.6	3.9	3.7	3.7	3.7	3.9	4.2	4.5	4.7
Rent	1.350	3.3	2.9	2.6	2.5	2.3	2.3	2.4	2.2	2.0	1.7	1.4	1.6	1.9	2.3	2.8	2.9
Energy and Utilities	1.170	−1.3	−1.9	−1.4	0.5	2.4	3.1	2.7	2.6	2.5	2.2	2.8	3.4	3.3	3.5	3.5	3.5
Miscellaneous	7.100	3.6	3.2	3.0	3.0	3.1	3.1	3.1	3.2	3.1	3.1	3.2	3.2	3.1	3.1	3.1	3.1
Contract Services	6.870	5.7	5.1	4.4	4.0	3.8	3.7	3.7	3.5	3.3	3.5	3.8	4.2	4.7	4.8	4.9	4.9

For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1993b).

Category weights may not sum to totals because of rounding.

NOTES: Data through 1993, Quarter 2 are historical. Data beginning with 1993, Quarter 3 are forecasted. Q designates quarter of year. Percent change data shown are four-quarter moving averages. The following is an example of how a percent change is calculated: Use the quarterly index levels shown in Tables 9, 11, or 13. Choose the four-quarter period ending for which you would like to calculate the percent change (e.g., year-end 1993, Quarter 3). Count back three quarters so that you have a total of four (e.g., 1993, Quarter 3; 1993, Quarter 2; 1993, Quarter 1; 1992, Quarter 4). Average these four quarters (add the index levels and divide by 4). Now, take the four quarters previous to the four quarters that you just used (e.g., 1992, Quarter 3; 1992, Quarter 2; 1992, Quarter 1; 1991, Quarter 4). Average these four quarters. Finally, compute a percent change using the two averages.

SOURCES: Health Care Financing Administration, Office of the Actuary, Data from the Office of National Health Statistics, Division of Health Cost Analysis. Third quarter 1993 forecasts were produced by Data Resources, Inc./McGraw-Hill.

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. Tables 14 and 15 and Figure 7 present national indicators of output and employment.

Table 14

Selected National Economic Indicators: 1990-93

Indicator	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
Gross Domestic Product
Billions in Dollars	$5,546	$5,723	$6,038	$5,541	$5,698	$5,991	$6,060	$6,194	$6,262	$6,328
Billions of 1987 Dollars	$4,897	$4,861	$4,986	$4,917	$4,856	$4,957	$4,998	$5,068	$5,078	$5,102
Implicit Price Deflator (1987 = 100.0)	113.2	117.7	121.1	112.7	117.3	120.9	121.2	122.2	123.3	124.0
Employment, Hours, and Earnings
Unemployment Rate, All Workers	5.5	6.7	7.4	5.3	6.7	7.5	7.6	7.3	7.0	7.0
Private Non-Agricultural Workers:
Total Employment in Thousands	91,115	89,854	89,866	91,386	89,884	89,924	90,715	90,714	89,217	91,297
Average Weekly Hours	34.5	34.3	34.4	34.5	34.3	34.3	34.6	34.5	34.0	34.4
Average Hourly Earnings	$10.01	$10.32	$10.57	$9.96	$10.29	$10.53	$10.57	$10.70	$10.78	$10.79
Health Services Workers:
Total Employment in Thousands	7,814	8,183	8,523	7,768	8,131	8,471	8,580	8,667	8,736	8,836
Average Weekly Hours	32.5	32.5	32.8	32.4	32.5	32.6	32.9	32.8	32.7	32.7
Average Hourly Earnings	$10.40	$10.96	$11.39	$10.31	$10.90	$11.30	$11.44	$11.57	$11.68	$11.70
Personal Income and Savings Income in Billions	$4,674	$4,851	$5,145	$4,649	$4,833	$5,094	$5,140	$5,328	$5,255	$5,373
Disposable Income in Billions	$4,051	$4,231	$4,500	$4,021	$4,217	$4,459	$4,497	$4,658	$4,598	$4,692
Savings in Billions	$170	$201	$239	$176	$206	$238	$220	$280	$178	$209
Personal Savings Rate	4.2	4.7	5.3	4.4	4.9	5.3	4.9	6.0	3.9	4.4
Prices1
Gross Domestic Product Fixed-Weight Price Index (1987 = 100.0)	113.5	118.2	122.1	112.9	117.8	121.8	122.5	123.5	124.8	125.6
Consumer Price Index, All Items	130.7	136.2	140.3	129.3	135.6	139.8	140.9	141.9	143.1	144.2
All Items Less Medical Care	128.8	133.8	137.5	127.5	133.3	137.0	138.0	138.9	140.0	141.0
Apparel and Upkeep	124.1	128.7	131.9	125.2	128.8	132.5	130.9	133.6	133.1	134.6
Energy	102.1	102.4	103.0	97.3	101.7	102.6	105.8	104.3	102.7	104.7
Food and Beverages	132.1	136.8	138.7	131.3	137.4	138.5	138.7	139.3	140.7	141.4
Housing: Shelter	140.0	146.3	151.2	138.6	145.4	150.5	152.0	152.5	154.3	155.2
Medical Care	162.8	177.0	190.1	160.8	175.3	188.7	191.5	194.1	197.7	200.3
Producer Price Index,2 Finished Consumer Goods	118.2	120.4	121.7	116.3	120.4	121.7	122.3	122.5	122.8	124.2

Base period = 1982-84, unless noted.

Formerly called the “Wholesale Price Index.”

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

SOURCES: U.S. Department of Commerce, Bureau of Economic Analysis: Survey of Current Business. Washington. U.S. Government Printing Office. Monthly reports for January 1990-August 1993; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1990-September 1993.

Table 15

Percent Change in Selected National Economic Indicators: 1990-93

Indicator	Calendar Year			1990Q2	1991Q2	1992Q2	1992Q3	1992Q4	1993Q1	1993Q2
	1990	1991	1992
	Annual Percent Change			Percent Change From the Same Period of Previous Year
Gross Domestic Product
Billions in Dollars	5.6	3.2	5.5	6.0	2.8	5.2	5.2	6.7	6.0	5.6
Billions of 1987 Dollars	1.2	−0.7	2.6	1.6	−1.3	2.1	2.6	3.9	3.2	2.9
Implicit Price Deflator (1987 = 100.0)	4.3	3.9	2.9	4.3	4.1	3.0	2.6	2.8	2.7	2.6
Employment, Hours, and Earnings
Unemployment Rate, All Workers1	0.3	1.2	0.7	0.0	1.3	0.7	0.8	0.4	−0.2	−0.5
Private Non-Agricultural Workers:
Total Employment	1.1	−1.4	0.0	1.4	−1.6	0.0	0.2	0.6	1.3	1.5
Average Weekly Hours	−0.3	−0.6	0.2	−0.3	−0.7	0.2	−0.0	0.1	−0.1	0.3
Average Hourly Earnings	3.7	3.1	2.5	3.9	3.2	2.3	2.3	2.5	2.6	2.5
Health Services Workers:
Total Employment	4.7	4.7	4.2	4.5	4.7	4.2	4.0	4.2	4.3	4.3
Average Weekly Hours	0.3	−0.0	0.7	0.2	0.2	0.3	0.6	0.5	−0.4	0.4
Average Hourly Earnings	5.9	5.3	3.9	6.3	5.8	3.7	3.6	3.7	4.0	3.5
Personal Income and Savings
Income	6.7	3.8	6.1	6.7	4.0	5.4	5.8	8.1	4.7	5.5
Disposable Income	7.0	4.4	6.4	7.0	4.9	5.7	6.1	8.3	4.8	5.2
Savings	11.8	18.5	18.4	18.3	17.2	15.5	17.6	32.1	−18.2	−12.3
Personal Savings Rate1	0.1	0.6	0.6	0.4	0.5	0.4	0.5	1.1	−1.1	−0.9
Prices2
Gross Domestic Product Fixed-Weight Price Index (1987 = 100.0)	4.5	4.1	3.3	4.4	4.3	3.4	3.2	3.3	3.3	3.1
Consumer Price Index, All Items	5.4	4.2	3.0	4.6	4.8	3.1	3.1	3.1	3.2	3.1
All Items Less Medical Care	5.2	3.9	2.7	4.3	4.6	2.8	2.8	2.8	2.9	2.9
Apparel and Upkeep	4.6	3.7	2.5	4.6	2.9	2.8	2.2	1.4	2.0	1.6
Energy	8.2	0.4	0.5	0.2	4.5	0.9	2.6	2.4	3.4	2.0
Food and Beverages	5.8	3.6	1.4	5.4	4.7	0.8	1.4	1.7	1.8	2.1
Housing: Shelter	5.4	4.5	3.4	5.2	4.9	3.5	3.3	3.1	3.0	3.1
Medical Care	9.1	8.7	7.4	9.0	9.0	7.7	7.2	6.8	6.3	6.1
Producer Price Index,3 Finished Consumer Goods	5.5	1.9	1.0	3.2	3.5	1.1	1.6	1.5	2.1	2.1

Change in rate, rather than percent change.

Base period = 1982-84, unless noted.

Formerly called the “Wholesale Price Index.”

NOTE: Q designates quarter of year.

SOURCES: U.S. Department of Commerce, Bureau of Economic Analysis: Survey of Current Business. Washington. U.S. Government Printing Office. Monthly reports for January 1989-August 1993; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1989-September 1993.

Figure 7

Percent Change in Indicators of National Economic Activity from the Same Period of Previous Year: 1984-93

Gross domestic product (GDP) measures the U.S. economy as the value of output 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 prices from the valuation of goods and services produced, so that the growth of real GDP reflects changes in the “physical” output of the economy (U.S. Department of Commerce, 1993).

Second Quarter Indicators

For the third consecutive quarter, indicators of hospital expenses show a marked deceleration when compared with the same period 1 year earlier. Growth in operating expenses was down more than 2 percentage points from the second quarter of 1992, increasing only 7.3 percent in the second quarter of 1993 to a level of $69.2 billion. Non-labor expenses accounted for most of the deceleration in operating expenses, growing 6.5 percent in the second quarter of 1993, 3.8 percentage points below that of the same period 1 year earlier. Inpatient expenses also reflected a slower growth, decelerating more than 1 percentage point from the second quarter of 1992. Amount of inpatient expenses per day grew 8.4 percent (to almost $1,000) in the second quarter of 1993 as compared with a growth rate of 10.4 percent in the second quarter of 1992. The inpatient expenses per admission was up 6.1 percent (to $6,194) during the same period.

Indicators for the second quarter of 1993 show a continuation of the growing substitution of outpatient services for more expensive inpatient care. Many measures of inpatient utilization—admissions, inpatient days, adult length of stay, beds available, and adult occupancy rates—declined from the second quarter of 1992. In fact, measures such as the inpatient days and adult length of stay are at their lowest levels since 1987-88. Surgical operations, however, continued to grow in the second quarter of 1992, up 1.4 percent from the same period 1 year earlier. Surgical operations may be performed either in an inpatient or outpatient setting, but more and more surgeries are occuring in the outpatient setting. The number of inpatient surgeries performed in community hospitals declined 31.8 percent from 1981 to 1991, whereas the number of outpatient surgeries increased 228.8 percent (American Hospital Association, 1992). This switch to outpatient from inpatient care may be because of the persistently high prices of inpatient hospital care and pushes by insurers and employers to reduce the persistent rate of increase in health care costs.

In the health service sector, growth in employment in the second quarter of 1992 remained close to the 1992 rates, increasing 4.3 percent in the second quarter of 1993. This amounted to the creation of 365,800 more jobs than in the second quarter of 1992, more than one-fourth of all jobs created in that period. The growth in employment in the private non-agricultural establishments was up 1.5 percent in the second quarter of 1993 from the same period in 1992, displaying the highest positive growth since the first quarter of 1991. Contrasted with the rest of the health care sector and the private non-agricultural sector, growth of employment in the hospital establishments has decelerated. This slowdown in the growth of employment in hospital establishments can also be seen in the deceleration in labor expenses, noted in the AHA panel survey during the past three quarters.

Growth in implied work hours (the product of the non-supervisory employees and average weekly hours) accelerated in both the private non-agricultural and health service establishments except for hospital establishments between the second quarters of 1992 and 1993. Change in the growth of employment was the driving force behind the deceleration in the hospital establishments and acceleration in the private non-agricultural establishments.

Growth in implied payroll (work hours times average hourly earnings) in total health care establishments remained stable, at 8.3 percent, whereas in private non-agricultural establishments growth accelerated from 2.9 percent to 4.9 percent. This accelerated payroll growth in the private non-agricultural establishments was also because of a growth in employment rather than changes in weekly hours or earnings. There was a fairly healthy growth in payroll and work hours for both offices and clinics of dentists and medical doctors. This acceleration was probably offset by the deceleration in private hospital establishments, leaving the growth in payroll and work hours in all private health service establishments in the second quarter of 1993 at about the same levels as in the second quarter of 1992.

The growth in CPI for all items remains unchanged in the second quarter of 1993, up 3.1 percent from 1 year earlier. Growth in medical care prices continued the deceleration that began in the second quarter of 1991, moving from 7.7 percent in the second quarter of 1992 to 6.1 in the second quarter of 1993. However, growth in medical care prices continues to remain at more than two times that of the CPI for all items less medical care.

Price growth for prescription drugs has decelerated remarkably during the last few years. Prescription drugs exhibited annual growth rates (when compared with the same period 1 year earlier) of 9.9 percent in 1990, 7.6 in 1991, and quarterly growth rates of 5.0 percent in the first quarter of 1993, and 3.3 in the second quarter of 1993. It has decelerated 5.2 percentage points (from 8.5 percent to 3.3 percent) from the second quarter of 1992 to that of 1993. The reasons behind this deceleration in the growth of prescription drugs may be twofold. First, competition has increased immensely in this industry with new chains entering the market and more discounted and generic drugs being sold. Secondly, manufacturers and wholesalers seem to be voluntarily holding down price growth in an effort to avoid mandatory price controls being proposed by health care reformers.

Overall economic conditions for the second quarter of 1993 continue to improve slightly. Real GDP grew 2.9 percent, up from 2.1 percent 1 year earlier. The unemployment rate dropped from 7.5 percent to 7.0 percent from the second quarter of 1992 to that of 1993. Total employment in the private non-agricultural establishments increased 1.5 percent, which was the largest increase experienced in nearly 3 years. The indicators previously described signal a steady but not extremely strong recovery from the recent recession.