Health care prices in May were 1 percent higher than they were a year ago—the smallest increase in nearly a quarter of a century, according to a recent report. The 12-month moving average of 1.7 percent was also the lowest since September 1998. The data comes from a report issued by the Altarum Institute on July 12, available at http://bit.ly/155SuVe.
“Although July marks the beginning of the fifth year of the expansion following the Great Recession, weak growth continues to exert downward pressure on overall prices, and dramatically so for health care prices,” the report states. “In this environment, health care prices cannot be expected to rise significantly in the near term.”
Dental care (3.6 percent) and hospitals (1.8 percent) showed the largest growth, while home health care and prescription drugs showed declines of 0.2 percent and 0.1 percent, respectively. “Health care price inflation in May 2013, at 1.0 percent year-over-year, is growing at a historically low rate,” the report states. “While ’all-time low’ may be too strong, given that our data extend back only to January 1990, it’s difficult to imagine a lower rate in the last 70 years.”
Health care costs are expected to continue to grow slowly in 2014, according to a separate report from PricewaterhouseCoopers’ Health Research Institute (HRI), titled “Medical Cost Trend: Behind the Numbers” and available at http://pwc.to/LG1YM7.
“Health care cost increases continue to exceed overall growth in wages, but the gap appears to be shrinking,” said Michael Thompson, principal with PwC’s human resource services practice.