Health Care Indicators for the United States

Abstract

Contained in this regular feature of the journal is a section on 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.

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 at changes occurring within the general economy and the health care sector.

The accompanying tables report quarterly statistics for 1991 and the calendar year aggregation of quarterly information in the past 3 to 10 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 sections that follow, we will identify important indicators of health care and national economic activity. We will discuss the sources of this information and then describe how it can be used to predict trends in health care expenditures and the share of national economic activity that is consumed by health care purchases.

Community hospital statistics

Since 1963, the American Hospital Association, in cooperation with member hospitals, has collected data on the operation of community hospitals through its National Hospital Panel Survey. Community hospitals, which comprised over 80 percent of all hospital facilities in the United States in 1990, 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 alcoholism and chemical dependency hospitals.

The panel survey samples approximately one-third of all U.S. community hospitals. The sample is designed to produce estimates of community hospitals indicators by bed size and region (American Hospital Association, no date). In Tables 1 and 2 and Figures 1 and 2, statistics covering expenses, utilization, beds, and personnel depict trends in the operation of community hospitals annually since 1982 and quarterly for 1991.

Table 1. Selected community hospital statistics: 1982-91.

Item	Calendar year										1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
Operating expenses
Total in millions	$109,091	$120,220	$126,028	$134,043	$146,032	$161,322	$177,770	$195,378	$217,113	$238,633	$57,189	$58,930	$60,214	$62,301
Labor in millions	62,843	68,757	71,381	74,715	80,169	87,533	96,415	106,019	117,828	128,704	30,971	31,692	32,516	33,526
Non-labor in millions	46,248	51,463	54,646	59,328	65,862	73,790	81,355	89,359	99,286	109,929	26,218	27,238	27,698	28,775
Inpatient expense in millions	94,346	103,361	107,005	111,416	119,286	129,824	140,482	152,147	165,792	178,401	43,406	43,979	44,586	46,421
Amount per patient day	347.60	390.77	442.57	492.71	535.15	581.02	631.91	690.44	764.59	843.60	795.30	834.82	866.44	879.91
Amount per admission	2,489	2,742	2,947	3,226	3,527	3,860	4,194	4,586	5,021	5,461	5,260	5,375	5,522	5,689
Utilization
Admissions in thousands	37,899	37,692	36,305	34,535	33,825	33,634	33,496	33,176	33,017	32,670	8,253	8,182	8,075	8,160
Inpatient days in thousands	271,422	264,504	241,780	226,129	222,904	223,441	222,313	220,361	216,836	211,475	54,578	52,681	51,459	52,756
Adult length of stay in days	7.2	7.0	6.7	6.5	6.6	6.6	6.6	6.6	6.6	6.5	6.6	6.4	6.4	6.5
Surgical operations in thousands	19,679	19,783	19,926	20,009	20,443	21,038	21,252	21,383	21,904	21,983	5,379	5,572	5,534	5,498
Outpatient visits in thousands	223,337	229,558	232,832	243,381	263,631	278,917	296,111	308,086	326,498	344,116	82,471	86,331	87,648	87,666
Beds in thousands	998	1,004	993	975	963	954	942	930	921	912	915	913	910	909
Adult occupancy rate1	74.5	72.2	66.6	63.6	63.4	64.1	64.5	64.9	64.5	63.5	66.3	63.4	61.4	63.1
Full-time equivalent (FTE) personnel
Total in thousands	3,144	3,188	3,115	3,044	3,055	3,077	3,112	3,162	3,229	3,249	3,242	3,244	3,252	3,259
Number per bed	3.2	3.2	3.1	3.1	3.2	3.2	3.3	3.4	3.5	3.6	3.5	3.6	3.6	3.6
Adjusted patient days per FTE2	100	97	91	89	89	90	90	89	88	87	22	22	21	22
Adjusted patient days in thousands	313,842	307,646	284,761	272,052	272,881	277,654	281,322	282,974	283,959	282,874	71,908	70,590	69,496	70,804

¹Adult occupancy rate is the ratio of average daily census to the average number of beds maintained during the reporting period.

²Adjusted 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 Hospital Panel Survey Reports. Chicago. Monthly reports for Jan. 1982-Dec. 1991.

Table 2. Percent change in selected community hospital statistics: 1982-91.

Item	Calendar year										1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
	Annual percent change										Percent change from the same period of previous year
Operating expenses
Total	15.8	10.2	4.8	6.4	8.9	10.5	10.2	9.9	11.1	9.9	9.0	9.7	9.7	11.2
Labor	16.1	9.4	3.8	4.7	7.3	9.2	10.1	10.0	11.1	9.2	9.4	9.1	8.6	9.9
Non-labor	15.5	11.3	6.2	8.6	11.0	12.0	10.3	9.8	11.1	10.7	8.6	10.3	11.0	12.9
Inpatient expense	15.6	9.6	3.5	4.1	7.1	8.8	8.2	8.3	9.0	7.6	6.6	7.3	7.1	9.3
Amount per patient day	16.2	12.4	13.3	11.3	8.6	8.6	8.8	9.3	10.7	10.3	11.6	9.9	10.3	9.3
Amount per admission	15.5	10.2	7.5	9.5	9.3	9.5	8.7	9.3	9.5	8.8	10.0	8.9	8.3	7.6
Utilization
Admissions	0.0	−0.5	−3.7	−4.9	−2.1	−0.6	−0.4	−1.0	−0.5	−1.1	−3.1	−1.4	−1.2	1.6
Inpatient days	−0.6	−2.5	−8.6	−6.5	−1.4	0.2	−0.5	−0.9	−1.6	−2.5	−4.5	−2.3	−2.9	−0.0
Adult length of stay	−0.6	−2.0	−5.1	−1.7	0.6	0.8	−0.1	0.1	−1.1	−1.4	−1.4	−0.9	−1.8	−1.6
Surgical operations	−0.2	0.5	0.7	0.4	2.2	2.9	1.0	0.6	2.4	0.4	−1.3	−0.2	0.7	2.2
Outpatient visits	1.1	2.8	1.4	4.5	8.3	5.8	6.2	4.0	6.0	5.4	4.0	4.5	5.1	8.0
Beds	1.1	0.6	−1.1	−1.8	−1.2	−0.9	−1.3	−1.3	−0.9	−1.0	−1.2	−1.3	−1.0	−0.7
Adult occupancy rate1	−1.2	−2.3	−5.7	−3.0	−0.2	0.7	0.3	0.5	−0.4	−0.9	−2.3	−0.7	−1.2	0.4
Full-time equivalent (FTE) personnel
Total	3.7	1.4	−2.3	−2.3	0.3	0.7	1.1	1.6	2.1	0.6	0.9	0.5	0.3	0.7
Number per bed	2.5	0.8	−1.2	−0.5	1.5	1.6	2.4	3.0	3.1	1.7	2.2	1.8	1.4	1.4
Adjusted patient days per FTE	−3.9	−3.3	−5.3	−2.3	−0.0	1.0	0.2	−1.0	−1.7	−1.0	−3.3	−0.8	−0.9	1.0
Adjusted patient days	−0.3	−2.0	−7.4	−4.5	0.3	1.7	1.3	0.6	0.3	−0.4	−2.4	−0.2	−0.6	1.7

¹Change 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 Jan. 1981-Dec. 1991.

Figure 1. Percent change in beds and level change in occupancy rates from the same period of previous year: 1981–91.

Figure 2. Percent change in inpatient days and outpatient visits from the same period of previous year: 1981–91.

For purposes of national health expenditures (NHE), Panel 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 30 percent of all health spending in 1990 (Levit et al., 1991). 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.

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 350,000 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, 1991).

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 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 employment, earnings, and work-hours for the economy as a whole with the health sector. Table 5 and Figure 4 summarize 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.

Table 3. Employment, hours, and earnings in private¹ health service establishments, by selected type of establishment: 1982-91.

Type of establishment and measure	Calendar year										1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
Health services (SIC 80)
Total employment in thousands	5,811.8	5,988.2	6,122.3	6,298.7	6,535.7	6,805.4	7,121.0	7,483.7	7,843.9	8,237.2	8,072.5	8,178.4	8,305.4	8,392.5
Non-supervisory workers:
Employment in thousands	5,203.2	5,380.8	5,462.3	5,607.0	5,810.2	6,052.1	6,324.3	6,654.1	6,973.5	7,323.7	7,176.9	7,272.7	7,385.9	7,459.5
Average weekly hours	33.0	32.6	32.5	32.5	32.4	32.4	32.4	32.5	32.5	32.5	32.4	32.5	32.7	32.6
Average hourly earnings	$6.92	$7.39	$7.71	$8.06	$8.35	$8.69	$9.21	$9.82	$10.41	$10.96	$10.74	$10.91	$11.05	$11.15
Offices and clinics of medical doctors (SIC 801)
Total employment in thousands	887.5	934.1	978.3	1,029.9	1,083.7	1,142.3	1,203.8	1,273.7	1,353.1	1,432.1	1,402.4	1,423.6	1,446.9	1,455.6
Non-supervisory workers:
Employment in thousands	732.1	790.2	820.4	857.8	900.7	946.0	992.0	1,052.0	1,117.3	1,179.5	1,155.9	1,174.6	1,191.5	1,195.9
Average weekly hours	32.0	31.5	30.9	30.9	31.2	31.1	31.6	31.9	31.8	31.9	31.8	32.0	32.0	32.0
Average hourly earnings	$6.92	$7.41	$7.68	$8.01	$8.35	$8.61	$9.07	$9.78	$10.59	$11.18	$11.05	$11.13	$11.19	$11.35
Offices and clinics of dentists (SIC 802)
Total employment in thousands	384.3	407.1	425.6	439.8	458.2	470.3	484.6	501.2	513.7	527.7	518.4	524.4	531.6	536.3
Non-supervisory workers:
Employment in thousands	339.8	359.7	377.8	391.7	404.4	414.7	424.5	438.6	450.4	463.5	455.2	460.6	467.6	470.7
Average weekly hours	28.2	28.1	28.8	28.6	28.0	28.3	28.5	28.5	28.4	28.3	28.3	28.4	28.2	28.4
Average hourly earnings	$6.74	$7.12	$7.42	$7.88	$8.27	$8.50	$8.82	$9.41	$10.14	$10.61	$10.46	$10.58	$10.64	$10.77
Nursing and personal care facilities (SIC 805)
Total employment in thousands	1,067.1	1,106.6	1,148.2	1,198.9	1,246.6	1,285.3	1,314.3	1,360.7	1,419.8	1,499.7	1,467.8	1,492.7	1,523.5	1,514.6
Non-supervisory workers:
Employment in thousands	968.5	1,002.3	1,038.4	1,084.7	1,126.3	1,161.2	1,187.0	1,230.3	1,282.9	1,361.0	1,325.1	1,347.0	1,375.4	1,396.5
Average weekly hours	31.4	31.3	31.1	31.2	31.4	31.6	31.6	31.8	32.1	32.2	32.0	32.0	32.4	32.2
Average hourly earnings	$4.89	$5.20	$5.42	$5.61	$5.80	$6.00	$6.33	$6.80	$7.24	$7.56	$7.46	$7.52	$7.60	$7.66
Private hospitals (SIC 806)
Total employment in thousands	3,014.4	3,036.7	3,004.0	2,997.3	3,038.0	3,143.0	3,295.0	3,440.2	3,547.0	3,646.4	3,607.1	3,629.9	3,674.2	3,674.3
Non-supervisory workers:
Employment in thousands	2,766.6	2,784.3	2,743.2	2,732.2	2,768.2	2,866.9	3,010.8	3,146.9	3,247.0	3,350.9	3,306.1	3,329.0	3,371.3	3,397.3
Average weekly hours	34.5	34.1	34.1	34.3	34.2	34.1	34.0	34.0	34.2	34.2	34.0	34.2	34.4	34.3
Average hourly earnings	$7.56	$8.12	$8.55	$9.00	$9.36	$9.84	$10.51	$11.21	$11.79	$12.50	$12.16	$12.43	$12.66	$12.76
All private non-agricultural establishments
Total employment in thousands	73,729	74,330	78,472	81,125	82,832	85,190	88,150	90,550	91,649	90,548	89,408	90,537	91,273	90,975
Non-supervisory workers:
Employment in thousands	59,487	60,070	63,415	65,586	67,018	68,976	71,383	73,400	74,254	73,238	72,097	73,220	73,935	73,698
Average weekly hours	34.8	35.0	35.2	34.9	34.7	34.8	34.7	34.6	34.5	34.3	33.9	34.3	34.6	34.5
Average hourly earnings	$7.68	$8.02	$8.31	$8.57	$8.76	$8.98	$9.28	$9.65	$10.01	$10.34	$10.23	$10.31	$10.36	$10.47
Employment in thousands
All hospitals	4,378.5	4,389.0	4,326.5	4,301.8	4,323.7	4,437.5	4,601.0	4,741.9	4,863.9	4,994.3	4,943.0	4,974.9	5,027.3	5,032.2
Private hospitals (SIC 806)	3,014.4	3,036.7	3,004.0	2,997.3	3,038.0	3,143.0	3,295.0	3,440.2	3,547.0	3,646.4	3,607.1	3,629.9	3,674.2	3,674.3
Federal hospitals	234.8	237.5	241.0	248.1	246.3	249.4	240.7	227.4	233.3	239.6	235.9	239.1	241.3	242.0
State hospitals	494.2	471.2	458.8	448.4	438.1	438.7	446.2	442.4	430.5	427.4	430.2	429.5	425.2	424.5
Local hospitals	635.1	643.6	622.8	607.9	601.3	606.4	619.0	632.0	653.1	681.1	669.8	676.4	686.6	691.5

¹Excludes 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 an 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 Jan. 1982-Dec. 1991.

Table 4. Percent change in employment, hours, and earnings in private¹ health service establishments, by selected type of establishment: 1983-91.

Type of establishment and measure	Calendar year									1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1983	1984	1985	1986	1987	1988	1989	1990	1991
	Annual percent change										Percent change from same period of previous year
Health services (SIC 80)
Total employment	3.0	2.2	2.9	3.8	4.1	4.6	5.1	4.8	5.0	5.2	4.9	5.0	5.0
Non-supervisory workers:
Employment	3.4	1.5	2.6	3.6	4.2	4.5	5.2	4.8	5.0	5.2	4.9	5.0	5.0
Average weekly hours	−1.1	−0.4	0.0	−0.3	−0.1	0.2	0.1	0.3	−0.0	−0.1	0.2	−0.3	0.1
Average hourly earnings	6.7	4.4	4.5	3.6	4.2	5.9	6.7	5.9	5.3	4.9	5.8	5.6	5.1
Offices and clinics of medical doctors (SIC 801)
Total employment	5.3	4.7	5.3	5.2	5.4	5.4	5.8	6.2	5.8	6.5	6.0	5.7	5.2
Non-supervisory workers:
Employment	7.9	3.8	4.6	5.0	5.0	4.9	6.0	6.2	5.6	6.4	5.9	5.3	4.7
Average weekly hours	−1.6	−1.9	−0.1	1.0	−0.2	1.5	1.0	−0.4	0.5	−0.2	1.3	0.1	0.7
Average hourly earnings	7.1	3.6	4.4	4.2	3.2	5.3	7.9	8.3	5.6	7.1	6.3	4.8	4.1
Offices and clinics of dentists (SIC 802)
Total employment	6.0	4.5	3.3	4.2	2.6	3.0	3.4	2.5	2.7	1.6	2.1	3.2	3.9
Non-supervisory workers:
Employment	5.9	5.0	3.7	3.2	2.5	2.4	3.3	2.7	2.9	1.8	2.2	3.6	4.1
Average weekly hours	−0.5	2.5	−0.7	−1.9	1.0	0.6	−0.1	−0.2	−0.4	0.0	0.0	−1.1	−0.5
Average hourly earnings	5.7	4.1	6.2	5.0	2.8	3.9	6.6	7.7	4.7	5.8	4.8	4.1	4.2
Nursing and personal care facilities (SIC 805)
Total employment	3.7	3.8	4.4	4.0	3.1	2.3	3.5	4.3	5.6	5.6	5.9	6.5	4.5
Non-supervisory workers:
Employment	3.5	3.6	4.5	3.8	3.1	2.2	3.6	4.3	6.1	5.6	5.7	6.4	6.6
Average weekly hours	−0.2	−0.7	0.2	0.7	0.5	0.0	0.9	0.9	0.1	0.8	0.3	−0.5	−0.1
Average hourly earnings	6.4	4.2	3.4	3.4	3.5	5.4	7.4	6.6	4.4	5.3	4.5	4.3	3.7
Private hospitals (SIC 806)
Total employment	0.7	−1.1	−0.2	1.4	3.5	4.8	4.4	3.1	2.8	3.1	2.8	2.9	2.4
Non-supervisory workers:
Employment	0.6	−1.5	−0.4	1.3	3.6	5.0	4.5	3.2	3.2	3.3	3.1	3.1	3.4
Average weekly hours	−1.0	0.1	0.5	−0.3	−0.3	−0.5	0.0	0.7	−0.0	−0.6	0.1	−0.1	0.4
Average hourly earnings	7.4	5.3	5.2	4.0	5.1	6.8	6.7	5.2	6.0	4.6	6.5	6.8	6.2
All private nonagricultural establishments
Total employment	0.8	5.6	3.4	2.1	2.8	3.5	2.7	1.2	−1.2	−0.9	−1.5	−1.4	−1.0
Non-supervisory workers:
Employment	1.0	5.6	3.4	2.2	2.9	3.5	2.8	1.2	−1.4	−1.1	−1.7	−1.5	−1.1
Average weekly hours	0.5	0.6	−0.8	−0.5	0.0	−0.2	−0.3	−0.3	−0.5	−1.0	−0.6	−0.6	0.1
Average hourly earnings	4.4	3.7	3.0	2.3	2.5	3.4	4.0	3.7	3.2	3.4	3.4	3.2	3.0
Employment
All hospitals	0.2	−1.4	−0.6	0.5	2.6	3.7	3.1	2.6	2.7	2.9	2.7	2.8	2.3
Private hospitals (SIC 806)	0.7	−1.1	−0.2	1.4	3.5	4.8	4.4	3.1	2.8	3.1	2.8	2.9	2.4
Federal hospitals	1.2	1.4	3.0	−0.7	1.2	−3.5	−5.5	2.6	2.7	1.6	2.5	3.0	3.6
State hospitals	−4.7	−2.6	−2.2	−2.3	0.1	1.7	−0.9	−2.7	−0.7	0.1	−0.1	−1.2	−1.6
Local hospitals	1.3	−3.2	−2.4	−1.1	0.9	2.1	2.1	3.3	4.3	4.4	4.3	4.3	4.1

¹Excludes hospitals, clinics, and other health related establishments run by all governments.

NOTE: Data presented here incorporate conversion to the 1987 Standard Industrial Classification (SIC) and an historical reconstruction of components back to the inception of the series whenever possible.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for Jan. 1983-Dec. 1991.

Figure 3. Percent change for total employment from the same period of previous year: 1983–91.

Table 5. Percent change in implied non-supervisory payrolls and work-hours in private¹ health service establishments, by selected type of establishment: 1983-91.

Type of establishment	Calendar year									1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1983	1984	1985	1986	1987	1988	1989	1990	1991
	Annual percent change									Percent change from same period of previous year
Private health service establishments (SIC 80)
Payrolls	9.1	5.6	7.2	7.0	8.4	10.8	12.4	11.3	10.6	10.3	11.2	10.5	10.4
Work-hours	2.2	1.1	2.6	3.3	4.1	4.7	5.3	5.1	5.0	5.1	5.1	4.7	5.1
Offices and clinics of medical doctors (SIC 801)
Payrolls	13.7	5.6	9.0	10.5	8.1	12.1	15.5	14.6	12.0	13.7	14.0	10.5	9.8
Work-hours	6.2	1.8	4.4	6.0	4.8	6.4	7.1	5.8	6.1	6.2	7.2	5.4	5.5
Offices and clinics of dentists (SIC 802)
Payrolls	11.3	11.9	9.5	6.2	6.3	7.1	10.0	10.4	7.4	7.7	7.1	6.7	8.0
Work-hours	5.4	7.6	3.0	1.3	3.5	3.0	3.2	2.5	2.5	1.8	2.2	2.5	3.6
Nursing and personal care facilities (SIC 805)
Payrolls	10.0	7.2	8.2	8.2	7.2	7.8	12.3	12.1	10.9	12.0	10.8	10.4	10.4
Work-hours	3.3	2.9	4.6	4.6	3.6	2.2	4.5	5.2	6.2	6.4	6.0	5.9	6.5
Private hospitals (SIC 806)
Payrolls	7.0	3.9	5.4	5.1	8.6	11.6	11.6	9.3	9.4	7.4	9.9	10.0	10.2
Work-hours	−0.4	−1.4	0.1	1.0	3.3	4.5	4.6	3.9	3.2	2.7	3.2	3.0	3.8
All private non-agricultural establishments
Payrolls	6.0	10.1	5.7	4.0	5.5	6.8	6.6	4.7	1.3	1.2	1.1	1.0	1.9
Work-hours	1.5	6.2	2.6	1.7	3.0	3.3	2.5	0.9	−1.9	−2.1	−2.3	−2.1	−1.0

¹Excludes 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 an 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 Jan. 1983-Dec. 1991.

Figure 4. Percent change for non-supervisory payrolls from the same period of previous year: 1983-91.

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 study the historical relationship of changes in this indicator to 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 Figure 5 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, 1990].)

Table 6. Selected items of the Consumer Price Index for all urban consumers: 1982-91.

Item	Calendar year										1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
All items	96.5	99.6	103.9	107.6	109.6	113.6	118.3	124.0	130.7	136.2	134.8	135.6	136.7	137.7
All items less medical care	96.8	99.6	103.7	107.2	108.8	112.6	117.0	122.4	128.8	133.8	132.6	133.3	134.3	135.1
Apparel and upkeep	97.8	100.2	102.0	105.0	105.9	110.6	115.4	118.6	124.1	128.7	126.3	128.8	128.0	131.7
Energy	99.1	99.9	100.9	101.6	88.2	88.6	89.2	94.3	102.1	102.4	103.2	101.7	103.1	101.8
Food and beverages	97.3	99.5	103.2	105.6	109.1	113.5	118.2	124.9	132.1	136.8	136.1	137.4	136.8	136.9
Housing: shelter	96.9	99.1	104.0	109.8	115.8	121.2	127.1	132.8	140.0	146.3	144.6	145.4	147.2	147.9
Medical care	92.5	100.6	106.9	113.5	122.0	130.1	138.6	149.2	162.8	177.0	172.4	175.3	178.7	181.7
Medical care services1	92.6	100.7	106.7	113.2	121.9	130.0	138.3	148.9	162.7	177.1	172.6	175.2	178.7	181.8
Professional services	93.2	99.8	107.0	113.6	120.8	128.8	137.5	146.4	156.1	165.7	162.3	164.5	167.0	169.1
Physicians' services	92.9	100.1	107.0	113.3	121.5	130.4	139.8	150.0	160.8	170.5	167.4	169.3	171.6	173.6
Dental services	93.1	99.4	107.5	114.2	120.6	128.8	137.5	146.0	155.8	167.4	162.7	165.5	169.4	172.1
Hospital and related services	90.3	100.5	109.2	116.1	123.1	131.6	143.9	160.5	178.0	196.1	190.9	193.2	197.9	202.3
Hospital room	90.4	100.6	109.0	115.4	122.3	131.1	143.3	158.1	175.4	191.9	187.3	189.5	193.3	197.4
Other inpatient services2	NA	NA	NA	NA	NA	103.9	114.0	128.9	142.7	158.0	153.7	155.4	159.5	163.3
Outpatient services2	NA	NA	NA	NA	NA	103.3	112.5	124.7	138.7	153.4	148.9	151.1	155.1	158.5
Medical care commodities	92.3	100.2	107.5	115.2	122.7	130.9	139.9	150.8	163.4	176.8	171.7	175.4	178.9	181.0
Prescription drugs	90.2	100.1	109.7	120.1	130.4	140.8	152.0	165.2	181.7	199.7	192.9	197.6	202.4	205.6
Non-prescription drugs and medical supplies2	NA	NA	NA	NA	NA	103.1	108.1	114.6	120.6	126.2	124.1	125.9	127.2	127.8
Internal and respiratory over-the-counter drugs	93.3	100.3	106.4	112.2	117.7	123.9	130.8	138.7	145.9	152.4	150.4	151.9	153.7	153.7
Non-prescription medical equipment and supplies	94.5	100.4	105.1	109.6	115.0	119.6	123.9	131.1	138.0	145.0	141.4	144.8	145.9	148.0

¹Includes net cost of private health insurance not shown in professional or hospital and related services.

²December 1986 = 100.

NOTES: 1982-84 = 100.0 unless noted. Q designates quarter of year. Quarterly data not seasonally adjusted. NA designates not available.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for Jan. 1982-Dec. 1991.

Table 7. Percent change in selected items of the Consumer Price Index for all urban consumers: 1982-91.

Item	Calendar year										1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
	Annual percent change										Percent change from the same period of previous year
All items	6.1	3.2	4.3	3.5	1.9	3.7	4.1	4.8	5.4	4.2	5.3	4.8	3.9	3.0
All items less medical care	5.9	2.9	4.1	3.4	1.6	3.5	3.9	4.6	5.2	3.9	5.0	4.6	3.6	2.6
Apparel and upkeep	2.6	2.5	1.8	2.9	0.8	4.4	4.3	2.8	4.6	3.7	4.5	2.9	3.9	3.7
Energy	1.5	0.8	1.0	0.7	−13.2	0.4	0.8	5.7	8.2	0.4	6.9	4.5	−0.7	−8.1
Food and beverages	4.1	2.2	3.8	2.3	3.3	4.1	4.1	5.7	5.8	3.6	4.1	4.7	3.1	2.4
Housing: shelter	7.1	2.3	4.9	5.6	5.5	4.7	4.8	4.5	5.4	4.5	5.6	4.9	3.7	3.8
Medical care	11.6	8.7	6.2	6.2	7.5	6.6	6.5	7.7	9.1	8.7	9.6	9.0	8.5	8.0
Medical care services1	11.9	8.7	6.0	6.0	7.7	6.6	6.5	7.6	9.3	8.9	9.8	9.2	8.5	8.0
Professional services	8.5	7.2	7.1	6.2	6.4	6.6	6.7	6.4	6.6	6.2	6.6	6.1	5.9	6.0
Physicians' services	9.4	7.7	7.0	5.8	7.2	7.4	7.2	7.3	7.2	6.0	7.0	5.9	5.5	5.5
Dental services	7.8	6.7	8.1	6.3	5.6	6.7	6.8	6.2	6.7	7.5	6.8	7.2	7.8	8.1
Hospital and related services	14.1	11.4	8.6	6.3	6.0	6.9	9.4	11.5	10.9	10.2	11.3	10.8	9.8	8.9
Hospital room	15.7	11.3	8.3	5.9	6.0	7.2	9.2	10.3	10.9	9.4	10.4	10.0	8.9	8.4
Other inpatient services	NA	NA	NA	NA	NA	NA	9.7	13.1	10.7	10.7	12.5	11.5	10.2	8.9
Outpatient services	NA	NA	NA	NA	NA	NA	8.9	10.9	11.2	10.6	11.1	10.8	10.7	9.8
Medical care commodities	10.3	8.5	7.3	7.1	6.6	6.7	6.9	7.8	8.4	8.2	8.4	8.1	8.4	7.8
Prescription drugs	11.7	11.0	9.6	9.5	8.6	8.0	7.9	8.7	10.0	9.9	9.9	9.7	10.1	9.8
Non-prescription drugs and medical supplies	NA	NA	NA	NA	NA	NA	4.9	6.0	5.2	4.7	5.2	4.8	5.0	3.7
Internal and respiratory over-the-counter drugs	10.8	7.5	6.2	5.4	4.9	5.3	5.5	6.1	5.2	4.5	5.5	4.8	5.0	2.6
Non-prescription medical equipment and supplies	9.3	6.2	4.6	4.4	4.9	4.0	3.6	5.8	5.3	5.0	4.6	4.8	5.0	5.8

¹Includes net cost of private health insurance not shown in professional or hospital and related services.

NOTES: Q designates quarter of year. NA designates not available.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics: CPI Detailed Report. Washington. U.S. Government Printing Office. Monthly reports for Jan. 1981-Dec. 1991.

Figure 5. Percent change in measures of price inflation from the same period of previous year: 1982-91.

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 to 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 made by consumers directly. The composite CPI for medical care weights together product- 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 5 percent of hospital expenditures that are made out of pocket by consumers; the remaining 95 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 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 NHE, a combination of CPIs for selected medical care items and input price indexes for hospitals and nursing homes are used as measures of inflation for the health industry. The indexes are used to develop a personal health care fixed-weight price index to more accurately depict price changes affecting the entire health care industry than does the overall CPI medical care index (Levit et al., 1991).

Background on input price indexes

In 1979, the Health Care Financing Administration (HCFA) developed the hospital input price index 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. They have played an important role in helping to set 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 hospital prospective payment system (PPS) input price index.

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

The input price indexes are estimated on a historical basis and forecasted out several years. The HCFA-chosen price proxies are forecasted under contract with Data Resources, Inc./McGraw Hill (DRI). Following every calendar year quarter, in March, June, September, and December, DRI updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions.

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 PPS input price index was published September 4, 1990 (Federal Register). The latest HHA regulatory input price index was published December 9, 1991 (Federal Register), and the latest SNF input price index was published April 1, 1991 (Federal Register).

Current data

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 8. Percent change in calendar year periods for the prospective payment system hospital input price index, by expense category: 1989-91.

Expense category1	Base year weights 1987	Calendar year
		1989	1990	1991
Total	100.000	5.4	4.9	3.9
Wages and salaries	52.212	4.9	5.0	4.5
Employee benefits	9.497	6.9	7.9	7.0
Other professional fees	1.649	4.6	4.8	4.3
Energy and utilities	2.376	7.4	9.6	−1.5
Fuel oil, coal, and other fuel	0.625	13.6	22.2	−10.3
Electricity	1.143	3.2	3.0	7.2
Natural gas	0.343	6.0	−2.0	−1.8
Motor gasoline	0.229	13.5	21.0	−11.2
Water and sewerage maintenance	0.036	6.1	6.7	7.3
Professional liability insurance	1.433	0.6	−0.1	1.3
All other	32.839	5.8	3.6	2.4
Other products	21.788	6.1	3.3	1.9
Pharmaceuticals	3.873	9.1	8.9	8.2
Food	3.299	4.5	3.9	1.2
Direct purchase	2.111	4.5	3.5	0.0
Contract service	1.188	4.6	4.7	3.4
Chemicals and cleaning products	3.126	7.5	−1.4	−1.2
Surgical and medical instruments	2.672	4.1	2.6	1.5
Photographic supplies	2.623	8.8	3.7	−1.2
Rubber and plastics	2.323	3.0	0.9	1.3
Paper products	1.399	6.5	1.2	−1.4
Apparel	1.142	2.1	2.7	2.1
Minor machinery and equipment	0.497	3.7	2.8	1.9
Miscellaneous products	0.833	5.1	4.9	2.1
Other services	11.051	5.0	4.3	3.3
Business services	3.845	5.4	4.5	3.1
Computer and data processing	1.992	7.5	6.4	2.9
Transportation and shipping	1.233	5.0	5.6	2.8
Telephone	0.987	1.0	0.4	1.6
Blood services	0.588	5.5	0.1	−0.1
Postage	0.372	3.1	0.0	14.8
Other—labor intensive	1.233	3.7	4.0	4.1
Other—non-labor intensive	0.800	4.8	5.4	4.2

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1990).

NOTE: All data are historical.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1992 forecasts are made by Data Resources, Inc./McGraw-Hill.

Table 9. Calendar year index levels for the prospective payment system hospital input price index, by expense category: 1988-91.

Expense category1	Base year weights 1987	Calendar year
		1988	1989	1990	1991
Total	100.000	106.1	111.8	117.3	121.8
Wages and salaries	52.212	105.6	110.8	116.4	121.6
Employee benefits	9.497	107.1	114.6	123.6	132.1
Other professional fees	1.649	105.7	110.5	115.9	120.9
Energy and utilities	2.376	99.9	107.4	117.7	115.9
Fuel oil, coal, and other fuel	0.625	100.4	114.1	139.5	125.0
Electricity	1.143	100.0	103.2	106.3	113.9
Natural gas	0.343	96.0	101.8	99.7	98.0
Motor gasoline	0.229	103.1	117.0	141.6	125.7
Water and sewerage maintenance	0.036	106.8	113.3	120.8	129.7
Professional liability insurance	1.433	128.4	129.2	129.1	130.7
All other	32.839	106.2	112.4	116.4	119.2
Other products	21.788	106.9	113.5	117.3	119.5
Pharmaceuticals	3.873	110.2	120.3	130.9	141.7
Food	3.299	104.9	109.7	114.0	115.4
Direct purchase	2.111	104.9	109.6	113.4	113.4
Contract service	1.188	105.0	109.9	115.1	119.0
Chemicals and cleaning products	3.126	114.1	122.7	121.0	119.5
Surgical and medical instruments	2.672	102.2	106.3	109.1	110.7
Photographic supplies	2.623	102.8	111.8	115.9	114.5
Rubber and plastics	2.323	107.2	110.4	111.4	112.8
Paper products	1.399	110.3	117.4	118.8	117.1
Apparel	1.142	103.1	105.2	108.1	110.3
Minor machinery and equipment	0.497	103.0	106.7	109.8	111.8
Miscellaneous products	0.833	103.1	108.5	113.8	116.2
Other services	11.051	104.7	110.0	114.8	118.6
Business services	3.845	104.1	109.7	114.6	118.2
Computer and data processing	1.992	109.5	117.6	125.1	128.7
Transportation and shipping	1.233	104.7	109.9	116.1	119.3
Telephone	0.987	99.3	100.3	100.8	102.5
Blood services	0.588	100.1	105.6	105.7	105.7
Postage	0.372	110.1	113.5	113.5	130.4
Other—labor intensive	1.233	104.0	107.8	112.1	116.7
Other—non-labor intensive	0.800	105.3	110.3	116.3	121.2

¹For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1990).

NOTES: All data are historical. Index levels are based on fiscal year 1987 (ending 3rd quarter 1987) index = 100.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1992 forecasts are made by Data Resources, Inc./McGraw-Hill.

Table 10. Calendar year percent change in the skilled nursing facility input price index, by expense category: 1983-91.

Expense category1	Base year weights 1977	Calendar year
		1983	1984	1985	1986	1987	1988	1989	1990	1991
Total	100.000	5.4	4.3	3.1	2.9	3.3	5.1	6.6	6.3	4.3
Wages and salaries	63.020	6.4	4.2	3.4	3.4	3.5	5.4	7.4	6.6	4.4
Employee benefits	7.600	6.2	4.2	1.9	3.4	1.8	5.9	5.0	5.4	6.2
Food	9.740	2.0	3.7	0.3	2.5	3.3	4.3	5.2	4.5	1.6
Direct purchase	4.930	1.8	3.6	−1.8	1.8	2.4	4.5	4.5	3.5	0.0
Contract service	4.810	2.2	3.8	2.2	3.2	4.2	4.1	5.8	5.3	3.0
Fuel and other energy	4.270	2.4	3.2	−0.1	−7.8	−0.6	1.1	3.7	8.8	0.8
Electricity	1.210	3.2	6.4	3.5	1.5	−0.4	1.4	2.8	2.4	3.8
Natural gas	0.910	16.7	0.7	−0.6	−4.9	−4.6	−0.6	2.8	0.1	1.3
Fuel oil and coal	1.660	−6.1	2.2	−3.4	−18.9	0.3	0.4	4.2	20.4	−3.7
Water and sewerage maintenance	0.490	8.3	6.6	6.0	5.4	5.3	5.5	6.1	6.7	7.3
All other	15.370	4.3	5.3	4.8	4.1	4.7	4.9	5.6	6.0	5.1
Drugs	1.500	10.7	9.2	9.2	8.8	9.1	7.9	9.1	8.9	8.2
Supplies	3.280	3.2	4.4	3.5	1.9	3.7	4.1	4.8	5.4	4.2
Health services	1.210	7.7	7.0	5.8	7.2	7.4	7.2	7.3	7.2	6.0
Other business services	4.590	3.5	5.3	5.1	5.1	4.2	4.6	4.9	5.3	4.8
Miscellaneous	4.790	3.2	4.4	3.5	1.9	3.7	4.1	4.8	5.4	4.2

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1991).

NOTE: All data are historical.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1992 forecasts are made by Data Resources, Inc./McGraw-Hill.

Table 11. Calendar year index levels in the skilled nursing facility input price index, by expense category: 1982-91.

Expense category1	Base year weights 1977	Calendar year
		1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
Total	100.00	153.9	162.3	169.3	174.5	179.5	185.5	194.9	207.7	220.8	230.2
Wages and salaries	63.020	149.6	159.3	166.0	171.7	177.5	183.7	193.6	208.0	221.7	231.4
Employee benefits	7.600	162.2	172.3	179.5	183.0	189.2	192.7	203.9	214.1	225.6	239.5
Food	9.740	141.5	144.4	149.6	150.1	153.9	159.0	165.8	174.5	182.3	185.2
Direct purchase	4.930	135.2	137.6	142.5	140.0	142.5	145.9	152.4	159.2	164.8	164.8
Contract service	4.810	148.0	151.3	157.0	160.4	165.5	172.5	179.6	190.1	220.2	206.2
Fuel and other energy	4.270	201.3	206.1	212.8	212.5	195.9	194.8	196.9	204.2	222.1	223.8
Electricity	1.210	168.1	173.5	184.6	191.1	193.8	193.0	195.6	201.1	205.8	213.7
Natural gas	0.910	207.6	242.3	244.0	242.4	230.6	220.0	218.7	224.8	225.1	228.0
Fuel oil and coal	1.660	235.4	221.1	226.0	218.2	177.1	177.5	178.2	185.7	223.5	215.2
Water and sewerage maintenance	0.490	155.7	168.7	179.7	190.5	200.7	211.4	223.0	236.5	252.3	270.7
All other	15.370	162.2	169.2	178.2	186.7	194.3	203.5	213.5	225.5	238.9	251.0
Drugs	1.500	152.2	168.4	183.9	200.8	218.5	238.3	257.1	280.5	305.4	330.5
Supplies	3.280	159.3	164.3	171.5	177.5	181.0	187.6	195.3	204.6	215.7	224.8
Health services	1.210	158.8	171.1	183.0	193.7	207.7	223.0	239.0	256.5	275.0	291.4
Other business services	4.590	171.6	177.6	186.9	196.4	206.3	215.0	224.8	235.9	248.4	260.4
Miscellaneous	4.790	159.3	164.3	171.5	177.5	181.0	187.6	195.3	204.6	215.7	224.8

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1991).

NOTE: All data are historical.

SOURCES: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1992 forecasts are made by Data Resources, Inc./McGraw-Hill.

Table 12. Calendar year percent change in the home health agency input price index, by expense category: 1983-91.

Expense category1	Base year weights 1976	Calendar year
		1983	1984	1985	1986	1987	1988	1989	1990	1991
Total	100.000	6.5	5.1	4.6	3.3	4.5	6.1	6.2	5.3	5.6
Wages and salaries	65.140	7.4	5.3	5.2	4.0	5.1	6.8	6.7	5.2	6.0
Employee benefits	7.900	6.2	4.2	1.9	3.4	1.8	5.9	5.0	5.4	6.2
Transportation	4.870	2.4	4.4	2.6	−3.9	3.0	3.1	5.0	5.6	2.8
Office costs	2.790	3.5	5.3	5.1	5.1	4.2	4.6	4.9	5.3	4.8
Rent	1.350	5.8	5.2	6.1	5.8	4.1	3.8	3.9	4.2	3.5
Energy and utilities	1.170	2.4	3.2	−0.2	−7.9	−0.5	1.1	3.8	8.9	0.8
Medical and nursing supplies and equipment	2.810	6.2	4.6	4.4	4.9	4.0	3.6	5.8	5.3	5.0
Contract services	6.870	6.5	5.1	4.6	3.3	4.5	6.1	6.2	5.3	5.6
Miscellaneous	7.100	3.2	4.4	3.5	1.9	3.7	4.1	4.8	5.4	4.2

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1991).

NOTE: All data are historical.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1992 forecasts are made by Data Resources, Inc./McGraw-Hill.

Table 13. Calendar year index levels in the home health agency input price index, by expense category: 1982-91.

Expense category1	Base year weights 1976	Calendar year
		1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
Total	100.000	174.4	185.7	195.0	204.0	210.7	220.3	233.7	248.2	261.2	276.0
Wages and salaries	65.140	173.8	186.8	196.7	207.0	215.2	226.3	241.7	257.9	271.2	287.6
Employee benefits	7.900	180.3	191.5	199.5	203.4	210.2	214.1	226.7	238.0	250.8	266.2
Transportation	4.870	176.1	180.3	188.3	193.3	185.8	191.4	197.3	207.2	218.8	224.8
Office costs	2.790	184.7	191.2	201.3	211.5	222.2	231.5	242.0	254.0	267.5	280.4
Rent	1.350	154.8	163.7	172.2	182.8	193.4	201.5	209.1	217.2	226.4	234.4
Energy and utilities	1.170	226.6	232.1	239.5	239.0	220.2	219.1	221.5	229.8	250.3	252.2
Medical and nursing supplies and equipment	2.810	156.2	166.0	173.7	181.2	190.0	197.6	204.8	216.7	228.1	239.6
Contract services	6.870	174.3	185.7	195.0	204.0	210.8	220.3	233.7	248.2	261.3	276.0
Miscellaneous	7.100	169.6	174.9	182.6	189.0	192.7	199.7	207.9	217.9	229.6	239.3

¹For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1991).

NOTE: All data are historical.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1992 forecasts were made by Data Resources, Inc./McGraw-Hill.

Data highlight

The PPS input price index has been revised, and a new base year of 1987 has been selected (Tables 8 and 9). Effective October 1, 1990, the new PPS input price index was used to set the fiscal year 1991 market basket value for the update of the prospective payment rates. This revision also included changes in certain variables used for price proxies. Periodically, the various input price indexes are revised so that the cost weights will reflect changes in the mix of goods and services that providers purchase.

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 6 present national indicators of output, employment, and inflation.

Table 14. Selected national economic indicators: 1982-91.

Indicator	Calendar year										1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991
Gross national product
Billions of dollars	$3,180	$3,434	$3,801	$4,054	$4,278	$4,545	$4,908	$5,248	$5,525	$5,686	$5,612	$5,661	$5,720	$5,751
Billions of 1987 dollars	$3,796	$3,940	$4,174	$4,295	$4,414	$4,545	$4,726	$4,841	$4,895	$4,860	$4,844	$4,848	$4,872	$4,877
Implicit price deflator (1987 = 100.0)	83.8	87.2	91.1	94.4	96.9	100.0	103.8	108.4	112.9	117.0	115.9	116.8	117.4	117.9
Employment, hours, and earnings
Unemployment rate, all workers	9.7	9.6	7.5	7.2	7.0	6.2	5.5	5.3	5.5	6.8	6.5	6.8	6.8	7.0
Private non-agricultural workers:
Total employment in thousands	73,729	74,330	78,472	81,125	82,832	85,190	88,150	90,550	91,649	90,548	89,408	90,537	91,273	90,975
Average weekly hours	34.8	35.0	35.2	34.9	34.7	34.8	34.7	34.6	34.5	34.3	33.9	34.3	34.6	34.5
Average hourly earnings	$7.68	$8.02	$8.31	$8.57	$8.76	$8.98	$9.28	$9.65	$10.01	$10.34	$10.23	$10.31	$10.36	$10.47
Health services workers:
Total employment in thousands	5,812	5,988	6,122	6,299	6,536	6,805	7,121	7,484	7,844	8,237	8,072	8,178	8,305	8,392
Average weekly hours	33.0	32.6	32.5	32.5	32.4	32.4	32.4	32.5	32.5	32.5	32.4	32.5	32.7	32.6
Average hourly earnings	$6.92	$7.39	$7.71	$8.06	$8.35	$8.69	$9.21	$9.82	$10.41	$10.96	$10.74	$10.91	$11.05	$11.15
Personal income and savings
Income in billions	$2,691	$2,863	$3,155	$3,380	$3,590	$3,802	$4,076	$4,380	$4,680	$4,834	$4,768	$4,821	$4,853	$4,895
Disposable income in billions	$2,320	$2,494	$2,760	$2,943	$3,131	$3,290	$3,548	$3,789	$4,059	$4,218	$4,151	$4,207	$4,238	$4,277
Savings in billions	$199	$169	$222	$189	$187	$142	$156	$166	$206	$219	$213	$229	$212	$223
Personal savings rate	8.6	6.8	8.0	6.4	6.0	4.3	4.4	4.4	5.1	5.2	5.1	5.4	5.0	5.2
Prices1
Gross national product fixed-weight price index (1987 = 100.0)	84.9	88.2	91.1	94.4	97.0	100.0	103.9	108.4	113.1	117.6	116.3	117.3	118.0	118.7
Consumer Price Index, all items	96.5	99.6	103.9	107.6	109.6	113.6	118.3	124.0	130.7	136.2	134.8	135.6	136.7	137.7
All items less medical care	96.8	99.6	103.7	107.2	108.8	112.6	117.0	122.4	128.8	133.8	132.6	133.3	134.3	135.1
Apparel and upkeep	97.8	100.2	102.0	105.0	105.9	110.6	115.4	118.6	124.1	128.7	126.3	128.8	128.0	131.7
Energy	99.1	99.9	100.9	101.6	88.2	88.6	89.2	94.3	102.1	102.4	103.2	101.7	103.1	101.8
Food and beverages	97.3	99.5	103.2	105.6	109.1	113.5	118.2	124.9	132.1	136.8	136.1	137.4	136.8	136.9
Housing: shelter	96.9	99.1	104.0	109.8	115.8	121.2	127.1	132.8	140.0	146.3	144.6	145.4	147.2	147.9
Medical care	92.5	100.6	106.9	113.5	122.0	130.1	138.6	149.2	162.8	177.0	172.4	175.3	178.7	181.7
Producer Price Index,2 finished consumer goods	100.0	101.3	103.3	103.9	101.4	103.6	106.2	112.1	118.2	120.5	120.4	120.4	120.3	120.7

¹Base period = 1982-84, unless noted.

²Formerly 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 Jan. 1982-Feb. 1992; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for Jan. 1982-Dec. 1991.

Table 15. Percent change in selected national economic indicators: 1982-91.

Indicator	Calendar year									1991 Q1	1991 Q2	1991 Q3	1991 Q4
	1983	1984	1985	1986	1987	1988	1989	1990	1991
	Annual percent change									Percent change from same period of previous year
Gross national product
Billions of dollars	8.0	10.7	6.6	5.5	6.2	8.0	6.9	5.3	2.9	3.3	2.8	2.6	3.0
Billions of 1987 dollars	3.8	6.0	2.9	2.8	3.0	4.0	2.4	1.1	−0.7	−1.0	−1.1	−0.8	−0.0
Implicit price deflator	4.1	4.5	3.6	2.7	3.2	3.9	4.4	4.1	3.6	4.3	3.9	3.4	3.0
Employment, hours, and earnings
Unemployment rate, all workers1	−0.1	−2.1	−0.3	−0.2	−0.8	−0.7	−0.2	0.3	1.2	1.2	1.5	1.2	1.0
Private non-agricultural workers:
Total employment	0.8	5.6	3.4	2.1	2.8	3.5	2.7	1.2	−1.2	−0.9	−1.5	−1.4	−1.0
Average weekly hours	0.5	0.6	−0.8	−0.5	0.0	−0.2	−0.3	−0.3	−0.5	−1.0	−0.6	−0.6	0.1
Average hourly earnings	4.4	3.7	3.0	2.3	2.5	3.4	4.0	3.7	3.2	3.4	3.4	3.2	3.0
Health services workers:
Total employment	3.0	2.2	2.9	3.8	4.1	4.6	5.1	4.8	5.0	5.2	4.9	5.0	5.0
Average weekly hours	−1.1	−0.4	0.0	−0.3	−0.1	0.2	0.1	0.3	−0.0	−0.1	0.2	−0.3	0.1
Average hourly earnings	6.7	4.4	4.5	3.6	4.2	5.9	6.7	5.9	5.3	4.9	5.8	5.6	5.1
Personal income and savings
Income	6.4	10.2	7.1	6.2	5.9	7.2	7.5	6.8	3.3	4.1	3.6	2.8	2.7
Disposable income	7.5	10.7	6.6	6.4	5.0	7.9	6.8	7.1	3.9	4.5	4.4	3.6	3.4
Savings	−15.4	31.6	−14.7	−1.0	−24.3	9.6	6.7	23.9	6.6	8.2	6.0	8.6	3.9
Personal savings rate1	−1.8	1.3	−1.6	−0.5	−1.7	0.1	0.0	0.7	0.1	0.2	0.0	0.2	0.0
Prices2
Gross national product fixed-weight price index (1987 = 100.0)	3.9	3.3	3.6	2.8	3.1	3.9	4.3	4.3	3.9	4.5	4.1	3.6	3.4
Consumer Price Index, all items	3.2	4.3	3.5	1.9	3.7	4.1	4.8	5.4	4.2	5.3	4.8	3.9	3.0
All items less medical care	2.9	4.1	3.4	1.6	3.5	3.9	4.6	5.2	3.9	5.0	4.6	3.6	2.6
Apparel and upkeep	2.5	1.8	2.9	0.8	4.4	4.3	2.8	4.6	3.7	4.5	2.9	3.9	3.7
Energy	0.8	1.0	0.7	−13.2	0.4	0.8	5.7	8.2	0.4	6.9	4.5	−0.7	−8.1
Food and beverages	2.2	3.8	2.3	3.3	4.1	4.1	5.7	5.8	3.6	4.1	4.7	3.1	2.4
Housing: shelter	2.3	4.9	5.6	5.5	4.7	4.8	4.5	5.4	4.5	5.6	4.9	3.7	3.8
Medical care	8.7	6.2	6.2	7.5	6.6	6.5	7.7	9.1	8.7	9.6	9.0	8.5	8.0
Producer Price Index,3 finished consumer goods	1.3	2.0	0.5	−2.4	2.1	2.5	5.6	5.5	1.9	3.5	3.5	1.7	−1.1

¹Change in rate, rather than percent change.

²Base period = 1982-84, unless noted.

³Formerly 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 Jan. 1982-Feb. 1992; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for Jan. 1982-Dec. 1991.

Figure 6. Percent change in indicators of national economic activity from the same period of previous year: 1983-91.

Statistics on the gross national product (GNP) were revised at the end of 1991. These revisions increased the size of GNP in 1990 by 1 percent. The revised GNP produced only a negligible affect on the ratio of GNP devoted to health care between 1960 and 1990 (Table 16). Concurrent with these revisions, the U.S. Department of Commerce's Bureau of Economic Analysis, the Federal agency that prepares GNP estimates, shifted emphasis from GNP to the concept of gross domestic product (GDP). The GDP differs from GNP primarily by the addition of the amount of “receipts by U.S. residents of interest and dividends and reinvested earnings of foreign affiliates of U.S. corporations” less “payments to foreign residents of interest and dividends and reinvested earnings of U.S. affiliates of foreign corporations” (U.S. Department of Commerce, 1992). In recent years, these receipts and payments have largely offset each other, resulting in level differences between GNP and GDP of less than 0.2 percent in 1991.

Table 16. National health expenditures as a share of gross national and gross domestic product: 1960-90.

Year	Gross national product		Gross domestic product1
	Unrevised	Revised1
1960	5.3	5.2	5.3
1961	5.4	5.4	5.5
1962	5.5	5.5	5.5
1963	5.7	5.7	5.7
1964	5.8	5.8	5.9
1965	5.9	5.9	5.9
1966	5.9	5.9	6.0
1967	6.3	6.3	6.3
1968	6.6	6.5	6.6
1969	6.8	6.8	6.8
1970	7.3	7.3	7.4
1971	7.5	7.4	7.5
1972	7.6	7.6	7.6
1973	7.5	7.5	7.6
1974	7.9	7.9	8.0
1975	8.3	8.3	8.4
1976	8.5	8.5	8.6
1977	8.6	8.6	8.7
1978	8.6	8.6	8.7
1979	8.7	8.6	8.7
1980	9.2	9.1	9.2
1981	9.5	9.5	9.6
1982	10.3	10.3	10.4
1983	10.5	10.4	10.5
1984	10.3	10.2	10.3
1985	10.5	10.4	10.5
1986	10.7	10.6	10.7
1087	10.9	10.9	10.9
1988	11.2	11.1	11.1
1989	11.6	11.5	11.5
1990	12.2	12.1	12.1

¹Revised in December 1991.

SOURCES: (Levit et al., 1991); U.S. Department of Commerce, Bureau of Economic Analysis: Survey of Current Business. Washington. U.S. Government Printing Office; and Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis.

Traditionally, NHE has been compared to GNP. There are several reasons for converting to the use of GDP in measuring the share of resources devoted to health care. First, 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. GNP measures the output of U.S. citizens and companies, regardless of the geographic area in which that production occurred. The basis on which NHE is calculated closely parallels that of GDP in that services are measured based on the location where the service is produced. Second, the use of a GDP measure is more closely comparable to other measures of domestic economic activity such as employment and productivity. These measures are used in estimating and analyzing NHE components. Third, in many other countries, more significant differences exist between GNP and GDP levels than those that occur in the United States (Office of the President, 1992). Health spending as a share of GDP has been adopted internationally as a measure of domestic health care resource allocation. Calculating consistent measures across countries will reduce the confusion that occurs in discussing resource allocation for health care among countries.

Table 16 compares the NHE calculated both as a share of GDP and GNP. In any single year between 1960 and 1990, use of GDP in the calculation changes the share of economic resources devoted to health care by 0.1 percent or less.

Predicting health spending using indicators

Indicators can be used to predict the share of GDP or GNP allocated to health care prior to the availability of more complete health expenditure information. Statistics presented in Tables 1-13 can be used to estimate a range of expected growth in health care expenditures for five major components of NHE. These five categories of expenditures—hospital services, physicians' services, dental services, non-durable medical products, and nursing home care—have comprised 78 to 80 percent of NHE during the last decade.

For example, the AHA Panel Survey reports growth in operating expenses (Table 2) and revenues for community hospitals that was slower by 1.2 and 0.6 percentage points respectively in 1991 than in 1990, suggesting that growth in hospital expenditures in 1991 will decelerate. For physician and dental services, the product of growth in BLS reported work-hours (Table 5) and CPIs (Table 7) indicate that growth in physician expenditures is expected to decelerate slightly while growth in dental expenditures will accelerate slightly when compared with 1990 expenditure growth rates. For non-durable medical products, expenditure growth in the historical period closely parallels that of CPIs for prescription drugs (Table 7). Price growth in this CPI component for 1991 is almost identical to that recorded for 1990. For the nursing home sector, the product of growth in BLS work-hours of employees in nursing and personal care facilities (Table 5) and in the skilled nursing facility input price index (Table 10) produce an indicator that tracks closely with expenditure growth. This indicator predicts a slight deceleration in nursing home expenditures in 1991.

Predicted growth rates in these major sectors can be applied to specific 1990 NHE sector expenditures to produce rough estimates of spending for 1991. During the past decade, the proportion of NHE that these major sectors occupy has been stable, falling only gradually from 80 percent in 1980 to 78 percent in 1990. Using historical trends, we can estimate a similar proportion for 1991. Total NHE can then be roughly calculated by dividing the major sectors' expenditures by the estimated 1991 proportion spent on health.

Given these estimates, NHE is expected to increase up from 12.1 percent in 1990 (Table 16) to 12.9-13.1 percent of the GDP. This jump in the share of national resources devoted to health care will rival the increase this ratio experienced in 1982 when it grew 0.9 percent. As in 1982, this increase results from continued deceleration in GDP growth because of a recession, rather than from acceleration in growth in NHE.

Overall, we anticipate no dramatic changes in rates of growth of health expenditures for 1991 when compared with 1990. This assessment is based on indicators presented in Tables 1-13. In 1990, health care expenditures increased 10.5 percent from the previous year. For 1991, we estimate that NHE growth will be similar to that recorded in 1990, approximately 10 to 11 percent. The continued deceleration of economic growth in the Nation's economy in 1991 meant that more and more the Nation's resources were funneled into this sector.