Health Care Indicators

Abstract

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 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 an early indication of changes occurring within the general economy and in the health care sector.

The accompanying tables report selected quarterly statistics for 1993 and the calendar year aggregation of quarterly information for the past 3 to 10 years. Additional tables show the 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. We will discuss recent developments in the annual and quarterly indicators data. Finally, we will describe how the indicators can be used to predict trends in health care expenditures and the share of national economic activity that is committed to health care purchases.

Community Hospital Statistics

Since 1963, the American Hospital Association (AHA), in cooperation with member hospitals, has been collecting data on the operation of community hospitals through its National Hospital Panel Survey. Community hospitals, which comprised more than 80 percent of all hospital facilities in the United States in 1993, 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 since 1984 and quarterly for selected 1993. Figures 1 and 2 show annual change in various measures of hospital utilization for 1984-93.

Table 1. Selected Community Hospital Statistics: 1984-93.

Item	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
Operating Expenses
Total in Millions	$126,028	$134,043	$146,032	$161,322	$177,770	$195,378	$217,113	$238,633	$260,994	$278,880	$68,527	$69,245	$70,002	$71,106
Labor in Millions	71,381	74,715	80,169	87,533	96,415	106,019	117,828	128,704	140,112	149,733	36,782	37,250	37,578	38,123
Non-Labor in Millions	54,646	59,328	65,862	73,790	81,355	89,359	99,286	109,929	120,882	129,147	31,746	31,994	32,424	32,983
Inpatient Expense in Millions	107,005	111,416	119,286	129,824	140,482	152,147	165,792	178,401	191,401	202,055	50,447	50,085	50,274	51,229
Amount per Patient Day	443	493	535	581	632	690	765	844	927	1,000	948	999	1,024	1,033
Amount per Admission	2,947	3,226	3,527	3,860	4,194	4,586	5,021	5,461	5,905	6,188	6,041	6,194	6,220	6,299
Utilization
Admissions in Thousands	36,305	34,535	33,825	33,634	33,496	33,176	33,017	32,670	32,411	32,652	8,351	8,086	8,083	8,133
Inpatient Days in Thousands	241,780	226,129	222,904	223,441	222,313	220,361	216,836	211,475	206,440	202,078	53,228	50,150	49,089	49,611
Adult Length of Stay in Days	6.7	6.5	6.6	6.6	6.6	6.6	6.6	6.5	6.4	6.2	6.4	6.2	6.1	6.1
Surgical Operations in Thousands	19,926	20,009	20,443	21,038	21,252	21,383	21,904	21,983	22,463	22,710	5,646	5,721	5,677	5,665
Outpatient Visits in Thousands	232,832	243,381	263,631	278,917	296,111	308,086	326,498	344,116	366,243	390,188	94,677	97,637	99,212	98,662
Beds in Thousands	993	975	963	954	942	930	921	912	908	902	905	904	901	897
Adult Occupancy Rate1	66.6	63.6	63.4	64.1	64.5	64.9	64.5	63.5	62.1	61.4	65.3	61.0	59.2	60.1
Full-Time Equivalent (FTE) Personnel
Total in Thousands	3,115	3,044	3,055	3,077	3,112	3,162	3,229	3,249	3,300	3,323	3,322	3,331	3,326	3,315
Number per Bed	3.1	3.1	3.2	3.2	3.3	3.4	3.5	3.6	3.6	3.7	3.7	3.7	3.7	3.7
Adjusted Patient Days2 per FTE	91	89	89	90	90	89	88	87	85	84	22	21	21	21
Adjusted Patient Days in Thousands	284,761	272,052	272,881	277,654	281,322	282,974	283,959	282,874	281,502	278,911	72,306	69,334	68,351	68,860

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.

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 January 1984-December 1993.

Table 2. Percent Change in Selected Community Hospital Statistics: 1984-93.

Item	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
	Annual Percent Change										Percent Change From the Same Period of Previous Year
Operating Expenses
Total	4.8	6.4	8.9	10.5	10.2	9.9	11.1	9.9	9.4	6.9	7.5	7.3	6.3	6.3
Labor	3.8	4.7	7.3	9.2	10.1	10.0	11.1	9.2	8.9	6.9	7.7	8.0	6.2	5.7
Non-Labor	6.2	8.6	11.0	12.0	10.3	9.8	11.1	10.7	10.0	6.8	7.3	6.5	6.5	7.0
Inpatient Expenses	3.5	4.1	7.1	8.8	8.2	8.3	9.0	7.6	7.3	5.6	6.2	5.9	5.0	5.1
Amount per Patient Day	13.3	11.3	8.6	8.6	8.8	9.3	10.7	10.3	9.9	7.8	8.2	8.4	7.8	7.0
Amount per Admission	7.5	9.5	9.3	9.5	8.7	9.3	9.5	8.8	8.1	4.8	6.3	6.1	4.0	2.7
Utilization
Admissions	-3.7	-4.9	-2.1	-0.6	-0.4	-1.0	-0.5	-1.1	-0.8	0.7	-0.1	-0.2	1.0	2.3
Inpatient Days	-8.6	-6.5	-1.4	0.2	-0.5	-0.9	-1.6	-2.5	-2.4	-2.1	-1.9	-2.3	-2.6	-1.8
Adult Length of Stay	-5.1	-1.7	0.6	0.8	-0.1	0.1	-1.1	-1.4	-1.6	-2.8	-1.8	-2.1	-3.5	-4.0
Surgical Operations	0.7	0.4	2.2	2.9	1.0	0.6	2.4	0.4	2.2	1.1	0.7	1.4	0.8	1.5
Outpatient Visits	1.4	4.5	8.3	5.8	6.2	4.0	6.0	5.4	6.4	6.5	6.2	6.6	6.4	7.0
Beds	-1.1	-1.8	-1.2	-0.9	-1.3	-1.3	-0.9	-1.0	-0.5	-0.7	-0.4	-0.7	-0.8	-0.8
Adult Occupancy Rate1	-5.7	-3.0	-0.2	0.7	0.3	0.5	-0.4	-0.9	-1.4	-0.7	-0.2	-1.0	-1.1	-0.6
Full-Time Equivalent (FTE) Personnel
Total	-2.3	-2.3	0.3	0.7	1.1	1.6	2.1	0.6	1.6	0.7	1.4	1.3	0.5	-0.3
Number per Bed	-1.2	-0.5	1.5	1.6	2.4	3.0	3.1	1.7	2.0	1.4	1.8	2.0	1.2	0.5
Adjusted Patient Days per FTE	-5.3	-2.3	0.0	1.0	0.2	-1.0	-1.7	-1.0	-2.0	-1.6	-2.0	-2.2	-1.8	-0.4
Adjusted Patent Days	-7.4	-4.5	0.3	1.7	1.3	0.6	0.3	-0.4	-0.5	-0.9	-0.7	-1.0	-1.3	-0.7

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 January 1983-December 1993.

Figure 1. Percent Change in Total Operating Expenses and Inpatient Expense per Admission for the Same Period of Previous Year: 1984-93.

Figure 2. Percent Change in Admissions and Adult Length of Stay for the Same Period of Previous Year: 1984-93.

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.

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 one time. (Other surveys that are household-based, such as the Current Population Survey [CPS], also record employment. In the CPS, however, each person's employment status is counted only once, as either employed, unemployed, or not in the labor force.) Once each year, monthly establishment-based employment statistics are adjusted to benchmarks created from annual establishment census, information, resulting in revisions to previously published employment estimates.

Tables 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 annual changes in non-supervisory payrolls for 1984 to 1993.

Table 3. Employment, Hours, and Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1984-93.

Type of Establishment and Measure	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
Health Services (SIC 80)
Total Employment in Thousands	6,118.3	6,292.8	6,527.6	6,794.2	7,105.4	7,462.8	7,814.3	8,182.9	8,523.3	8,870.8	8,735.7	8,836.4	8,927.2	8,983.9
Non-Supervisory Workers:
Employment in Thousands	5,458.7	5,601.7	5,802.9	6,042.1	6,310.8	6,635.9	6,947.6	7,275.8	7,575.3	7,868.5	7,755.0	7,843.9	7,917.3	7,957.9
Average Weekly Hours	32.5	32.5	32.4	32.4	32.4	32.5	32.5	32.5	32.8	32.7	32.7	32.7	32.9	32.7
Average Hourly Earnings	$7.71	$8.06	$8.35	$8.69	$9.21	$9.82	$10.40	$10.96	$11.39	$11.77	$11.68	$11.70	$11.79	$11.91
Offices and Clinics of Medical Doctors (SIC 801)
Total Employment in Thousands	977.2	1,028.2	1,081.4	1,139.1	1,199.5	1,267.9	1,338.2	1,404.5	1,472.7	1,545.3	1,517.6	1,538.1	1,558.9	1,566.6
Non-Supervisory Workers:
Employment in Thousands	819.5	856.5	898.8	943.3	988.5	1,047.2	1,104.5	1,155.4	1,209.4	1,262.4	1,242.0	1,258.4	1,273.0	1,276.3
Average Weekly Hours	30.9	30.9	31.2	31.1	31.6	31.9	31.8	31.9	32.1	32.2	32.1	32.2	32.3	32.3
Average Hourly Earnings	$7.68	$8.01	$8.35	$8.61	$9.07	$9.78	$10.58	$11.13	$11.41	$11.88	$11.72	$11.85	$11.90	$12.05
Offices and Clinics of Dentists (SIC 802)
Total Employment in Thousands	425.3	439.4	457.7	469.6	483.5	499.8	512.9	527.6	541.9	562.6	552.3	560.0	565.9	572.4
Non-Supervisory Workers:
Employment in Thousands	377.5	391.4	404.0	414.0	423.6	437.4	449.7	463.5	474.3	492.3	483.5	489.8	495.3	500.5
Average Weekly Hours	28.8	28.6	28.0	28.3	28.5	28.5	28.4	28.3	28.3	28.3	28.1	28.4	28.2	28.3
Average Hourly Earnings	$7.42	$7.88	$8.27	$8.50	$8.82	$9.41	$10.14	$10.62	$11.01	$11.43	$11.25	$11.34	$11.45	$11.67
Nursing and Personal-Care Facilities (SIC 805)
Total Employment in Thousands	1,147.2	1,197.5	1,244.6	1,282.6	1,310.6	1,355.7	1,415.4	1,492.6	1,542.7	1,615.0	1,581.9	1,604.6	1,626.6	1,646.9
Non-Supervisory Workers:
Employment in Thousands	1,037.5	1,083.4	1,124.5	1,158.8	1,183.6	1,225.8	1,278.9	1,347.4	1,393.7	1,457.6	1,428.6	1,449.0	1,468.2	1,484.7
Average Weekly Hours	31.1	31.2	31.4	31.6	31.6	31.8	32.1	32.1	32.3	32.2	32.0	32.2	32.6	32.0
Average Hourly Earnings	$5.42	$5.61	$5.80	$6.00	$6.33	$6.80	$7.24	$7.56	$7.85	$8.15	$8.05	$8.09	$8.19	$8.28
Private Hospitals (SIC 806)
Total Employment in Thousands	3,003.6	2,996.8	3,037.3	3,142.1	3,293.8	3,438.4	3,548.7	3,655.1	3,759.8	3,816.4	3,805.5	3,815.4	3,827.2	3,817.5
Non-Supervisory Workers:
Employment in Thousands	2,742.8	2,731.7	2,767.6	2,866.1	3,009.6	3,145.4	3,248.4	3,352.5	3,451.4	3,498.1	3,491.8	3,499.6	3,506.8	3,494.4
Average Weekly Hours	34.1	34.3	34.2	34.1	34.0	34.0	34.2	34.2	34.4	34.6	34.5	34.5	34.6	34.6
Average Hourly Earnings	$8.55	$9.00	$9.36	$9.84	$10.51	$11.21	$11.79	$12.50	$13.03	$13.47	$13.38	$13.38	$13.50	$13.62
All Private Non-Agricultural Establishments
Total Employment in Thousands	78,384	80,992	82,651	84,948	87,824	90,117	91,115	89,854	89,866	91,336	89,217	91,297	92,335	92,495
Non-Supervisory Workers:
Employment in Thousands	63,339	65,475	66,866	68,771	71,106	73,034	73,800	72,650	72,866	74,353	72,357	74,316	75,285	75,452
Average Weekly Hours	35.2	34.9	34.7	34.8	34.7	34.6	34.5	34.3	34.4	34.5	34.0	34.5	34.8	34.6
Average Hourly Earnings	$8.31	$8.57	$8.76	$8.98	$9.28	$9.65	$10.01	$10.32	$10.57	$10.83	$10.78	$10.79	$10.81	$10.96
Employment in Thousands
All Hospitals	4,326.1	4,301.3	4,323.0	4,436.6	4,599.7	4,740.2	4,852.5	4,958.2	5,086.2	5,166.9	5,146.6	5,163.4	5,185.4	5,172.2
Private Hospitals (SIC 806)	3,003.6	2,996.8	3,037.3	3,142.1	3,293.8	3,438.4	3,548.7	3,655.1	3,759.8	3,816.4	3,805.5	3,815.4	3,827.2	3,817.5
Federal Hospitals	241.0	248.1	246.3	249.4	240.7	227.4	231.6	233.5	237.0	239.5	238.1	239.3	241.0	239.6
State Hospitals	458.8	448.4	438.1	438.7	446.2	442.4	426.2	416.7	419.8	417.3	418.2	417.6	417.7	415.4
Local Hospitals	622.8	607.9	601.3	606.4	619.0	632.0	646.1	652.9	669.7	693.7	684.7	691.0	699.4	699.6

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 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 1984-March 1994.

Table 4. Percent Change in Employment, Hours, and Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1984-93.

Type of Establishment and Measure	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
	Annual Percent Change										Percent Change From the Same Period of Previous Year
Health Services (SIC 80)
Total Employment	2.2	2.9	3.7	4.1	4.6	5.0	4.7	4.7	4.2	4.1	4.3	4.3	4.0	3.7
Non-Supervisory Workers:
Employment	1.5	2.6	3.6	4.1	4.4	5.2	4.7	4.7	4.1	3.9	4.2	4.1	3.8	3.4
Average Weekly Hours	-0.4	0.0	-0.3	-0.1	0.2	0.1	0.3	0.0	0.7	-0.1	-0.4	0.4	0.0	-0.2
Average Hourly Earnings	4.4	4.5	3.6	4.2	5.9	6.7	5.9	5.3	3.9	3.4	4.0	3.5	3.1	2.9
Offices and Clinics of Medical Doctors (SIC 801)
Total Employment	4.7	5.2	5.2	5.3	5.3	5.7	5.5	5.0	4.9	4.9	5.4	5.3	4.9	4.1
Non-Supervisory Workers:
Employment	3.8	4.5	4.9	5.0	4.8	5.9	5.5	4.6	4.7	4.4	4.9	4.8	4.4	3.5
Average Weekly Hours	-1.9	-0.1	1.0	-0.2	1.5	1.0	-0.4	0.4	0.7	0.2	-0.4	0.6	0.4	0.3
Average Hourly Earnings	3.6	4.4	4.2	3.2	5.3	7.9	8.1	5.3	2.5	4.1	4.4	4.7	3.8	3.4
Offices and Clinics of Dentists (SIC 802)
Total Employment	4.5	3.3	4.2	2.6	3.0	3.4	2.6	2.9	2.7	3.8	3.5	3.9	3.8	4.2
Non-Supervisory Workers:
Employment	5.0	3.7	3.2	2.5	2.3	3.3	2.8	3.1	2.3	3.8	3.4	3.8	3.8	4.0
Average Weekly Hours	2.5	-0.7	-1.9	1.0	0.6	-0.1	-0.2	-0.4	0.2	-0.3	-1.3	0.7	-0.4	-0.1
Average Hourly Earnings	4.1	6.2	5.0	2.8	3.9	6.6	7.8	4.7	3.7	3.8	3.1	3.4	4.2	4.3
Nursing and Personal Care Facilities (SIC 805)
Total Employment	3.7	4.4	3.9	3.0	2.2	3.4	4.4	5.5	3.4	4.7	4.2	4.8	4.8	5.0
Non-Supervisory Workers:
Employment	3.6	4.4	3.8	3.1	2.1	3.6	4.3	5.4	3.4	4.6	4.2	4.8	4.6	4.7
Average Weekly Hours	-0.7	0.2	0.7	0.5	0.0	0.9	0.9	0.1	0.5	-0.4	-0.7	0.4	-0.4	-0.9
Average Hourly Earnings	4.2	3.4	3.4	3.5	5.4	7.4	6.5	4.4	3.9	3.8	3.8	3.6	3.7	4.1
Private Hospitals (SIC 806)
Total Employment	-1.1	-0.2	1.4	3.4	4.8	4.4	3.2	3.0	2.9	1.5	2.3	1.8	1.2	0.7
Non-Supervisory Workers:
Employment	-1.5	-0.4	1.3	3.6	5.0	4.5	3.3	3.2	2.9	1.4	2.2	1.8	1.1	0.4
Average Weekly Hours	0.1	0.5	-0.3	-0.3	-0.5	0.0	0.7	0.0	0.6	0.4	0.4	0.5	0.5	0.4
Average Hourly Earnings	5.3	5.2	4.0	5.1	6.8	6.7	5.2	6.0	4.2	3.4	4.2	3.7	2.9	2.7
All Private Non-Agricultural Establishments
Total Employment	5.5	3.3	2.0	2.8	3.4	2.6	1.1	-1.4	0.0	1.6	1.3	1.5	1.8	2.0
Non-Supervisory Workers:
Employment	5.5	3.4	2.1	2.8	3.4	2.7	1.0	-1.6	0.3	2.0	1.7	1.9	2.2	2.3
Average Weekly Hours	0.6	-0.8	-0.5	0.0	-0.2	-0.3	-0.3	-0.6	0.2	0.3	-0.1	0.4	0.6	0.4
Average Hourly Earnings	3.7	3.0	2.3	2.5	3.4	4.0	3.7	3.1	2.5	2.5	2.6	2.5	2.3	2.4
Employment
All Hospitals	-1.4	-0.6	0.5	2.6	3.7	3.1	2.4	2.2	2.6	1.6	2.2	1.9	1.4	0.8
Private Hospitals (SIC 806)	-1.1	-0.2	1.4	3.4	4.8	4.4	3.2	3.0	2.9	1.5	2.3	1.8	1.2	0.7
Federal Hospitals	1.4	3.0	-0.7	1.2	-3.5	-5.5	1.9	0.8	1.5	1.1	0.9	1.1	1.5	0.8
State Hospitals	-2.6	-2.2	-2.3	0.1	1.7	-0.9	-3.7	-2.2	0.7	-0.6	-0.4	-0.6	-0.6	-0.9
Local Hospitals	-3.2	-2.4	-1.1	0.9	2.1	2.1	2.2	1.1	2.6	3.6	3.9	3.9	3.6	2.9

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 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 1984-March 1994.

Figure 3. Percent Change for Total Employment From the Same Period of Previous Year: 1984-93.

Table 5. Percent Change in Implied Non-Supervisory Payrolls and Work Hours in Private¹ Health Service Establishments, by Selected Type of Establishment: 1984-93.

Type of Establishment	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
	Annual Percent Change										Percent Change From the Same Period of Previous Year
Private Health Service Establishments (SIC 80)
Payrolls	5.5	7.2	7.0	8.4	10.8	12.3	11.2	10.3	8.9	7.3	7.9	8.3	7.0	6.2
Work Hours	1.1	2.6	3.3	4.0	4.6	5.3	5.0	4.7	4.8	3.8	3.7	4.6	3.8	3.2
Offices and Clinics of Medical Doctors (SIC 801)
Payrolls	5.5	8.9	10.4	8.0	11.9	15.4	13.6	10.6	8.1	8.9	9.1	10.4	8.8	7.4
Work Hours	1.8	4.4	6.0	4.7	6.3	7.0	5.1	5.1	5.4	4.6	4.5	5.5	4.8	3.8
Offices and Clinics of Dentists (SIC 802)
Payrolls	12.0	9.3	6.3	6.4	6.9	10.0	10.6	7.5	6.4	7.4	5.3	8.1	7.7	8.4
Work Hours	7.6	2.9	1.3	3.5	3.0	3.2	2.6	2.6	2.5	3.5	2.1	4.6	3.4	3.9
Nursing and Personal Care Facilities (SIC 805)
Payrolls	7.2	8.2	8.1	7.2	7.7	12.2	12.1	10.1	8.0	8.1	7.4	9.0	8.0	8.0
Work Hours	2.8	4.6	4.5	3.6	2.2	4.5	5.2	5.5	4.0	4.2	3.5	5.2	4.2	3.7
Private Hospitals (SIC 806)
Payrolls	3.9	5.4	5.1	8.6	11.6	11.6	9.4	9.4	7.9	5.2	6.9	6.0	4.5	3.5
Work Hours	-1.4	0.1	1.0	3.3	4.5	4.6	4.0	3.2	3.5	1.8	2.6	2.3	1.5	0.8
All Private Non-Agricultural Establishments
Payrolls	10.0	5.7	4.0	5.4	6.7	6.5	4.5	0.9	3.0	4.9	4.3	4.9	5.1	5.2
Work Hours	6.1	2.6	1.7	2.9	3.2	2.4	0.8	-2.1	0.5	2.4	1.6	2.3	2.8	2.7

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 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 1983-March 1994.

Figure 4. Percent Change for Non-Supervisory Payrolls From the Same Period of Previous Year: 1984-93.

Prices

Consumer Prices

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), which 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: 1984-93.

Item	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
All Items	103.9	107.6	109.6	113.6	118.3	124.0	130.7	136.2	140.3	144.5	143.1	144.2	144.8	145.8
All Items Less Medical Care	103.7	107.2	108.8	112.6	117.0	122.4	128.8	133.8	137.5	141.2	140.0	141.0	141.5	142.4
Apparel and Upkeep	102.0	105.0	105.9	110.6	115.4	118.6	124.1	128.7	131.9	133.7	133.1	134.6	132.0	135.0
Energy	100.9	101.6	88.2	88.6	89.2	94.3	102.1	102.4	103.0	104.1	102.7	104.7	105.4	103.8
Food and Beverages	103.2	105.6	109.1	113.5	118.2	124.9	132.1	136.8	138.7	141.6	140.7	141.4	141.5	142.7
Housing: Shelter	104.0	109.8	115.8	121.2	127.1	132.8	140.0	146.3	151.2	155.7	154.3	155.2	156.6	156.9
Medical Care	106.9	113.5	122.0	130.1	138.6	149.2	162.8	177.0	190.1	201.4	197.7	200.3	202.8	204.8
Medical Care Services1	106.7	113.2	121.9	129.9	138.3	148.9	162.7	177.1	190.5	202.9	198.8	201.8	204.4	206.7
Professional Services	107.0	113.6	120.8	128.8	137.5	146.4	156.1	165.7	175.8	184.6	181.6	184.1	185.9	187.1
Physicians' Services	107.0	113.3	121.5	130.4	139.8	150.0	160.8	170.5	181.2	191.3	187.7	190.5	192.7	194.2
Dental Services	107.5	114.2	120.6	128.8	137.5	146.0	155.8	167.4	178.7	188.1	184.8	187.6	189.2	190.8
Hospital and Related Services	109.2	116.1	123.1	131.6	143.9	160.5	178.0	196.1	214.0	231.9	226.2	230.0	233.8	237.7
Hospital Room	109.0	115.4	122.3	131.1	143.3	158.1	175.4	191.9	208.7	226.4	220.6	224.6	228.2	232.0
Other Inpatient Services2	NA	NA	NA	103.9	114.0	128.9	142.7	158.0	172.3	185.6	181.1	183.9	187.2	190.4
Outpatient Services2	NA	NA	NA	103.3	112.5	124.7	138.7	153.4	168.7	184.3	179.9	183.0	185.6	188.7
Medical Care Commodities	107.5	115.2	122.7	130.9	139.9	150.8	163.4	176.8	188.0	195.0	193.0	194.2	196.0	196.7
Prescription Drugs	109.7	120.1	130.4	140.8	152.0	165.2	181.7	199.7	214.7	223.0	221.4	221.6	223.9	225.2
Non-Prescription Drugs and Medical Supplies2	NA	NA	NA	103.1	108.1	114.6	120.6	126.2	131.2	135.5	133.2	135.6	136.7	136.5
Internal and Respiratory Over-the-Counter Drugs	106.4	112.2	117.7	123.9	130.8	138.7	145.9	152.4	158.2	163.5	160.4	163.4	165.3	164.9
Non-Prescription Medical Equipment and Supplies	105.1	109.6	115.0	119.6	123.9	131.1	138.0	145.0	150.9	155.9	153.8	156.4	156.5	156.7

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 January 1984-December 1993.

Table 7. Percent Change in Selected Items of the Consumer Price Index for All Urban Consumers: 1984-93.

Item	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
All Items	4.3	3.5	1.9	3.7	4.1	4.8	5.4	4.2	3.0	3.0	3.2	3.1	2.7	2.7
All Items Less Medical Care	4.1	3.4	1.6	3.4	3.9	4.6	5.2	3.9	2.7	2.7	2.9	2.9	2.5	2.5
Apparel and Upkeep	1.8	2.9	0.8	4.4	4.3	2.8	4.6	3.7	2.5	1.4	2.0	1.6	0.8	1.0
Energy	1.0	0.7	-13.2	0.4	0.8	5.7	8.2	0.4	0.5	1.1	3.4	2.0	-0.3	-0.4
Food and Beverages	3.8	2.3	3.3	4.1	4.1	5.7	5.8	3.6	1.4	2.1	1.8	2.1	2.0	2.5
Housing: Shelter	4.9	5.6	5.5	4.7	4.8	4.5	5.4	4.5	3.4	3.0	3.0	3.1	3.0	2.9
Medical Care	6.2	6.2	7.5	6.6	6.5	7.7	9.1	8.7	7.4	6.0	6.3	6.1	5.9	5.5
Medical Care Services1	6.0	6.0	7.7	6.6	6.5	7.6	9.3	8.9	7.6	6.5	6.8	6.8	6.4	6.0
Professional Services	7.1	6.2	6.4	6.6	6.7	6.4	6.6	6.2	6.1	5.1	5.4	5.3	5.0	4.5
Physicians' Services	7.0	5.8	7.2	7.4	7.2	7.3	7.2	6.0	6.3	5.6	5.9	5.7	5.6	5.2
Dental Services	8.1	6.3	5.6	6.7	6.8	6.2	6.7	7.5	6.7	5.3	5.8	6.0	4.9	4.5
Hospital and Related Services	8.6	6.3	6.0	6.9	9.3	11.5	10.9	10.2	9.1	8.4	8.7	8.8	8.3	7.8
Hospital Room	8.3	5.9	6.0	7.2	9.2	10.3	10.9	9.4	8.8	8.5	8.8	9.0	8.4	7.8
Other Inpatient Services	NA	NA	NA	NA	9.7	13.1	10.7	10.7	9.1	7.8	7.8	8.0	7.6	7.6
Outpatient Services	NA	NA	NA	NA	8.9	10.9	11.2	10.6	10.0	9.3	10.1	10.0	9.1	8.0
Medical Care Commodities	7.3	7.1	6.6	6.7	6.9	7.8	8.4	8.2	6.4	3.7	4.3	3.4	3.7	3.3
Prescription Drugs	9.6	9.5	8.6	8.0	7.9	8.7	10.0	9.9	7.6	3.9	5.0	3.3	3.8	3.3
Non-Prescription Drugs and Medical Supplies	NA	NA	NA	NA	4.9	6.0	5.2	4.7	3.9	3.3	3.0	3.5	3.4	3.3
Internal and Respiratory Over-the-Counter Drugs	6.2	5.4	4.9	5.3	5.5	6.1	5.2	4.5	3.8	3.3	3.3	3.2	3.4	3.5
Non-Prescription Medical Equipment and Supplies	4.6	4.4	4.9	4.0	3.6	5.8	5.3	5.0	4.1	3.3	2.4	4.0	3.5	3.1

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 January 1983-December 1993.

Figure 5. 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 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 hospital and related services (adjusted by 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 calendar year. The percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider.

The input price indexes are estimated on a historical basis and forecasted out several years. The HCFA-chosen price proxies are forecasted under contract with Data Resources, Inc./McGraw Hill (DRI). Following every calendar year quarter, in March, June, September, and December, DRI updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions. Some of the data in Tables 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. Calendar Year Percent Change for Four-Quarter Moving Averages in the Prospective Payment System Hospital Input Price Index, by Expense Category: 1989-95.

Expense Category1	Base Year Weights 19872	Calendar Year
		1989	1990	1991	1992	1993	1994	1995
Total	100.000	5.4	4.9	3.7	3.1	2.9	3.0	3.7
Compensation	61.709	5.2	5.5	4.7	3.9	3.5	3.5	3.9
Wages and Salaries	52.212	4.9	5.0	4.3	3.4	3.1	3.2	3.5
Employee Benefits	9.497	6.9	7.9	6.6	6.2	5.3	5.0	5.8
Other Professional Fees	1.649	4.6	4.8	4.3	3.9	3.3	3.2	3.5
Energy and Utilities	2.376	8.5	10.6	-1.9	-0.9	-0.2	-3.3	3.8
Fuel Oil, Coal, and Other Fuel	0.625	17.9	25.9	-11.3	-5.5	-2.9	-9.1	7.5
Electricity	1.143	3.2	3.0	7.1	1.2	1.0	-2.8	1.8
Natural Gas	0.343	6.0	-2.0	-1.6	2.0	4.9	4.1	1.2
Motor Gasoline	0.229	13.5	21.0	-11.2	-2.6	-6.0	-2.2	8.3
Water and Sewerage Maintenance	0.036	6.1	6.7	7.3	6.8	5.4	5.4	5.5
Professional Liability	1.433	0.6	-0.1	1.3	3.3	3.0	3.5	5.5
All Other	32.839	5.8	3.6	2.4	1.7	1.8	2.5	3.2
Other Products	21.788	6.1	3.3	1.9	1.4	1.7	2.0	3.0
Pharmaceuticals	3.873	9.1	8.9	8.4	6.5	4.5	3.4	3.7
Food	3.299	4.5	3.9	1.2	0.8	1.7	3.0	2.5
Direct Purchase	2.111	4.5	3.5	0.0	0.2	1.6	3.3	1.6
Contract Service	1.188	4.6	4.7	3.4	2.0	1.8	2.6	3.9
Chemicals and Cleaning Products	3.126	7.5	-1.4	-1.3	-2.3	1.1	-0.3	3.8
Surgical and Medical Instruments	2.672	4.1	2.6	1.5	2.2	2.2	2.3	3.1
Photographic Supplies	2.623	8.8	3.7	-1.4	-0.2	-1.1	2.2	1.7
Rubber and Plastics	2.323	3.0	0.9	1.3	0.0	0.8	0.5	0.8
Paper Products	1.399	6.5	1.2	-1.5	-1.4	-0.4	2.2	6.3
Apparel	1.142	2.1	2.7	2.1	1.7	1.9	1.8	2.0
Minor Machinery and Equipment	0.497	3.7	2.8	1.9	0.3	0.5	1.5	2.5
Miscellaneous Products	0.833	5.1	4.9	2.1	1.2	1.2	1.4	2.6
Other Services	11.051	5.0	4.3	3.3	2.2	2.0	3.4	3.6
Business Services	3.845	5.4	4.5	2.9	2.1	1.5	2.2	3.5
Computer and Data Processing	1.992	7.5	6.5	3.1	1.4	3.6	2.8	3.6
Transportation and Shipping	1.233	5.0	5.6	2.8	2.2	3.0	3.7	5.2
Telephone	0.987	1.0	0.4	1.6	0.6	0.7	2.0	2.1
Blood Services	0.588	5.5	0.1	1.0	5.8	-0.4	-0.8	2.1
Postage	0.372	3.1	0.0	14.8	1.2	0.0	29.3	5.4
Other—Labor Intensive	1.233	3.7	4.0	4.1	2.9	2.1	3.0	4.0
Other—Non-Labor Intensive	0.800	4.8	5.4	4.2	3.0	3.0	3.0	3.2

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

²Category weights may not sum to total because of rounding.

NOTE: All data through 1993 are historical. Data beginning with 1994, quarter 1 are forecasted.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1994 forecasts were produced by Data Resources, Inc./McGraw-Hill.

Table 13. Calendar Year Index Levels for Four-Quarter Moving Averages in the Home Health Agency Input Price Index, by Expense Category: 1986-95.

Expense Category1	Base Year Weights 19762	Calendar Year
		1986	1987	1988	1989	1990	1991	1992	1993	1994	1995
Total	100.000	210.7	220.3	233.7	248.2	261.4	276.3	287.9	297.9	309.1	321.7
Compensation	73.040	214.7	225.0	240.1	255.7	269.2	285.8	298.6	309.2	321.4	334.7
Wages and Salaries	65.140	215.2	226.3	241.7	257.8	271.2	287.5	299.7	309.8	321.3	334.7
Employee Benefits	7.900	210.6	214.6	227.4	238.2	252.6	271.4	289.9	304.9	322.1	334.6
Transportation	4.870	185.7	191.4	197.3	207.1	218.8	224.8	229.7	236.7	245.3	258.0
Office Costs	2.790	222.1	231.5	242.0	254.0	267.4	280.4	291.0	302.1	312.6	323.4
Medical and Nursing Supplies	2.810	190.0	197.6	204.8	216.7	228.1	239.6	249.4	257.6	265.1	274.9
Rental and Leasing	1.350	193.4	201.4	209.1	217.2	226.4	234.4	240.3	245.9	249.3	258.8
Energy and Utilities	1.170	220.2	219.0	221.4	230.0	250.5	252.3	253.6	260.3	262.0	269.1
Miscellaneous Costs	7.100	192.7	199.7	207.9	217.8	229.6	239.4	246.6	253.9	261.6	269.9
Contract Services	6.870	210.7	220.3	233.7	248.2	261.4	276.3	287.9	297.9	309.1	321.7

¹For data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1992b).

²Category weights may not sum to total because of rounding.

NOTE: All data through 1993 are historical. Data beginning with 1994 are forecasted.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1994 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. Calendar Year Index Levels for Four-Quarter Moving Averages in the Prospective Payment System Hospital Input Price Index, by Expense Category: 1989-95.

Expense Category1	Base Year Weights 19872	Calendar Year
		1989	1990	1991	1992	1993	1994	1995
Total	100.000	111.8	117.3	121.7	125.4	129.0	132.9	137.8
Compensation	61.709	111.3	117.5	123.0	127.8	132.2	136.8	142.1
Wages and Salaries	52.212	110.8	116.4	121.4	125.6	129.5	133.6	138.3
Employee Benefits	9.497	114.4	123.4	131.5	139.6	147.0	154.4	163.3
Other Professional Fees	1.649	110.5	115.9	120.9	125.6	129.7	133.9	138.6
Energy and Utilities	2.376	107.1	118.5	116.2	115.1	114.9	111.1	115.3
Fuel Oil, Coal, and Other Fuel	0.625	113.1	142.4	126.3	119.4	116.0	105.5	113.4
Electricity	1.143	103.2	106.2	113.7	115.1	116.2	113.0	115.0
Natural Gas	0.343	101.8	99.7	98.1	100.1	105.0	109.3	110.6
Motor Gasoline	0.229	117.0	141.5	125.7	122.4	115.1	112.6	122.0
Water and Sewerage Maintenance	0.036	113.3	120.8	129.7	138.5	146.0	153.9	162.3
Professional Liability Insurance	1.433	129.2	129.0	130.7	135.0	139.0	143.9	151.8
All Other	32.839	112.3	116.4	119.2	121.2	123.4	126.5	130.6
Other Products	21.788	113.5	117.3	119.5	121.2	123.3	125.8	129.6
Pharmaceuticals	3.873	120.2	130.9	141.9	151.1	157.9	163.2	169.2
Food	3.299	109.7	114.0	115.4	116.4	118.3	121.9	124.9
Direct Purchase	2.111	109.6	113.4	113.4	113.6	115.4	119.2	121.2
Contract Service	1.188	109.9	115.1	118.9	121.3	123.5	126.7	131.6
Chemicals and Cleaning Products	3.126	122.7	121.0	119.5	116.7	118.0	117.7	122.2
Surgical and Medical Instruments	2.672	106.3	109.1	110.7	113.2	115.7	118.3	121.9
Photographic Supplies	2.623	111.8	115.9	114.3	114.1	112.9	115.4	117.4
Rubber and Plastics	2.323	110.4	111.4	112.8	112.8	113.7	114.3	115.2
Paper Products	1.399	117.4	118.8	117.0	115.3	114.9	117.4	124.8
Apparel	1.142	105.2	108.1	110.3	112.2	114.3	116.3	118.6
Minor Machinery and Equipment	0.497	106.7	109.8	111.9	112.2	112.8	114.5	117.3
Miscellaneous Products	0.833	108.4	113.8	116.2	117.6	119.1	120.8	123.9
Other Services	11.051	110.0	114.8	118.6	121.2	123.6	127.9	132.6
Business Services	3.845	109.7	114.6	117.9	120.4	122.2	124.9	129.2
Computer and Data Processing	1.992	117.6	125.2	129.1	130.9	135.5	139.3	144.3
Transportation and Shipping	1.233	109.9	116.1	119.3	121.9	125.6	130.2	136.9
Telephone	0.987	100.3	100.8	102.4	103.0	103.7	105.7	108.0
Blood Services	0.588	105.6	105.7	106.8	113.0	112.6	111.7	114.0
Postage	0.372	113.5	113.5	130.3	131.9	131.9	170.5	179.6
Other—Labor Intensive	1.233	107.8	112.1	116.7	120.1	122.6	126.4	131.4
Other—Non-Labor Intensive	0.800	110.3	116.3	121.2	124.9	128.5	132.3	136.6

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

²Category weights may not sum to total because of rounding.

NOTE: All data through 1993 are historical. Data beginning with 1994, quarter 1 are forecasted.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1994 forecasts were produced by Data Resources, Inc/McGraw-Hill.

Table 10. Calendar Year Percent Change for Four-Quarter Moving Averages in the Skilled Nursing Facility Input Price Index, by Expense Category: 1987-95.

Expense Category1	Base Year Weights 19772	Calendar Year
		1987	1988	1989	1990	1991	1992	1993	1994	1995
Total	100.000	3.4	5.1	6.6	6.3	4.4	3.8	3.7	3.9	4.5
Compensation	70.620	3.3	5.5	7.1	6.5	4.8	4.2	3.9	4.2	5.0
Wages and Salaries	63.020	3.5	5.4	7.4	6.5	4.4	3.9	3.8	4.0	4.8
Employee Benefits	7.600	1.9	5.9	4.7	6.0	7.5	6.8	5.2	5.6	6.4
Fuel and Other Energy	4.270	-0.6	1.0	3.8	8.8	0.7	0.5	2.6	0.6	3.9
Fuel Oil and Coal	1.660	0.3	0.3	4.3	20.4	-3.8	-3.8	-0.2	-1.1	4.4
Electricity	1.210	-0.4	1.4	3.1	2.3	3.8	2.0	1.9	0.2	1.8
Natural Gas	0.910	-4.6	-0.6	2.8	0.1	1.2	1.9	6.1	0.3	4.1
Water and Sewerage Maintenance	0.490	5.3	5.5	6.1	6.7	7.3	6.8	5.4	5.4	5.8
Food	9.740	3.3	4.3	5.2	4.5	1.6	1.2	1.9	3.4	2.2
Direct Purchase	4.930	2.4	4.4	4.5	3.5	0.0	0.1	1.6	3.2	1.8
Contract Service	4.810	4.2	4.1	5.8	5.3	3.0	2.0	2.1	3.5	2.6
All Other	15.370	4.7	4.9	5.6	6.0	5.1	4.0	3.7	3.4	3.7
Drugs	1.500	9.1	7.9	9.1	8.9	8.4	6.5	4.5	3.4	4.1
Supplies	3.280	3.7	4.1	4.8	5.4	4.2	3.0	3.0	3.0	3.3
Health Services	1.210	7.4	7.2	7.3	7.2	6.0	6.3	5.6	4.8	5.8
Other Business Services	4.590	4.2	4.5	4.9	5.3	4.8	3.8	3.8	3.5	3.6
Miscellaneous	4.790	3.7	4.1	4.8	5.4	4.2	3.0	3.0	3.0	3.3

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1992c).

²Category weights may not sum to total because of rounding.

NOTE: All data through 1993 are historical. Data beginning with 1994 are forecasted.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1994 forecasts were produced by Data Resources, Inc/McGraw-Hill.

Table 11. Calendar Year Index Levels for Four-Quarter Moving Averages in the Skilled Nursing Facility Input Price Index, by Expense Category: 1986-95.

Expense Category1	Base Year Weights 19772	Calendar Year
		1986	1987	1988	1989	1990	1991	1992	1993	1994	1995
Total	100.000	179.5	185.5	194.9	207.7	220.9	230.6	239.3	248.1	257.8	268.1
Compensation	70.620	178.8	184.7	194.8	208.7	222.2	232.8	242.6	252.2	262.8	274.4
Wages and Salaries	63.020	177.5	183.7	193.6	208.0	221.6	231.4	240.4	249.5	259.6	271.1
Employee Benefits	7.600	189.5	193.1	204.6	214.3	227.2	244.2	260.8	274.4	289.8	301.1
Fuel and Other Energy	4.270	196.0	194.9	196.9	204.4	222.4	224.0	225.0	230.9	232.2	238.3
Fuel Oil and Coal	1.660	177.1	177.6	178.2	185.8	223.7	215.3	207.1	206.7	204.4	213.2
Electricity	1.210	193.9	193.1	195.7	201.8	206.5	214.2	218.5	222.7	223.2	225.4
Natural Gas	0.910	230.6	219.9	218.6	224.7	225.1	227.8	232.0	246.2	247.0	247.2
Water and Sewerage Maintenance	0.490	200.7	211.4	223.0	236.5	252.2	270.7	289.1	304.8	321.2	338.8
Food	9.740	153.9	159.0	165.8	174.4	182.3	185.2	187.4	190.9	197.4	202.0
Direct Purchase	4.930	142.5	145.9	152.4	159.2	164.8	164.8	165.0	167.6	173.1	175.9
Contract Service	4.810	165.5	172.5	179.6	190.1	200.2	206.2	210.3	214.8	222.3	228.7
All Other	15.370	194.3	203.5	213.5	225.4	238.9	251.0	261.1	270.7	279.8	289.8
Drugs	1.500	218.5	238.2	257.1	280.5	305.4	330.9	352.4	368.4	380.8	394.7
Supplies	3.280	181.0	187.6	195.2	204.6	215.7	224.8	231.6	238.5	245.7	253.5
Health Services	1.210	207.6	222.9	238.9	256.5	274.9	291.4	309.7	327.0	342.5	360.9
Other Business Services	4.590	206.3	215.0	224.8	235.9	248.4	260.4	270.3	280.6	290.4	300.4
Miscellaneous	4.790	181.0	187.6	195.2	204.6	215.7	224.8	231.6	238.5	245.7	253.5

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1992c).

²Category weights may not sum to total because of rounding.

NOTE: All data through 1993 are historical. Data beginning with 1994 are forecasted.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1994 forecasts were produced by Data Resources, Inc./McGraw-Hill.

Table 12. Calendar Year Percent Change for Four-Quarter Moving Averages in the Home Health Agency Input Price Index, by Expense Category: 1987-95.

Expense Category1	Base Year Weights 19762	Calendar Year
		1987	1988	1989	1990	1991	1992	1993	1994	1995
Total	100.000	4.5	6.1	6.2	5.3	5.7	4.2	3.5	3.8	4.1
Compensation	73.040	4.8	6.7	6.5	5.3	6.2	4.5	3.6	3.9	4.1
Wages and Salaries	65.140	5.1	6.8	6.7	5.2	6.0	4.2	3.4	3.7	4.2
Employee Benefits	7.900	1.9	5.9	4.7	6.0	7.5	6.8	5.2	5.6	3.9
Transportation	4.870	3.0	3.1	5.0	5.6	2.8	2.2	3.0	3.7	5.2
Office Costs	2.790	4.2	4.5	4.9	5.3	4.8	3.8	3.8	3.5	3.5
Medical and Nursing Supplies	2.810	4.0	3.6	5.8	5.3	5.0	4.1	3.3	2.9	3.7
Rental and Leasing	1.350	4.1	3.8	3.9	4.2	3.5	2.5	2.3	1.4	3.8
Energy and Utilities	1.170	-0.5	1.1	3.9	8.9	0.7	0.5	2.7	0.6	2.7
Miscellaneous Costs	7.100	3.7	4.1	4.8	5.4	4.2	3.0	3.0	3.0	3.2
Contract Services	6.870	4.5	6.1	6.2	5.3	5.7	4.2	3.5	3.8	4.1

¹For the data sources used to estimate the input price index relative weights and choice of price proxies, see the Federal Register (1993b).

²Category weights may not sum to total because of rounding.

NOTE: All data through 1993 are historical. Data beginning with 1994 are forecasted.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Office of National Health Statistics, Division of Health Cost Analysis. First quarter 1994 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 present national indicators of output and employment.

Table 14. Selected National Economic Indicators: 1984-93.

Indicator	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
Gross Domestic Product
Billions of Dollars	$3,777	$4,039	$4,269	$4,540	$4,900	$5,251	$5,546	$5,723	$6,039	$6,378	$6,262	$6,328	$6,396	$6,527
Billions of 1987 Dollars	$4,149	$4,280	$4,404	$4,540	$4,719	$4,838	$4,897	$4,861	$4,986	$5,136	$5,078	$5,102	$5,138	$5,226
Implicit Price Deflator (1987=100.0)	91.0	94.4	96.9	100.0	103.9	108.5	113.2	117.7	121.1	124.2	123.3	124.0	124.5	124.9
Employment, Hours, and Earnings
Unemployment Rate, All Workers	7.5	7.2	7.0	6.2	5.5	5.3	5.5	6.7	7.4	6.8	7.6	6.9	6.6	6.1
Private Non-Agricultural Workers:
Total Employment in Thousands	78,384	80,992	82,651	84,948	87,824	90,117	91,115	89,854	89,866	91,336	89,217	91,297	92,335	92,495
Average Weekly Hours	35.2	34.9	34.7	34.8	34.7	34.6	34.5	34.3	34.4	34.5	34.0	34.5	34.8	34.6
Average Hourly Earnings	$8.31	$8.57	$8.76	$8.98	$9.28	$9.65	$10.01	$10.32	$10.57	$10.83	$10.78	$10.79	$10.81	$10.96
Health Services Workers:
Total Employment in Thousands	6,118	6,293	6,528	6,794	7,105	7,463	7,814	8,183	8,523	8,871	8,736	8,836	8,927	8,984
Average Weekly Hours	32.5	32.5	32.4	32.4	32.4	32.5	32.5	32.5	32.8	32.7	32.7	32.7	32.9	32.7
Average Hourly Earnings	$7.71	$8.06	$8.35	$8.69	$9.21	$9.82	$10.40	$10.96	$11.39	$11.77	$11.68	$11.70	$11.79	$11.91
Personal Income and Savings
Income in Billions	$3,155	$3,380	$3,590	$3,802	$4,076	$4,380	$4,674	$4,851	$5,145	$5,388	$5,255	$5,373	$5,413	$5,513
Disposable Income in Billions	$2,760	$2,943	$3,131	$3,290	$3,548	$3,787	$4,051	$4,231	$4,500	$4,707	$4,598	$4,692	$4,724	$4,813
Savings in Billions	$222	$189	$187	$142	$156	$152	$170	$201	$239	$190	$178	$209	$180	$193
Personal Savings Rate	8.0	6.5	6.0	4.3	4.4	4.0	4.2	4.7	5.3	4.0	3.9	4.4	3.8	4.0
Prices1
Gross Domestic Product Fixed-Weight Price Index (1987=100.0)	91.1	94.3	97.0	100.0	103.9	108.6	113.5	118.2	122.1	125.9	124.8	125.6	126.3	127.0
Consumer Price Index, All Items	103.9	107.6	109.6	113.6	118.3	124.0	130.7	136.2	140.3	144.5	143.1	144.2	144.8	145.8
All Items Less Medical Care	103.7	107.2	108.8	112.6	117.0	122.4	128.8	133.8	137.5	141.2	140.0	141.0	141.5	142.4
Apparel and Upkeep	102.0	105.0	105.9	110.6	115.4	118.6	124.1	128.7	131.9	133.7	133.1	134.6	132.0	135.0
Energy	100.9	101.6	88.2	88.6	89.2	94.3	102.1	102.4	103.0	104.1	102.7	104.7	105.4	103.8
Food and Beverages	103.2	105.6	109.1	113.5	118.2	124.9	132.1	136.8	138.7	141.6	140.7	141.4	141.5	142.7
Housing: Shelter	104.0	109.8	115.8	121.2	127.1	132.8	140.0	146.3	151.2	155.7	154.3	155.2	156.6	156.9
Medical Care	106.9	113.5	122.0	130.1	138.6	149.2	162.8	177.0	190.1	201.4	197.7	200.3	202.8	204.8
Producer Price Index,2 Finished Consumer Goods	103.3	103.9	101.4	103.6	106.2	112.1	118.2	120.4	121.7	123.0	122.8	124.2	122.8	122.2

¹Base period = 1982-84, unless noted.

²Formerly called the “Wholesale Price Index.”

NOTES: Q designates quarter of year. Unlike Tables 1-13, quarterly data on GDP, personal income, disposable personal income, and savings are seasonally adjusted at annual rates.

SOURCES: U.S. Department of Commerce, Bureau of Economic Analysis: Survey of Current Business. Washington. U.S. Government Printing Office. Monthly reports for January 1984-March 1994; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1984-March 1994.

Table 15. Percent Change in Selected National Economic Indicators: 1984-93.

Indicator	Calendar Year										1993 Q1	1993 Q2	1993 Q3	1993 Q4
	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993
	Annual Percent Change										Percent Change From the Same Period of Previous Year
Gross Domestic Product
Billions of Dollars	10.9	6.9	5.7	6.4	7.9	7.2	5.6	3.2	5.5	5.6	6.0	5.6	5.6	5.4
Billions of 1987 Dollars	6.2	3.2	2.9	3.1	3.9	2.5	1.2	-0.7	2.6	3.0	3.2	2.9	2.8	3.1
Implicit Price Deflator (1987=100.0)	4.5	3.6	2.7	3.2	3.9	4.5	4.3	3.9	2.9	2.5	2.7	2.6	2.7	2.2
Employment, Hours, and Earnings
Unemployment Rate, All Workers1	-2.1	-0.3	-0.2	-0.8	-0.7	-0.2	0.3	1.2	0.7	-0.6	0.4	-0.6	-0.9	-1.2
Private Non-Agricultural Workers:
Total Employment	5.5	3.3	2.0	2.8	3.4	2.6	1.1	-1.4	0.0	1.6	1.3	1.5	1.8	2.0
Average Weekly Hours	0.6	-0.8	-0.5	0.0	-0.2	-0.3	-0.3	-0.6	0.2	0.3	-0.1	0.4	0.6	0.4
Average Hourly Earnings	3.7	3.0	2.3	2.5	3.4	4.0	3.7	3.1	2.5	2.5	2.6	2.5	2.3	2.4
Health Services Workers:
Total Employment	2.2	2.9	3.7	4.1	4.6	5.0	4.7	4.7	4.2	4.1	4.3	4.3	4.0	3.7
Average Weekly Hours	-0.4	0.0	-0.3	-0.1	0.2	0.1	0.3	0.0	0.7	-0.1	-0.4	0.4	0.0	-0.2
Average Hourly Earnings	4.4	4.5	3.6	4.2	5.9	6.7	5.9	5.3	3.9	3.4	4.0	3.5	3.1	2.9
Personal Income and Savings
Income	10.2	7.1	6.2	5.9	7.2	7.5	6.7	3.8	6.1	4.7	4.7	5.5	5.3	3.5
Disposable Income	10.7	6.6	6.4	5.0	7.9	6.7	7.0	4.4	6.4	4.6	4.8	5.2	5.0	3.3
Savings	31.6	-14.7	-1.0	-24.3	9.6	-2.3	11.8	18.5	18.5	-20.4	-18.2	-12.3	-18.2	-30.9
Personal Savings Rate1	1.3	-1.6	-0.5	-1.7	0.1	-0.3	0.1	0.6	0.6	-1.3	-1.1	-0.9	-1.1	-2.0
Prices2
Gross Domestic Product Fixed-Weight Price Index (1987=100.0)	3.3	3.6	2.8	3.1	3.9	4.5	4.5	4.1	3.3	3.1	3.3	3.1	3.1	2.8
Consumer Price Index, All Items	4.3	3.5	1.9	3.7	4.1	4.8	5.4	4.2	3.0	3.0	3.2	3.1	2.7	2.7
All Items Less Medical Care	4.1	3.4	1.6	3.4	3.9	4.6	5.2	3.9	2.7	2.7	2.9	2.9	2.5	2.5
Apparel and Upkeep	1.8	2.9	0.8	4.4	4.3	2.8	4.6	3.7	2.5	1.4	2.0	1.6	0.8	1.0
Energy	1.0	0.7	-13.2	0.4	0.8	5.7	8.2	0.4	0.5	1.1	3.4	2.0	-0.3	-0.4
Food and Beverages	3.8	2.3	3.3	4.1	4.1	5.7	5.8	3.6	1.4	2.1	1.8	2.1	2.0	2.5
Housing: Shelter	4.9	5.6	5.5	4.7	4.8	4.5	5.4	4.5	3.4	3.0	3.0	3.1	3.0	2.9
Medical Care	6.2	6.2	7.5	6.6	6.5	7.7	9.1	8.7	7.4	6.0	6.3	6.1	5.9	5.5
Producer Price Index,3 Finished Consumer Goods	2.0	0.5	-2.4	2.1	2.5	5.6	5.5	1.9	1.0	1.1	2.1	2.1	0.4	-0.2

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 January 1983-March 1994; U.S. Department of Labor, Bureau of Labor Statistics: Employment and Earnings. Washington. U.S. Government Printing Office. Monthly reports for January 1983-March 1994.

Gross domestic product (GDP) measures the output of U.S. economy as the market value of goods and services produced within the geographic boundaries of the United States by U.S. or foreign citizens or companies. Constant dollar or “real” GDP removes the effects of price changes from the valuation of goods and services produced, so that the growth of real GDP reflects changes in the “physical quantity” of the output of the economy (U.S. Department of Commerce, 1993).

1993 Health Care Indicators

In 1993, the operating expenses of community hospitals exhibited a rapid deceleration in growth. Operating expenses grew at a slower rate in 1993 than in any year since 1985. The operating expenses of community hospitals increased to $278.9 billion in 1993, a 6.9-percent increase over 1992. This increase represents a deceleration of 2.5 percentage points in the annual rate of growth, when compared with the 9.4 percent increase in 1992 operating expenses. The slower growth in both labor and non-labor expenses contributed to the deceleration of overall operating expenses in 1993. Labor expenses increased 6.9 percent in 1993, compared with an 8.9-percent increase in 1992. Non-labor expenses increased 6.8 percent in 1993 compared with an increase of 10.0 percent in 1992, a deceleration of 3.2 percentage points.

Community hospital statistics present a mixed picture on hospital utilization for the year 1993. Total admissions increased 0.7 percent in 1993, the first annual increase in admissions since 1982. This increase was the result of an unusual pattern of increases in both the third and the fourth quarters of 1993. As measured over the same quarter in the previous year, third quarter admissions increased 1.0 percent and fourth quarter admissions increased 2.3 percent. These are the first back-to-back quarterly increases, and the largest fourth quarter increase since the inception PPS. The increase in total admissions was more than accounted for by the increase in admissions in the 65 years of age or over group, as the number of admissions in the under 65 years of age group continued to decrease in 1993. The number of outpatient visits, another measure of hospital utilization, continued to increase in 1993, with a 6.5-percent increase over 1992. The pattern of steady, sustained growth in outpatient visits was unchanged throughout 1993. The 1993 fourth quarter increase in outpatient visits was 7.0 percent, measured over the fourth quarter of 1992. In contrast to the turnaround in admissions, two other measures of hospital utilization, the number of inpatient days and the adult length of stay, continued to decrease in 1993. The adult length of stay, calculated by dividing inpatient days by admissions, decreased 2.8 percent in 1993 to a level of 6.2 days, the lowest level recorded in 30 years. The community hospital statistics on admissions and inpatient days indicate that whereras the number of patients admitted in 1993 increased, the time they spent in the hospital continued to decrease.

Employment growth in the health care industry continued to outpace employment growth in the overall economy in 1993. Employment in health services grew 4.1 percent from 1992 to 1993, increasing to a level of 8.87 million workers. Continuing a trend established in 1986, employment in health services grew faster than employment in all private non-agricultural establishments. Employment in health services grew 4.2 and 4.1 percent in 1992 and 1993, respectively, whereas employment in the private non-agricultural sector grew 0.0 and 1.6 percent during the same period. The health service industry accounted for roughly one-fourth of all private sector job creation in 1993, accounting for 348,000 of 1,470,000 jobs created during the year.

In 1993, the pace of employment growth within the health services industry varied considerably from sector to sector. Employment growth in the offices and clinics of medical doctors continued to lead the health services industry in 1993, with an increase of 4.9 percent above the previous year. In 1993, employment increased 4.7 percent in nursing and personal care facilities and 3.8 percent in the offices and clinics of dentists. Employment in each of these three sectors of the health services industry grew at least twice as fast as the private sector employment in 1993. In contrast, employment growth in hospitals was 1.6 percent in 1993, a rate equal to that of all private non-agricultural establishments. In the third and fourth quarters of 1993, employment in hospitals grew at a slower rate than private sector employment. Measured over the same period a year earlier, hospital employment grew 1.4 and 0.8 percent in the third and fourth quarters of 1993, compared with quarterly increases of 1.8 and 2.0 percent in the private non-agricultural sector.

Implied non-supervisory work hours and payrolls, developed from the BLS establishment survey, are frequently cited as composite measures of economic activity. 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. For private health service establishments, growth in both these measures decelerated in 1993. Implied non-supervisory work hours grew 3.8 percent in 1993, compared with an increase of 4.8 percent in 1992. Implied non-supervisory payrolls grew 7.3 percent in 1993, compared with an increase of 8.9 percent in 1992. Within the health services industry, private hospitals were responsible for most of the deceleration in these measures. For private hospitals, implied non-supervisory payrolls grew 5.2 percent in 1993, compared with 7.9 percent in 1992. Implied non-supervisory work hours in private hospitals grew 1.8 percent in 1993, compared with an increase of 3.5 percent in 1992. The 1993 growth rate for private hospitals was slower than the 2.4 percent increase registered in implied non-supervisory work hours for the private non-agricultural sector.

Consumer prices, as measured by the Consumer Price Index for all urban consumers, increased 3.0 percent in 1993, roughly the same increase as recorded in 1992. The increase in consumer prices for medical care was 6.0 percent in 1993, a slight deceleration from the 7.4-percent increase of 1992. Prices for medical care services increased 6.5 percent in 1993, compared with an increase of 7.6 percent in 1992. Prices for medical care commodities increased 3.7 percent in 1993, compared with an increase of 6.4 percent in 1992.

Overall economic conditions improved in 1993. The current expansion continued, as the fourth quarter of 1993 represented 11 consecutive quarters of growth in the economy. Economic growth, measured by the change in real GDP, accelerated in 1993. Real GDP increased 3.0 percent, a slight acceleration in the rate of growth from the 2.6-percent increase in 1992. Inflation, as measured by the change in the implicit price deflator for GDP, moderated slightly in 1993 as the rate of increase in prices decelerated over the year. The implicit price deflator for GDP, a measure of aggregate price changes in the economy, increased 2.5 percent in 1993, compared with increases of 2.9 percent in 1992 and 3.9 percent in 1991. The unemployment rate dropped from 7.4 percent in 1992 to 6.8 percent in 1993.

Predicting Health Spending Using Indicators

The 1993 health care indicators, presented in Tables 1-15, can be used to predict the share of GDP allocated to health care prior to the availability of more complete health expenditure data. Growth rates for five major components of NHE can be estimated using the growth rates of select health care indicators. The five major components are hospital care, physician services, dental services, drugs and other non-durable medical products, and nursing home care. During the past decade, these five components have accounted for 77 to 80 percent of all health care spending. An expected range for annual health care spending in 1992 and 1993 can be determined from preliminary estimates of these five components. The growth in spending on hospital care can be estimated using the AHA Panel Survey data. The AHA reports that growth in community hospital expenditures (Table 2) and revenues was slower in 1993 than in 1992. The 2-year pattern in these indicators suggests growth in hospital expenditures decelerated in 1992 and continued to decelerate in 1993.

Preliminary estimates of the growth in expenditures for physician services, dental services, and nursing home care can be made using the implied non-supervisory payroll data (Table 5) developed from the BLS establishment survey. For physician services, the 1993 growth rate in implied payrolls was 8.9 percent, an acceleration from the 8.1-percent growth rate observed in 1992. For dental services, a somewhat larger acceleration occurred from 1992 to 1993, as the increase in implied payrolls was 7.4 percent during the year, compared with 6.4 percent in 1992. For nursing homes, the growth in implied payrolls in 1993 was 8.1 percent, compared with 8.0 percent in 1992. The 2-year pattern in the indicators for these three components of NHE suggests that expenditures decelerated rather sharply in 1992, then accelerated again in 1993.

The growth rate of expenditures for retail purchases of drugs and other medical non-durables has been close to the growth rate of the CPI for prescription drugs. In 1993, the CPI showed prices for prescription drugs grew 3.9 percent, a pronounced deceleration compared with the growth of 7.6 percent in 1992 (Table 7).

Preliminary estimates of the five selected major components of the NHE can be calculated by applying the predicted growth rates for 1992 and 1993 to the 1991 estimates. From 1987 to 1991, the sum of these five components has fallen as a share of total NHE, decreasing from approximately 80 percent in 1987 to 78 percent in 1991. Using the preliminary estimates of the five components and the historic trend in their share of NHE as an indicator of the future share, preliminary estimates of total NHE can be prepared.

The preliminary estimates indicate that the growth in total NHE decelerated in 1992 and 1993. These estimates, based on the health care indicators, suggest that growth in total NHE in 1992 and 1993 was 1-2 percentage points slower each year than the 11-percent growth experienced in 1991. Using the preliminary estimates, an expected range of health expenditures as a percent of GDP can be determined. In 1991, health expenditures accounted for approximately 13.2 percent of GDP, up from 12.2 percent in 1990. The unprecedented 1.0-percentage point increase in NHE as a share of GDP was attributable to the slow growth of GDP—3.2 percent (Table 15)—rather than to accelerating health care spending. Health expenditures as a share of GDP continued to increase in 1992 and 1993, but at a slower rate. In 1992, the preliminary estimates indicate that health expenditures were 13.7 to 13.9 percent of GDP. In 1993, health expenditures grew to 14.0-14.2 percent of GDP. Although the 1992 and 1993 preliminary estimates signal a deceleration in the rate of growth of health expenditures as a share of GDP, it should be noted that the share of GDP has continued to increase during the current economic expansion. The relative share of the Nation's output committed to health care has never been higher, and the growth in spending for health care services and supplies continues to outpace the growth in spending in the economy at large.