Health Care Indicators: Hospital, Employment, and Price Indicators for the Health Care Industry: First Quarter 1999

Mary Lee Seifert; Stephen K Heffler; Carolyn S Donham

. 1999 Fall;21(1):79–121.

Health Care Indicators: Hospital, Employment, and Price Indicators for the Health Care Industry: First Quarter 1999

Mary Lee Seifert, Stephen K Heffler, Carolyn S Donham

PMCID: PMC4194619 PMID: 11481737

Abstract

This feature presents highlights from statistics on health care utilization, prices, expenses, employment, and work hours, as well as on national economic activity, with brief analysis of these economic indicators. These statistics provide an early indication of changes occurring in the health care sector and within the general economy. Although most data are for the first quarter of 1999, American Hospital Association data (Tables 1 and 2) refer to the third quarter of 1998.

Key Trends

The decline in employment in home health care services has slowed, falling 6.6 percent in the first quarter of 1999 after a fourth-quarter decline of 8.1 percent. Non-supervisory employment also declined, down 6.7 percent in the first quarter of 1999, driving a 4.7-percent decrease in this industry's implied payrolls. (Implied payrolls are calculated by multiplying the number of non-supervisory workers by their average weekly earnings. Average weekly earnings are average weekly hours times average hourly earnings.) Home health care service employment and payroll decreases began in the first quarter of 1998, following public sector actions to control Medicare spending growth and detect fraud and abuse.
Employment in all private and government hospitals increased by 1.3 percent in the first quarter of 1999, driven by a 1.5-percent growth in private hospital employment and a 1.7-percent increase in local government hospital employment. Employment in Federal Government hospitals continued to decline.
Inpatient days increased by 0.8 percent in the third quarter of 1998, compared with the same period of the previous year. This increase is the second in three quarters and only the second in a 6-year period. An increase of 1.2 percent in hospital admissions was tempered by a 0.4-percent decline in the adult length of stay, the 36th consecutive quarterly decline.
Hospital Insurance (HI) Trust Fund assets rose 8.3 percent in the first quarter of 1999. Estimates in the 1999 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund indicate that, given current law and trends, the Part A trust fund will be exhausted in 2015.
Consumer Price Index (CPI) medical price growth, which appeared to have reached a trough in the fourth quarter of 1997 at 2.6 percent, increased 3.5 percent for the third consecutive quarter in the first quarter of 1999.
Faster growth in medical prices over the past year was attributable to accelerating drug and hospital price growth.
Producer Price Index (PPI) growth for both skilled nursing facility (SNF) and home health care services fell to near historical lows in the first quarter of 1999.

Hospital Occupancy Rates

Reversing a second quarter decline, the adult occupancy rate again increased, rising 0.8 percentage points in the third quarter of 1998 (Figure 1). Inpatient days rose 0.8 percent from the same period of the previous year, and staffed beds decreased only 0.6 percent. The adult occupancy rate represents the ratio of the average daily hospital census (inpatient days divided by the number of days in the year) to the average number of staffed hospital beds. The adult occupancy rate has decreased about 14 percentage points over the long term, from 73.1 percent in the second quarter of 1983 to 58.7 percent in the third quarter of 1998. The number of staffed hospital beds has fallen about 18 percent, from 1,005,718 in the second quarter of 1983 to 824,630 in the third quarter of 1998. With the exception of the first and third quarters of 1998, the number of inpatient days has decreased every quarter since the first quarter of 1990. A 33.4-percent decline in inpatient days since the second quarter of 1983 has been the main reason for the long-term decline in the adult occupancy rate.

Hospital Admissions and Out-Patient Visits

Hospital admissions rose 1.2 percent in the third quarter of 1998, compared with the same period of the previous year, while outpatient visits rose more rapidly, increasing 7.7 percent (Figure 2). The pace of growth in outpatient visits picked up from the 6.4 percent posted in the second quarter of 1998 and appears to be accelerating.

For the third quarter of 1998, operating expenses increased 4.0 percent, compared with the same period of the previous year, and hospital revenues were up 3.0 percent. The 1.0-percentage-point difference in growth rates is the largest gap between expense and revenue growth rates in more than 9 years. Inpatient revenues increased by 1.1 percent but inpatient expenses grew by 1.9 percent. Outpatient revenues grew by 7.2 percent and outpatient expenses rose by 8.0 percent. On a per utilization basis, however, the expense per inpatient admission increased by 0.7 percent, while the expense per outpatient visit increased only 0.2 percent.

Medicare Trust Fund Operations

Total Medicare outlays (the sum of Part A and Part B outlays) decreased 4.3 percent in the first quarter of 1999. Although Medicare Part A outlays rose 1.0 percent, Part B outlays dropped 12.3 percent. The HI Trust Fund income grew 9.9 percent, and, by the end of the first quarter of 1999, the level of assets in the HI Trust Fund increased 8.3 percent from the same period 1 year earlier (Figure 3). This was the fourth consecutive quarterly increase in assets and was attributable to the 9.9-percent income increase coupled with only a 1.0-percent increase in outlays. A strong economy with low unemployment continued to boost HI Trust Fund income, while outlays slowed for reasons similar to those explaining lower outlays in 1998: Lower Medicare hospital updates for reimbursement rates for 1998 and 1999 under the Balanced Budget Act of 1997 and continuing efforts to combat fraud and abuse. Estimates found in the 1999 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund indicate that, given current law and trends, the Part A Trust Fund will be exhausted in 2015.

Health Sector Employment and Payrolls

A 1.2-percent increase in private health services employment in the first quarter of 1999 masks a second consecutive drop in nursing home employment (-0.6 percent) and a continuing decline in home health care services employment (Figure 4). Following nine quarters of deceleration, in the fourth quarter of 1998, nursing home employment growth experienced its first decline of the 1990s (-0.4 percent), compared with the same period of the previous year. The home health care employment decrease of 6.6 percent in the first quarter of 1999, however, represents a deceleration from the declines of the previous two quarters. For home health care services, the rapid employment growth of previous years began to slow after the first quarter of 1994; actual decreases began in the first quarter of 1998. These declines followed public sector actions to control Medicare spending and detect fraud and abuse. This latest quarter's home health care employment decline, along with shrinking average weekly hours worked (down 1.4 percent) caused a 4.7-percent decrease in implied payroll, well below the 3.5-percent increase in payrolls for the health sector overall. Payrolls for health industries other than home health care rose between 2.5 and 5.5 percent, while total private economy payrolls increased 5.2 percent.

Medical Prices

Medical prices, as measured by the CPI-U (urban consumers), grew 3.5 percent between the first quarter of 1998 and the first quarter of 1999 (Figure 5). The annualized growth for each of the past two quarters had also been 3.5 percent, nearly a percentage point faster than the recent trough in medical price growth of 2.6 percent reached in the fourth quarter of 1997. By comparison, the growth in the CPI for all items less energy has remained essentially flat, at about 2.1 percent between the fourth quarter of 1997 and the first quarter of 1999. If declining energy prices over this period were included, this divergence would be even more significant. Growth in the PPI for health services has also accelerated over the past year.

The faster growth in medical prices appears to be the result of two major factors. First, drug price growth has accelerated rapidly in the past year. Second, hospital prices also grew faster in recent quarters. This acceleration in price growth for drugs and hospital services exceeded the slowdown in growth of nursing home and home health care services prices. Each of these trends is discussed in detail in the next few sections.

Prescription Drug Prices

As shown in Figure 6, growth in the CPI for prescription drugs continued its recent acceleration in the first quarter of 1999. Between the fourth quarter of 1997 and first quarter of 1999, consumer prescription drug price growth has increased from a 1.9 percent to a 5.5-percent growth rate, when compared with the same period 1 year earlier. Much of this acceleration is attributable to rapid increases in prices of several top-selling brands of prescription drugs for allergies, diabetes, acne, and arthritis.

The PPI for ethical (prescription) preparations shows a much faster acceleration in growth than the CPI over the past year. The large magnitude of the acceleration can be traced specifically to large increases in psychotherapeutic drug prices in the first half of 1998 because of sampling variability. However, even excluding psychotherapeutics, the PPI for prescription drugs still increased in the 5- to 6-percent range for 1998, compared with approximately 3 percent for 1997. Given the unusually large increase in this index for 1998, overall PPI prescription drug price growth should continue to decelerate in 1999 until it reaches a more stable level.

Hospital Services, Wages, and Prices

Both the producer and consumer prices for hospital services accelerated in the first quarter of 1999, continuing the recent trend. For each of these indexes, the acceleration has been in both inpatient and outpatient price growth.

An analysis of average hourly earnings (AHE) for private hospital workers provides some insight into why output prices (those measured by the CPI and PPI) are increasing faster in current quarters. As shown in Figure 7, growth in the AHE for private hospital workers has increased from 2.8 percent in the second quarter of 1998 to 3.5 percent in the first quarter of 1999. The Employment Cost Index (ECI) for hospital workers (part of the occupational wage blend used in the HCFA PPS [prospective payment system] Hospital Input Price Index) has also exhibited a similar pattern over this period. The deceleration in the HCFA PPS Hospital Input Price Index over this period is attributable in part to the slowdown in growth of the PPI for prescription drugs following the tremendous increases of 1998, as described in the previous section.

Nursing Home Services Wages and Prices

Unlike that for hospitals, nursing home price growth has been constant or decelerating for the past four quarters. As Figure 8 shows, this seems to reflect the decelerating growth of hourly earnings in nursing homes and the relatively constant growth of input prices as measured by the HCFA SNF input price index. Standard & Poor's DRI projects the HCFA SNF input price index to continue to grow at similar rates over the next few quarters, despite the deceleration in AHE. This is because the HCFA SNF input price index reflects a constant skill mix of workers by using the ECI. The deceleration in the AHE for nursing homes (which does not hold skill mix constant) implies a shift to less skilled, lower paid workers. Part of this may be the result of the new PPS for Medicare SNF services mandated by the Balanced Budget Act (BBA) of 1997. It has been claimed by the industry that the payment system is forcing nursing homes to turn away more complex cases because the payment rates do not reflect the costs of providing these services (Hilzenroth, 1999). Growth in the public sector PPI for nursing homes is now at its lowest point since its introduction, decelerating from 4.7-percent annual growth in the fourth quarter of 1998 to 3.9 percent in the first quarter of 1999.

Home Health Care Services, Wages, and Prices

The BBA, as well as Medicare fraud and abuse initiatives, appear to have had a significant impact on home health wages and prices. The significance is caused by Medicare's large portion of total home health expenditures. Although input cost growth has remained stable over the past four quarters, home health care prices, as measured by the PPI, have decelerated from 2.9 percent in the second quarter of 1998 to 0.3 in the first quarter of 1999 (Figure 9). The Medicare portion of this index has decelerated from 2.3 to -0.6 percent over this same period. Yet an analysis of hourly earnings for home health care workers shows a dramatic acceleration in growth. Because payrolls and employment have declined dramatically in home health care agencies (Figure 4), the implication is that lower skill positions are being eliminated, causing a higher average hourly wage that is accelerating.

Overall, the deceleration in price growth and the declines in employment seem to support reports that many home health agencies have cut back on services not covered by Medicare or have closed or merged with other agencies in response to changes in Medicare policies and payments (U.S. General Accounting Office, 1998, 1999). With a PPS scheduled to be implemented on October 1, 2000, the industry may continue to be transformed over the next year.

Background Information on Data Sources and Methods

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 1997, include all non-Federal, short-term general, and other special hospitals open to the public. They exclude hospital units of institutions; psychiatric facilities; tuberculosis, other respiratory, and chronic disease hospitals; institutions for the mentally retarded; and alcohol and chemical-dependency hospitals.

The survey 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, 1963-98). In Tables 1 and 2, statistics covering expenses, utilization, beds, and personnel depict trends in the operation of community hospitals annually for 1994 to 1997 and quarterly from 1995 through the third quarter 1998, after which data collection was discontinued.

Table 1. Selected Community Hospital Statistics: 1994-1998¹.

Item	Calendar Year				1995 Q3	1995 Q4	1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3

	1994	1995	1996	1997
Utilization
All Ages
Admissions in Thousands	32,938	33,389	33,268	33,388	8,213	8,260	8,511	8,267	8,159	8,331	8,500	8,342	8,265	8,281	8,640	8,326	8,361
Admissions per 1,000 Population²	122	122	121	120	120	121	124	120	118	121	123	120	119	119	124	119	119
Inpatient Days in Thousands	196,117	190,377	183,495	181,313	46,239	46,467	48,051	45,532	44,349	45,563	47,177	45,177	44,193	44,766	47,553	44,607	44,545
Adult Length of Stay in Days	6.0	5.7	5.5	5.4	5.6	5.6	5.6	5.5	5.4	5.5	5.5	5.4	5.3	5.4	5.5	5.4	5.3
65 Years of Age or Over
Admissions in Thousands	12,456	12,820	12,870	13,050	3,071	3,184	3,324	3,204	3,090	3,252	3,374	3,253	3,173	3,250	3,479	3,260	3,193
Admissions per 1,000 Population²	368	375	373	375	359	371	386	372	357	375	389	374	364	373	398	373	365
Inpatient Days in Thousands	94,877	91,164	86,431	85,315	21,507	22,056	22,972	21,445	20,448	21,566	22,661	21,179	20,431	21,044	22,941	20,859	20,295
Adult Length of Stay in Days	7.6	7.1	6.7	6.5	7.0	6.9	6.9	6.7	6.6	6.6	6.7	6.5	6.4	6.5	6.6	6.4	6.4
Under 65 Years of Age
Admissions in Thousands	20,483	20,569	20,398	20,339	5,143	5,077	5,187	5,063	5,070	5,078	5,126	5,089	5,092	5,032	5,162	5,066	5,168
Admissions per 1,000 Population²	87	86	85	84	86	85	86	84	84	84	85	84	84	82	84	83	84
Inpatient Days in Thousands	101,240	99,213	97,064	95,999	24,732	24,411	25,078	24,087	23,902	23,997	24,516	23,999	23,762	23,722	24,712	23,748	24,251
Adult Length of Stay in Days	4.9	4.8	4.8	4.7	4.8	4.8	4.8	4.8	4.7	4.7	4.8	4.7	4.7	4.7	4.8	4.7	4.7
Surgical Operations in Thousands	23,286	23,739	24,165	24,601	5,832	5,915	5,948	6,087	6,028	6,102	6,047	6,245	6,197	6,111	6,200	6,405	6,461
Outpatient Visits in Thousands	417,684	452,558	481,298	507,523	113,332	114,438	116,335	119,874	122,232	122,857	123,270	127,607	128,285	128,361	131,411	135,812	138,222
Adjusted Patient Days in Thousands³	276,209	273,638	270,023	275,864	67,079	67,106	69,232	67,394	66,247	67,087	70,050	68,813	68,258	68,682	72,261	69,196	70,246
Number of Beds in Thousands	891	874	854	833	871	867	862	859	849	844	842	832	829	830	829	827	825
Adult Occupancy Rate⁴	60.3	59.7	58.7	59.6	57.7	58.2	61.2	58.3	56.8	58.7	62.3	59.7	57.9	58.7	63.8	59.3	58.7
Total Hospital Revenues in Millions⁵	$309,354	$324,961	$338,118	$349,329	$80,307	$81,842	$84,280	$84,396	$83,449	$85,993	$86,941	$87,073	$87,092	$88,223	$91,024	$89,187	$89,695
Total Patient Revenues in Millions	293,285	307,228	318,183	327,938	75,956	77,238	79,710	79,349	78,461	80,664	81,998	81,781	81,441	82,717	85,391	83,583	84,102
Inpatient Revenues in Millions	208,262	213,771	216,242	215,558	52,358	53,483	55,322	53,609	52,526	54,784	55,223	53,692	52,728	53,914	56,194	53,882	53,331
Outpatient Revenues in Millions	85,023	93,457	101,941	112,380	23,599	23,755	24,387	25,740	25,934	25,880	26,774	28,090	28,713	28,803	29,197	29,701	30,770
Total Expenses
Total Hospital Expenses in Millions	292,801	308,411	320,789	331,482	76,808	78,594	79,361	79,958	79,593	81,877	82,092	82,694	82,835	83,862	85,251	86,155	86,169
Labor in Millions	156,826	163,842	168,796	173,047	40,857	41,688	41,873	41,935	41,925	43,063	42,888	42,958	43,326	43,875	44,502	44,576	44,812
Non-Labor in Millions	135,975	144,569	151,993	158,435	35,951	36,906	37,488	38,023	37,668	38,814	39,204	39,735	39,509	39,986	40,749	41,580	41,357
Inpatient Expense in Millions⁶	207,897	214,570	217,994	217,869	52,945	54,421	55,081	54,020	53,284	55,608	55,287	54,291	53,631	54,660	56,102	55,540	54,643
Amount per Patient Day	1,060	1,127	1,188	1,202	1,145	1,171	1,146	1,186	1,201	1,220	1,172	1,202	1,214	1,221	1,180	1,245	1,227
Amount per Admission	6,312	6,426	6,553	6,525	6,446	6,588	6,472	6,534	6,530	6,675	6,504	6,508	6,489	6,600	6,493	6,671	6,535
Outpatient Expense in Millions⁶	84,903	93,841	102,796	113,614	23,863	24,172	24,281	25,937	26,309	26,269	26,805	28,403	29,204	29,201	29,149	30,615	31,527
Amount per Outpatient Visit	203	207	214	224	211	211	209	216	215	214	217	223	228	227	222	225	228

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

Admissions per 1,000 population is calculated using population estimates prepared by the Social Security Administration.

Adjusted patient days is an aggregate figure reflecting the number of days of inpatient care, plus an estimate of the volume of outpatient services, expressed in units equivalent to an inpatient day in terms of level of effort. It is derived by multiplying the number of outpatient visits by the ratio of outpatient revenue per outpatient visit to inpatient revenue per inpatient day, and adding the product to the number of inpatient days

⁴

The adult occupancy rate is calculated by the National Health Statistics Group, Office of the Actuary, Health Care Financing Administration. The AHA does not publish this statistic. Adult occupancy rate is the ratio of average daily census to average number of beds maintained during the reporting period.

⁵

Total hospital revenue is the sum of total patient revenue and all other operating revenue. Total patient revenue is the sum of inpatient revenue and outpatient revenue.

⁶

Inpatient expense and outpatient expense are calculated by the National Health Statistics Group, Office of the Actuary, Health Care Financing Administration. These statistics are calculated by applying the ratio of inpatient or outpatient revenue to total patient revenue multiplied by total hospital expenses.

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

SOURCE: American Hospital Association; Trend Analysis Group: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1995-September 1998.

Table 2. Percent Change in Selected Community Hospital Statistics: 1994-1998.

Item	Calendar Year				1995 Q3	1995 Q4	1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3

	1994	1995	1996	1997

	Annual Percent Change				Percent Change from the Same Period of Previous Year
Utilization
All Ages
Admissions in Thousands	0.9	1.4	-0.4	0.4	0.7	0.3	-1.4	-0.2	-0.7	0.9	-0.1	0.9	1.3	-0.6	1.6	-0.2	1.2
Admissions per 1,000 Population	-0.1	0.4	-1.3	-0.6	-0.2	-0.6	-2.3	-1.1	-1.6	-0.1	-1.1	0.0	0.4	-1.5	0.7	-1.1	0.3
Inpatient Days in Thousands	-2.9	-2.9	-3.6	-1.2	-3.0	-3.4	-4.6	-3.7	-4.1	-1.9	-1.8	-0.8	-0.4	-1.7	0.8	-1.3	0.8
Adult Length of Stay in Days	-3.8	-4.2	-3.3	-1.5	-3.7	-3.7	-3.2	-3.6	-3.5	-2.8	-1.7	-1.7	-1.6	-1.2	-0.8	-1.1	-0.4
65 Years of Age or Over
Admissions in Thousands	2.0	2.9	0.4	1.4	1.6	1.9	-1.6	0.5	0.6	2.2	1.5	1.5	2.7	-0.1	3.1	0.2	0.7
Admissions per 1,000 Population	0.8	1.8	-0.5	0.6	0.6	0.9	-2.6	-0.4	-0.3	1.2	0.6	0.7	1.9	-0.7	2.5	-0.4	0.1
Inpatient Days in Thousands	-2.2	-3.9	-5.2	-1.3	-5.0	-4.9	-7.3	-6.0	-4.9	-2.2	-1.4	-1.2	-0.1	-2.4	1.2	-1.5	-0.7
Adult Length of Stay in Days	-4.2	-6.6	-5.6	-2.7	-6.5	-6.7	-5.8	-6.5	-5.5	-4.3	-2.8	-2.7	-2.7	-2.3	-1.8	-1.7	-1.3
Under 65 Years of Age
Admissions in Thousands	0.2	0.4	-0.8	-0.3	0.2	-0.7	-1.3	-0.6	-1.4	0.0	-1.2	0.5	0.4	-0.9	0.7	-0.5	1.5
Admissions per 1,000 Population	-0.7	-0.5	-1.7	-1.2	-0.7	-1.5	-2.2	-1.5	-2.3	-0.9	-2.1	-0.4	-0.5	-1.8	-0.3	-1.4	0.6
Inpatient Days in Thousands	-3.6	-2.0	-2.2	-1.1	-1.2	-2.0	-2.0	-1.6	-3.4	-1.7	-2.2	-0.4	-0.6	-1.1	0.8	-1.0	2.1
Adult Length of Stay in Days	-3.8	-2.4	-1.3	-0.8	-1.4	-1.3	-0.7	-1.0	-2.0	-1.7	-1.1	-0.9	-1.0	-0.2	0.1	-0.6	0.6
Surgical Operations in Thousands	2.5	1.9	1.8	1.8	-0.1	-0.1	-1.3	2.1	3.4	3.2	1.7	2.6	2.8	0.2	2.5	2.6	4.3
Outpatient Visits in Thousands	7.0	8.3	6.4	5.4	5.9	5.7	4.7	5.4	7.9	7.4	6.0	6.5	5.0	4.5	6.6	6.4	7.7
Adjusted Patient Days in Thousands	-1.0	-0.9	-1.3	2.2	-0.9	-1.8	-2.8	-1.1	-1.2	0.0	1.2	2.1	3.0	2.4	3.2	0.6	2.9
Number of Beds in Thousands	-1.2	-1.8	-2.4	-2.4	-1.9	-2.1	-2.1	-2.1	-2.6	-2.6	-2.4	-3.1	-2.3	-1.7	-1.6	-0.7	-0.6
Adult Occupancy Rate¹	-1.1	-0.7	-0.9	0.9	-0.6	-0.8	-2.3	-1.0	-0.9	0.4	1.0	1.4	1.1	0.0	1.5	-0.4	0.8
Total Hospital Revenues in Millions	4.9	5.0	4.0	3.3	4.2	3.6	3.0	4.2	3.9	5.1	3.2	3.2	4.4	2.6	4.7	2.4	3.0
Total Patient Revenues in Millions	4.6	4.8	3.6	3.1	4.0	3.4	2.9	3.6	3.3	4.4	2.9	3.1	3.8	2.5	4.1	2.2	3.3
Inpatient Revenues in Millions	2.5	2.6	1.2	-0.3	1.9	1.8	1.0	0.9	0.3	2.4	-0.2	0.2	0.4	-1.6	1.8	0.4	1.1
Outpatient Revenues in Millions	10.1	9.9	9.1	10.2	9.1	7.3	7.5	9.9	9.9	8.9	9.8	9.1	10.7	11.3	9.0	5.7	7.2
Operating Expenses
Total in Millions	5.0	5.3	4.0	3.3	4.5	4.7	4.1	4.2	3.6	4.2	3.4	3.4	4.1	2.4	3.8	4.2	4.0
Labor in Millions	4.7	4.5	3.0	2.5	3.7	3.8	3.3	2.9	2.6	3.3	2.4	2.4	3.3	1.9	3.8	3.8	3.4
Non-Labor in Millions	5.3	6.3	5.1	4.2	5.6	5.8	4.9	5.7	4.8	5.2	4.6	4.5	4.9	3.0	3.9	4.6	4.7
Inpatient Expense in Millions	2.9	3.2	1.6	-0.1	2.4	3.1	2.1	1.4	0.6	2.2	0.4	0.5	0.6	-1.7	1.5	2.3	1.9
Amount per Patient Day	6.0	6.3	5.4	1.1	5.5	6.7	7.1	5.3	4.9	4.2	2.2	1.3	1.0	0.0	0.7	3.6	1.1
Amount per Admission	2.0	1.8	2.0	-0.4	1.7	2.8	3.6	1.6	1.3	1.3	0.5	-0.4	-0.6	-1.1	-0.2	2.5	0.7
Outpatient Expense	10.5	10.5	9.5	10.5	9.7	8.7	8.8	10.5	10.2	8.7	10.4	9.5	11.0	11.2	8.7	7.8	8.0
Amount per Outpatient Visit	3.2	2.0	3.0	4.8	3.6	2.8	3.9	4.8	2.2	1.2	4.2	2.9	5.8	6.4	2.0	1.3	0.2

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Change in rate, rather than percent change.

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

SOURCE: American Hospital Association; Trend Analysis Group: National Hospital Panel Survey Reports. Chicago. Monthly reports for January 1995-September 1998.

For purposes of national health expenditures (NHE), survey statistics on revenues are analyzed in estimating the growth in the largest component of health care costs—community hospital expenditures. This one segment of NHE accounted for 30 percent of all health spending in 1997 (Braden et al., 1998). 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.

Medicare Trust Fund Operations

Separate trust funds finance the operations of the two parts of the Medicare program (Table 3). The HI program, or Medicare Part A, helps pay for inpatient hospital, home health, SNF, and hospice care for the aged and disabled. The HI program is financed primarily by payroll taxes paid by workers and employers. The taxes paid each year are used mainly to pay benefits for current beneficiaries. The Supplementary Medical Insurance (SMI) program, or Medicare Part B, pays for physician, outpatient hospital, home health, and other services for the aged and disabled. The SMI program is financed primarily by transfers from the general fund of the U.S. Treasury and by monthly premiums paid by beneficiaries. For both Medicare programs, income not currently needed to pay benefits and related expenses is held in the HI and SMI trust funds and invested in U.S. Treasury securities (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999; Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund, 1999).

Table 3. Hospital Insurance and Supplementary Medical Insurance (SMI) Trust Fund Operations: 1995-1999.

Indicator	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998
Total Medicare Outlays In Millions of Dollars	$184,203	$200,337	$213,600	$213,228	$47,456	$49,642	$50,599	$52,639	$50,084	$53,696	$53,922	$55,897	$50,818	$53,692	$53,165	$55,553	$48,626
Hospital Insurance Trust Fund	117,604	129,929	139,475	133,671	31,288	32,160	32,615	33,866	33,407	35,307	35,208	35,552	30,526	33,942	35,230	33,973	30,834
SMI Trust Fund	66,599	70,408	74,125	79,557	16,168	17,482	17,984	18,773	16,677	18,389	18,714	20,345	20,292	19,750	17,935	21,580	17,792
Hospital Insurance Trust Fund Operations: In Millions of Dollars
Income	115,027	124,603	130,107	140,546	26,293	37,000	27,840	33,470	29,535	36,644	28,852	35,075	31,551	41,080	30,496	37,419	34,678
Outlays	117,604	129,929	139,475	133,671	31,288	32,160	32,615	33,866	33,407	35,307	35,208	35,552	30,526	33,942	35,230	33,973	30,834
Difference	(2,577)	(5,325)	(9,368)	6,875	(4,995)	4,840	(4,774)	(396)	(3,873)	1,337	(6,356)	(477)	1,025	7,138	(4,734)	3,446	3,844
Assets at End of Period¹	130,267	124,942	115,573	122,448	125,272	130,112	125,338	124,942	121,069	122,406	116,050	115,573	116,598	123,736	119,002	122,448	126,292
SMI Trust Fund Operations: In Millions of Dollars
Income	60,306	85,609	81,924	87,712	26,596	19,653	19,208	20,152	19,906	20,855	19,893	21,270	19,803	20,998	19,884	27,027	15,389
Outlays	66,599	70,408	74,125	79,557	16,168	17,482	17,984	18,773	16,677	18,389	18,714	20,345	20,292	19,750	17,935	21,580	17,792
Difference	(6,293)	15,202	7,799	8,155	10,428	2,171	1,224	1,378	3,229	2,466	1,179	925	(489)	1,248	1,949	5,447	(2,403)
Assets at End of Period¹	13,130	28,332	36,131	44,286	23,558	25,729	26,953	28,332	31,561	34,027	35,206	36,131	35,642	56,640	76,524	103,551	118,940
	Annual Percent Change				Percent Change from the Same Period of Previous Year
Total Medicare Outlays	11.7	8.8	6.6	-0.2	7.0	6.2	8.7	13.0	5.5	8.2	6.6	6.2	1.5	0.0	-1.4	-0.6	-4.3
Hospital Insurance Trust Fund	12.5	10.5	7.3	-4.2	9.3	5.4	11.7	15.8	6.8	9.8	8.0	5.0	-8.6	-3.9	0.1	-4.4	1.0
SMI Trust Fund	10.4	5.7	5.3	7.3	2.9	7.8	3.6	8.4	3.1	5.2	4.1	8.4	21.7	7.4	-4.2	6.1	-12.3
Hospital Insurance Trust Fund Operations
Income	5.0	8.3	4.4	8.0	4.3	4.0	14.8	11.6	12.3	-1.0	3.6	4.8	6.8	12.1	5.7	6.7	9.9
Outlays	12.5	10.5	7.3	-4.2	9.3	5.4	11.7	15.8	6.8	9.8	8.0	5.0	-8.6	-3.9	0.1	-4.4	1.0
Assets at End of Period	-1.9	-4.1	-7.5	5.9	-3.2	-3.2	-3.2	-4.1	-3.4	-5.9	-7.4	-7.5	-3.7	1.1	2.5	5.9	8.3
SMI Trust Fund Operations
Income	8.5	42.0	-4.3	7.1	61.4	14.3	90.7	21.6	-25.2	6.1	3.6	5.5	-0.5	0.7	0.0	27.1	-22.3
Outlays	10.4	5.7	5.3	7.3	2.9	7.8	3.6	8.4	3.1	5.2	4.1	8.4	21.7	7.4	-4.2	6.1	-12.3
Assets at End of Period	-32.4	115.8	27.5	22.6	16.7	21.6	94.3	115.8	34.0	32.2	30.6	27.5	12.9	66.5	117.4	186.6	233.7

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

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

SOURCES: U.S. Department of the Treasury, Financial Management Service: Monthly Treasury Statement of Receipts and Outlays of the United States Government. (Board of Trustees of the Hospital Insurance Trust Fund, 1999; Board of Trustees of the Supplementary Medical Insurance Trust Fund, 1999); Office of the Actuary, Health Care Financing Administration.

Data on the financial operations of the Medicare trust funds, the HI Trust Fund and the SMI Trust Fund, are available from two sources. The monthly statistics on trust fund operations are published in the Monthly Treasury Statement of Receipts and Outlays of the United States Government, Table 8: Trust Fund Impact on Budget Results and Investment Holding (U.S. Department of the Treasury, 1998). The 1999 annual reports of the HI and SMI trust funds (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1999; Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund, 1999) contain a detailed accounting of all financial operations for the prior fiscal year. The reports also contain actuarial analysis of the expected operations of the trust funds in future years and analysis of the actuarial status of the funds.

Table 8. Index Levels of Medical Prices: 1995-1999.

Type of Establishment	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998
Consumer Price Indexes, All Urban Consumers¹
Medical Care Services²	224.2	232.4	239.1	246.8	230.1	231.5	233.3	234.7	237.0	238.4	239.7	241.2	244.0	245.9	248.0	249.3	252.3
Professional Services	201.0	208.3	215.4	222.2	205.9	207.5	209.2	210.7	213.2	215.1	216.2	217.1	219.5	221.8	223.3	224.4	226.7
Physician Services	208.8	216.4	222.9	229.5	214.3	215.8	217.1	218.3	220.8	222.8	223.7	224.2	226.6	228.8	230.8	231.7	233.7
Dental Services	206.8	216.5	226.6	236.2	212.5	215.1	218.0	220.5	223.4	225.8	227.6	229.6	232.6	235.1	237.3	239.7	243.7
Hospital and Related Services	257.8	269.5	278.4	287.5	266.1	267.7	271.0	273.1	276.3	277.2	278.8	281.3	284.6	285.7	289.0	290.8	295.7
Hospital Services (12/96 = 100)	—	—	101.7	105.0	—	—	—	—	101.0	101.3	101.8	102.7	103.9	104.3	105.5	106.2	108.0
Inpatient Hospital Services (12/96 = 100)	—	—	101.3	104.0	—	—	—	—	100.8	101.0	101.5	102.1	103.1	103.3	104.4	105.0	106.7
Outpatient Hospital Services (12/86 = 100)	204.6	215.1	224.9	233.2	211.7	213.9	216.5	218.1	222.6	223.7	225.4	227.7	230.0	231.6	234.4	236.7	241.1
Nursing Home Services (12/96 = 100)	—	—	102.3	107.1	—	—	—	—	101.0	101.8	102.9	103.5	105.5	106.7	107.8	108.2	110.0
Medical Care Commodities	204.5	210.4	215.3	221.8	208.4	209.9	211.1	212.1	213.8	215.6	215.6	216.1	218.2	221.3	223.1	224.8	226.8
Prescription Drugs	235.0	242.9	249.3	258.6	240.1	242.3	243.7	245.3	247.6	249.8	249.6	250.1	253.3	257.6	260.6	263.0	267.2
Non-Prescription Drugs and Medical Supplies (1986 = 100)	140.5	143.1	145.4	147.7	142.5	142.9	143.6	143.6	144.5	145.4	145.8	146.1	146.5	147.7	148.0	148.6	147.8
Internal and Respiratory Over-the-Counter Drugs	167.0	170.2	173.1	175.4	169.3	169.5	170.6	171.3	172.4	173.3	173.3	173.4	173.2	175.6	176.4	176.4	174.8
Non-Prescription Medical Equipment and Supplies	166.3	169.1	171.5	174.9	168.7	169.3	169.8	168.8	169.7	171.2	172.2	173.1	175.1	174.5	173.9	176.0	176.5
Producer Price Indexes³
Industry Groupings⁴
Health Services (12/94 = 100)	102.4	104.6	106.1	107.7	104.1	104.4	104.7	105.2	105.8	105.9	106.2	106.3	107.1	107.5	107.9	108.3	109.2
Offices and Clinics of Doctors of Medicine (12/93 = 100)	106.8	107.6	109.0	111.3	107.4	107.5	107.5	107.9	108.7	108.8	109.3	109.2	110.7	111.2	111.5	112.0	113.2
Medicare Treatments (12/93 = 100)	109.6	105.5	105.8	110.5	105.5	105.5	105.5	105.5	105.8	105.8	105.8	105.8	110.5	110.5	110.5	110.5	113.2
Non-Medicare Treatments (12/93 = 100)	105.9	107.8	109.6	111.4	107.5	107.7	107.8	108.2	109.2	109.4	109.9	109.8	110.6	111.2	111.6	112.2	113.1
Hospitals (12/92 = 100)	110.0	112.6	113.6	114.4	112.2	112.3	112.7	113.4	113.5	113.6	113.5	113.5	114.0	114.2	114.4	115.0	115.7
General Medical and Surgical Hospitals (12/92 =100)	109.9	112.5	113.6	114.6	112.2	112.2	112.5	113.2	113.4	113.4	113.8	113.8	114.1	114.4	114.6	115.2	115.8
Inpatient Treatments (12/92 = 100)	109.2	111.8	112.8	113.6	111.5	111.6	111.6	112.4	112.5	112.5	113.2	113.0	113.3	113.4	113.6	114.1	114.8
Medicare Patients (12/92 = 100)	104.7	108.1	108.8	108.1	107.8	107.8	107.8	109.1	109.1	109.1	109.1	108.0	108.0	108.0	108.0	108.4	108.4
Medicaid Patients (12/92 = 100)	109.8	112.2	110.9	110.2	111.7	112.5	111.9	112.5	110.7	110.0	111.4	111.5	110.9	110.6	109.6	109.7	109.8
All Other Patients (12/92 = 100)	111.7	113.7	115.6	117.8	113.6	113.4	113.6	114.2	114.8	115.1	116.0	116.3	117.0	117.4	118.1	118.8	120.0
Outpatient Treatments (12/92 = 100)	113.3	116.2	117.4	118.6	115.6	115.8	116.6	117.0	117.4	117.5	117.1	117.5	118.0	118.4	118.6	119.3	120.0
Medicare Patients (12/92 = 100)	111.2	113.1	116.1	118.8	112.3	112.5	113.4	114.4	115.3	115.9	116.7	116.4	117.4	118.3	119.0	120.6	122.2
Medicaid Patients (12/92 = 100)	106.4	106.1	105.0	105.9	107.1	107.1	105.9	104.4	104.8	104.9	105.0	105.2	105.2	105.3	105.3	107.8	107.8
All Other Patients (12/92 = 100)	114.2	117.7	118.8	119.8	116.9	117.1	118.1	118.6	119.0	119.0	118.4	118.9	119.3	119.7	119.9	120.2	120.7
Skilled and Intermediate Care Facilities (12/94 = 100)	103.6	110.0	114.7	119.6	108.2	109.5	110.7	111.6	113.3	113.9	115.5	116.1	117.7	118.6	120.6	121.4	122.5
Public Payers (12/94 = 100)	103.8	110.5	115.4	120.4	108.6	110.1	111.2	112.1	113.7	114.4	116.3	117.0	118.4	119.0	121.5	122.6	123.1
Private Payers (12/94 = 100)	103.6	109.8	114.3	119.1	108.2	109.1	110.4	111.4	113.3	113.8	114.9	115.4	117.4	118.7	120.0	120.3	122.4
Medical Laboratories (6/94 = 100)	104.0	105.3	106.1	106.4	105.3	105.2	105.3	105.3	105.8	106.1	106.2	106.2	106.3	106.5	106.4	106.4	106.2
Home Health Care Services (12/96 = 100)	—	—	103.4	106.2	—	—	—	—	101.6	103.4	103.7	104.7	105.7	106.4	106.3	106.6	106.0
Medicare Payers (12/96 = 100)	—	—	102.2	103.6	—	—	—	—	101.5	101.5	102.5	103.1	103.2	103.8	103.2	104.3	102.5
Non-Medicare Payers (12/96 = 100)	—	—	100.3	103.0	—	—	—	—	100.2	100.0	99.9	101.2	102.6	103.1	103.2	103.0	103.1
Commodity Groupings
Drugs and Pharmaceuticals	210.9	214.7	219.1	242.6	213.8	214.6	215.2	215.2	218.1	218.2	219.2	221.0	229.8	244.5	247.4	248.7	251.1
Ethical (Prescription) Preparations	257.0	265.4	273.5	322.9	262.5	265.1	266.8	267.0	271.0	272.5	273.6	276.8	295.3	328.3	332.9	335.3	337.2
Proprietary (Over-the-Counter) Preparations	186.6	185.1	184.8	184.5	188.3	184.5	183.3	184.2	186.1	183.9	184.3	184.9	184.7	184.3	184.4	184.7	185.3
Medical, Surgical, and Personal Aid Devices	141.3	143.1	143.1	143.4	143.5	143.4	142.6	142.7	142.9	143.2	143.2	143.1	143.3	143.0	143.3	144.0	144.2
Personal Aid Equipment	133.7	139.3	140.3	143.4	136.8	139.8	140.2	140.3	140.3	140.4	139.4	141.1	142.0	143.9	143.9	143.9	146.6
Medical Instruments and Equipment (6/82 = 100)	128.3	130.1	128.1	126.7	130.3	130.1	129.7	130.1	127.8	128.1	128.6	127.8	127.0	126.4	126.6	126.9	127.3
Surgical Appliances and Supplies (6/83 = 100)	154.8	156.9	158.8	160.6	157.4	158.1	156.3	155.8	158.5	158.9	158.6	159.2	160.7	160.1	160.3	161.3	161.3
Ophthalmic Goods (12/83 = 100)	122.2	120.3	119.8	119.6	122.2	119.7	119.8	119.5	120.4	119.9	119.4	119.5	119.2	119.1	119.6	120.7	120.2
Dental Equipment and Supplies (6/85 = 100)	137.5	141.0	146.6	151.2	140.7	140.7	141.0	141.7	145.9	146.5	146.8	147.0	148.8	150.8	152.1	153.0	153.7

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Unless otherwise noted, base year is 1982-1984 = 100.

Includes the net cost of private health insurance, not shown separately.

Unless otherwise noted, base year is 1982 = 100. Producer Price Indexes are classified by industry (price changes received for the industry's output sold outside the industry) and commodity (price changes by similarity of end-use or material composition).

⁴

Further detail for Producer Price Industry groupings, such as types of physician practices, hospital diagnosis-related groups, are available from the Bureau of Labor Statistics.

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

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

Private Health Sector: Employment, Hours, and Earnings

The Bureau of Labor Statistics (BLS) collects monthly information on employment for all workers, and employment, earnings, and work hours for non-supervisory workers in a sample of approximately 305,000 establishments. Data are collected through cooperative agreements with State agencies that also use this information to create State and local area statistics. The survey is designed to collect industry-specific information on wage and salary jobs in non-agricultural industries. It excludes statistics on self-employed persons and on those employed in the military (U.S. Department of Labor, 1998a).

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 holds 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, which includes discouraged workers.) Once each year, monthly establishment-based employment statistics are adjusted to benchmarks created from annual establishment census information, resulting in revisions to previously published employment estimates. Tables 4, 5, and 6 present statistics on employment, non-supervisory employment, average weekly hours, and average hourly earnings for the private non-farm business sector and industries in health services.

Table 4. Employment, Hours, and Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Type of Establishment	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998
Total Employment in Thousands
Non-Farm Private Sector	97,885	100,189	103,133	106,007	97,534	100,073	101,379	101,769	100,362	103,027	104,261	104,882	103,432	105,972	107,129	107,495	105,879
Health Services	9,230	9,478	9,703	9,846	9,364	9,451	9,521	9,576	9,607	9,684	9,739	9,781	9,779	9,831	9,872	9,901	9,896
Offices and Clinics of Physicians	1,609	1,678	1,739	1,803	1,649	1,672	1,692	1,700	1,712	1,732	1,747	1,765	1,773	1,792	1,815	1,832	1,840
Offices and Clinics of Dentists	592	611	629	646	601	608	614	619	623	628	631	634	636	643	649	655	657
Nursing Homes	1,691	1,730	1,756	1,762	1,713	1,725	1,740	1,745	1,742	1,753	1,764	1,767	1,760	1,763	1,765	1,760	1,750
Private Hospitals	3,772	3,812	3,860	3,926	3,794	3,806	3,818	3,829	3,836	3,852	3,870	3,883	3,893	3,917	3,943	3,952	3,952
Home Health Care Services	629	675	710	672	654	671	679	694	701	713	714	714	692	678	660	656	646
Non-Supervisory Employment in Thousands
Non-Farm Private Sector	80,125	82,092	84,541	86,762	79,667	82,022	83,167	83,512	82,071	84,505	85,556	86,032	84,495	86,762	87,754	88,035	86,418
Health Services	8,178	8,405	8,599	8,724	8,303	8,381	8,442	8,492	8,512	8,585	8,632	8,668	8,668	8,713	8,749	8,765	8,762
Offices and Clinics of Physicians	1,314	1,377	1,428	1,486	1,351	1,372	1,389	1,396	1,404	1,423	1,435	1,450	1,462	1,478	1,498	1,506	1,513
Offices and Clinics of Dentists	517	535	550	563	527	534	538	543	545	549	552	553	555	561	565	570	574
Nursing Homes	1,526	1,559	1,579	1,585	1,543	1,554	1,567	1,570	1,567	1,576	1,586	1,588	1,583	1,586	1,588	1,581	1,572
Private Hospitals	3,450	3,489	3,537	3,598	3,471	3,484	3,496	3,507	3,513	3,529	3,547	3,560	3,568	3,590	3,614	3,620	3,621
Home Health Care Services	582	624	655	618	605	621	628	642	646	657	657	657	638	624	608	604	595
Average Weekly Hours
Non-Farm Private Sector	34.5	34.4	34.6	34.6	33.9	34.4	34.8	34.6	34.3	34.6	34.9	34.8	34.4	34.5	34.8	34.7	34.2
Health Services	32.8	32.7	33.0	33.1	32.5	32.6	32.8	32.8	32.9	33.0	33.1	33.1	33.2	33.0	33.1	33.0	32.9
Offices and Clinics of Physicians	32.5	32.9	33.2	33.0	32.6	32.8	32.9	33.2	33.2	33.2	33.1	33.3	33.3	32.9	32.8	32.9	32.7
Offices and Clinics of Dentists	28.0	28.2	28.4	28.3	27.9	28.2	28.2	28.4	28.4	28.6	28.2	28.5	28.4	28.2	28.3	28.3	27.9
Nursing Homes	32.5	32.4	32.4	32.6	32.2	32.3	32.7	32.3	32.3	32.3	32.7	32.5	32.4	32.4	32.9	32.6	32.2
Private Hospitals	34.5	34.4	34.9	35.0	34.4	34.3	34.3	34.4	34.6	34.8	34.9	35.1	35.2	34.9	34.9	34.9	34.9
Home Health Care Services	28.6	28.1	28.9	29.0	27.7	27.8	28.3	28.3	28.6	28.9	29.0	29.1	29.2	29.0	29.1	28.9	28.8
Average Hourly Earnings
Non-Farm Private Sector	$11.43	$11.81	$12.28	$12.78	$11.69	$11.74	$11.82	$12.01	$12.15	$12.18	$12.27	$12.51	$12.65	$12.70	$12.78	$12.98	$13.11
Health Services	12.45	12.85	13.26	13.73	12.74	12.78	12.87	13.01	13.13	13.17	13.29	13.46	13.57	13.65	13.77	13.91	14.05
Offices and Clinics of Physicians	12.54	13.17	13.79	14.31	12.95	13.08	13.22	13.44	13.61	13.67	13.83	14.03	14.19	14.26	14.29	14.50	14.62
Offices and Clinics of Dentists	12.40	12.88	13.63	14.16	12.69	12.77	12.92	13.17	13.46	13.58	13.62	13.85	13.98	14.08	14.18	14.39	14.53
Nursing Homes	8.77	9.01	9.34	9.77	8.95	8.95	9.02	9.10	9.20	9.26	9.40	9.51	9.63	9.71	9.82	9.90	10.01
Private Hospitals	14.30	14.70	15.03	15.46	14.62	14.63	14.73	14.81	14.91	14.94	15.05	15.22	15.28	15.36	15.54	15.67	15.82
Home Health Care Services	10.91	11.18	11.35	11.49	11.11	11.13	11.22	11.28	11.36	11.29	11.33	11.40	11.40	11.41	11.53	11.63	11.81
Hospital Employment in Thousands
Total	5,069	5,067	5,077	5,132	5,068	5,068	5,066	5,065	5,060	5,069	5,085	5,092	5,096	5,121	5,152	5,160	5,164
Private	3,772	3,812	3,860	3,926	3,794	3,806	3,818	3,829	3,836	3,852	3,870	3,883	3,893	3,917	3,943	3,952	3,952
Federal	233	232	224	223	234	233	231	229	225	224	225	224	224	224	224	221	221
State	395	376	360	348	385	378	372	368	366	362	358	354	349	347	348	348	349
Local	669	648	632	635	656	651	646	640	633	631	632	631	631	633	637	640	642

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

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

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

Table 5. Percent Change in Employment, Hours, and Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Type of Establishment	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998

	Annual Percent Change				Percent Change from the Same Period of Previous Year
Total Employment in Thousands
Non-Farm Private Sector	3.0	2.4	2.9	2.8	2.0	2.3	2.5	2.6	2.9	3.0	2.8	3.1	3.1	2.9	2.8	2.5	2.4
Health Services	2.7	2.7	2.4	1.5	2.7	2.8	2.7	2.6	2.6	2.5	2.3	2.1	1.8	1.5	1.4	1.2	1.2
Offices and Clinics of Physicians	4.1	4.3	3.6	3.7	4.5	4.6	4.4	3.8	3.8	3.6	3.3	3.8	3.6	3.5	3.9	3.8	3.8
Offices and Clinics of Dentists	3.3	3.1	3.0	2.7	2.9	3.0	3.0	3.3	3.6	3.1	2.8	2.4	2.2	2.5	2.9	3.3	3.3
Nursing Homes	2.6	2.3	1.5	0.3	2.5	2.6	2.2	1.9	1.7	1.6	1.4	1.3	1.1	0.6	0.1	-0.4	-0.6
Private Hospitals	0.2	1.0	1.3	1.7	0.9	1.0	1.0	1.2	1.1	1.2	1.4	1.4	1.5	1.7	1.9	1.8	1.5
Home Health Care Services	12.4	7.3	5.3	-5.5	8.6	8.2	6.4	6.3	7.2	6.3	5.1	2.8	-1.3	-4.9	-7.5	-8.1	-6.6
Non-Supervisory Employment in Thousands
Non-Farm Private Sector	3.2	2.5	3.0	2.6	2.1	2.4	2.6	2.7	3.0	3.0	2.9	3.0	3.0	2.7	2.6	2.3	2.3
Health Services	2.7	2.8	2.3	1.4	2.8	2.9	2.7	2.7	2.5	2.4	2.2	2.1	1.8	1.5	1.4	1.1	1.1
Offices and Clinics of Physicians	4.2	4.8	3.7	4.1	5.0	5.1	4.8	4.2	3.9	3.8	3.3	3.8	4.2	3.8	4.4	3.9	3.5
Offices and Clinics of Dentists	3.2	3.5	2.7	2.3	3.3	3.7	3.5	3.7	3.4	2.8	2.6	2.0	1.8	2.0	2.4	3.0	3.5
Nursing Homes	2.6	2.2	1.3	0.3	2.5	2.4	2.1	1.7	1.5	1.4	1.2	1.1	1.0	0.6	0.1	-0.4	-0.7
Private Hospitals	0.3	1.1	1.4	1.7	1.1	1.1	1.1	1.3	1.2	1.3	1.5	1.5	1.6	1.7	1.9	1.7	1.5
Home Health Care Services	12.3	7.3	4.9	-5.5	8.6	8.0	6.3	6.3	6.8	5.9	4.7	2.4	-1.4	-5.1	-7.5	-8.1	-6.7
Average Weekly Hours
Non-Farm Private Sector	-0.6	-0.1	0.6	-0.1	-1.1	0.2	0.1	0.4	1.3	0.5	0.3	0.4	0.3	-0.3	-0.3	-0.3	-0.8
Health Services	-0.2	-0.3	1.1	0.2	-0.8	-0.3	-0.1	0.2	1.1	1.2	0.9	1.1	1.0	-0.1	0.1	-0.3	-1.1
Offices and Clinics of Physicians	0.2	1.3	1.0	-0.7	0.6	1.2	1.4	1.7	1.8	1.2	0.6	0.2	0.2	-0.8	-1.1	-1.2	-1.7
Offices and Clinics of Dentists	-0.6	0.6	1.0	-0.6	-0.6	0.7	1.6	0.8	2.0	1.4	0.0	0.6	-0.1	-1.4	0.2	-0.9	-1.9
Nursing Homes	0.5	-0.3	0.1	0.5	-0.2	0.2	-0.2	-0.9	0.2	-0.2	-0.1	0.6	0.4	0.3	0.8	0.3	-0.7
Private Hospitals	-0.3	-0.5	1.4	0.3	-0.9	-0.9	-0.5	0.1	0.7	1.5	1.7	1.8	1.6	0.4	-0.1	-0.6	-0.9
Home Health Care Services	1.2	-1.8	3.1	0.4	-3.4	-3.2	-1.2	0.7	3.2	3.8	2.5	2.8	2.0	0.3	0.1	-0.8	-1.4
Average Hourly Earnings
Non-Farm Private Sector	2.8	3.4	3.9	4.1	3.0	3.4	3.4	3.7	4.0	3.8	3.8	4.1	4.1	4.2	4.2	3.8	3.6
Health Services	2.9	3.2	3.2	3.5	3.1	3.4	3.3	3.1	3.0	3.1	3.2	3.5	3.4	3.6	3.6	3.3	3.6
Offices and Clinics of Physicians	2.3	5.0	4.7	3.8	4.0	5.1	5.6	5.5	5.1	4.5	4.6	4.4	4.2	4.3	3.4	3.3	3.0
Offices and Clinics of Dentists	3.6	3.9	5.8	3.9	3.6	3.4	4.0	4.5	6.1	6.4	5.5	5.2	3.8	3.7	4.1	3.9	3.9
Nursing Homes	3.2	2.7	3.7	4.5	2.7	2.4	2.7	2.9	2.8	3.4	4.2	4.5	4.6	4.9	4.5	4.1	3.9
Private Hospitals	3.4	2.8	2.3	2.9	3.1	3.3	2.7	2.0	2.0	2.1	2.2	2.7	2.5	2.8	3.2	2.9	3.5
Home Health Care Services	2.3	2.5	1.4	1.3	2.4	2.6	2.7	2.3	2.3	1.4	1.0	1.1	0.4	1.1	1.7	2.0	3.6
Hospital Employment in Thousands
Total	-0.1	0.0	0.2	1.1	0.1	0.0	-0.2	-0.1	-0.2	0.0	0.4	0.5	0.7	1.0	1.3	1.3	1.3
Private	0.2	1.0	1.3	1.7	0.9	1.0	1.0	1.2	1.1	1.2	1.4	1.4	1.5	1.7	1.9	1.8	1.5
Federal	-0.2	-0.6	-3.2	-0.6	1.7	0.3	-2.6	-1.9	-4.1	-3.7	-2.6	-2.2	-0.5	0.0	-0.6	-1.3	-1.3
State	-2.9	-4.9	-4.2	-3.3	-4.6	-4.6	-5.2	-5.4	-5.0	-4.4	-3.7	-3.9	-4.5	-4.1	-2.9	-1.6	0.0
Local	-0.6	-3.1	-2.5	0.5	-2.6	-3.0	-3.3	-3.4	-3.4	-3.1	-2.1	-1.3	-0.4	0.3	0.8	1.4	1.7

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

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

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

Table 6. Percent Change in Implied Non-Supervisory Payrolls, Employment, Average Weekly Hours, and Average Hourly Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Type of Establishment	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998

	Annual Percent Change				Percent Change from the Same Period of Previous Year
Health Services
Payrolls	5.5	5.8	6.7	5.2	5.1	6.0	6.0	6.1	6.8	6.9	6.5	6.8	6.3	5.1	5.1	4.2	3.5
Employment	2.7	2.8	2.3	1.4	2.8	2.9	2.7	2.7	2.5	2.4	2.2	2.1	1.8	1.5	1.4	1.1	1.1
Average Weekly Hours	-0.2	-0.3	1.1	0.2	-0.8	-0.3	-0.1	0.2	1.1	1.2	0.9	1.1	1.0	-0.1	0.1	-0.3	-1.1
Average Hourly Earnings	2.9	3.2	3.2	3.5	3.1	3.4	3.3	3.1	3.0	3.1	3.2	3.5	3.4	3.6	3.6	3.3	3.6
Offices and Clinics of Physicians
Payrolls	6.8	11.4	9.6	7.2	9.8	11.8	12.3	11.8	11.2	9.8	8.8	8.6	8.8	7.4	6.7	6.0	4.8
Employment	4.2	4.8	3.7	4.1	5.0	5.1	4.8	4.2	3.9	3.8	3.3	3.8	4.2	3.8	4.4	3.9	3.5
Average Weekly Hours	0.2	1.3	1.0	-0.7	0.6	1.2	1.4	1.7	1.8	1.2	0.6	0.2	0.2	-0.8	-1.1	-1.2	-1.7
Average Hourly Earnings	2.3	5.0	4.7	3.8	4.0	5.1	5.6	5.5	5.1	4.5	4.6	4.4	4.2	4.3	3.4	3.3	3.0
Offices and Clinics of Dentists
Payrolls	6.3	8.2	9.7	5.7	6.3	8.0	9.3	9.2	12.0	10.9	8.2	7.8	5.6	4.3	6.9	6.1	5.5
Employment	3.2	3.5	2.7	2.3	3.3	3.7	3.5	3.7	3.4	2.8	2.6	2.0	1.8	2.0	2.4	3.0	3.5
Average Weekly Hours	-0.6	0.6	1.0	-0.6	-0.6	0.7	1.6	0.8	2.0	1.4	0.0	0.6	-0.1	-1.4	0.2	-0.9	-1.9
Average Hourly Earnings	3.6	3.9	5.8	3.9	3.6	3.4	4.0	4.5	6.1	6.4	5.5	5.2	3.8	3.7	4.1	3.9	3.9
Nursing Homes
Payrolls	6.5	4.6	5.3	5.4	5.0	5.2	4.6	3.6	4.6	4.6	5.4	6.3	6.1	5.9	5.4	4.0	2.5
Employment	2.6	2.2	1.3	0.3	2.5	2.4	2.1	1.7	1.5	1.4	1.2	1.1	1.0	0.6	0.1	-0.4	-0.7
Average Weekly Hours	0.5	-0.3	0.1	0.5	-0.2	0.2	-0.2	-0.9	0.2	-0.2	-0.1	0.6	0.4	0.3	0.8	0.3	-0.7
Average Hourly Earnings	3.2	2.7	3.7	4.5	2.7	2.4	2.7	2.9	2.8	3.4	4.2	4.5	4.6	4.9	4.5	4.1	3.9
Private Hospitals
Payrolls	3.3	3.4	5.2	5.0	3.3	3.5	3.4	3.5	3.9	5.0	5.5	6.2	5.8	5.0	5.1	4.1	4.1
Employment	0.3	1.1	1.4	1.7	1.1	1.1	1.1	1.3	1.2	1.3	1.5	1.5	1.6	1.7	1.9	1.7	1.5
Average Weekly Hours	-0.3	-0.5	1.4	0.3	-0.9	-0.9	-0.5	0.1	0.7	1.5	1.7	1.8	1.6	0.4	-0.1	-0.6	-0.9
Average Hourly Earnings	3.4	2.8	2.3	2.9	3.1	3.3	2.7	2.0	2.0	2.1	2.2	2.7	2.5	2.8	3.2	2.9	3.5
Home Health Care Services
Payrolls	16.2	8.1	9.7	-4.0	7.5	7.3	7.9	9.5	12.7	11.6	8.3	6.4	1.0	-3.7	-5.8	-7.0	-4.7
Employment	12.3	7.3	4.9	-5.5	8.6	8.0	6.3	6.3	6.8	5.9	4.7	2.4	-1.4	-5.1	-7.5	-8.1	-6.7
Average Weekly Hours	1.2	-1.8	3.1	0.4	-3.4	-3.2	-1.2	0.7	3.2	3.8	2.5	2.8	2.0	0.3	0.1	-0.8	-1.4
Average Hourly Earnings	2.3	2.5	1.4	1.3	2.4	2.6	2.7	2.3	2.3	1.4	1.0	1.1	0.4	1.1	1.7	2.0	3.6
Non-Farm Private Sector
Payrolls	5.5	5.8	7.7	6.6	4.0	6.1	6.2	6.9	8.5	7.4	7.1	7.7	7.5	6.7	6.5	5.9	5.2
Employment	3.2	2.5	3.0	2.6	2.1	2.4	2.6	2.7	3.0	3.0	2.9	3.0	3.0	2.7	2.6	2.3	2.3
Average Weekly Hours	-0.6	-0.1	0.6	-0.1	-1.1	0.2	0.1	0.4	1.3	0.5	0.3	0.4	0.3	-0.3	-0.3	-0.3	-0.8
Average Hourly Earnings	2.8	3.4	3.9	4.1	3.0	3.4	3.4	3.7	4.0	3.8	3.8	4.1	4.1	4.2	4.2	3.8	3.6

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

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

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

National Economic Indicators

National economic indicators provide a context for understanding health-specific indicators and how change in the health sector relates to change in the economy as a whole. Table 7 presents national indicators of output and inflation.

Table 7. Selected National Economic Indicators: 1995-1999.

Type of Establishment	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998
Gross Domestic Product
Billions of Dollars	7,270	7,662	8,111	8,511	7,495	7,629	7,703	7,818	7,955	8,063	8,171	8,255	8,384	8,441	8,538	8,681	8,800
Billions of 1992 Chain-Weighted Dollars	6,762	6,995	7,270	7,552	6,882	6,984	7,020	7,093	7,167	7,237	7,311	7,365	7,465	7,499	7,567	7,678	7,755
Implicit Price Deflator (1992 = 100.0)	107.5	109.5	111.6	112.7	108.9	109.2	109.7	110.2	111.0	111.4	111.8	112.1	112.3	112.6	112.8	113.1	113.5
Personal Income
Personal Income in Billions	6,072	6,426	6,784	7,126	6,284	6,390	6,479	6,550	6,667	6,744	6,821	6,905	7,004	7,082	7,161	7,258	7,351
Disposable Income in Billions	5,277	5,535	5,795	6,028	5,435	5,497	5,577	5,630	5,711	5,768	5,822	5,879	5,937	5,989	6,052	6,133	6,215
Prices¹
Consumer Price Index, All Items	152.4	156.9	160.5	163.0	155.0	156.5	157.4	158.5	159.6	160.2	160.8	161.5	161.9	162.8	163.4	164.0	164.6
All Items Less Medical Care	148.6	152.8	156.3	158.6	151.0	152.5	153.3	154.4	155.5	156.0	156.7	157.2	157.5	158.4	159.0	159.5	160.1
Energy	105.2	110.1	111.5	102.9	105.3	112.0	111.9	111.3	112.5	110.7	112.6	110.2	103.6	103.8	103.9	100.2	97.9
Food and Beverages	148.9	153.7	157.7	161.1	151.6	152.8	154.3	156.2	157.0	157.1	158.0	158.9	160.1	160.5	161.3	162.5	163.8
Medical Care	220.5	228.2	234.6	242.1	226.0	227.4	229.1	230.4	232.6	234.1	235.1	236.4	239.1	241.4	243.4	244.7	247.5
Producer Price Index² Finished
Consumer Goods	125.6	129.5	130.2	128.9	127.4	129.3	130.2	131.2	130.7	129.9	130.2	130.1	128.2	128.8	129.2	129.4	129.5
Energy	78.1	83.2	83.4	75.1	78.8	84.2	84.7	85.1	84.9	82.5	84.2	81.8	75.9	76.1	75.9	72.7	71.1
Food	129.0	133.6	134.5	134.3	131.1	132.1	134.9	136.1	134.4	134.5	134.5	134.7	133.4	133.7	135.1	135.0	134.7
Finished Goods Except Food and Energy	141.9	144.3	145.1	147.7	144.0	144.2	144.0	145.0	145.2	145.0	144.4	145.8	146.3	147.3	147.4	149.9	151.4
	Annual Percent Change				Percent Change from the Same Period of Previous Year
Gross Domestic Product
Billions of Dollars	4.6	5.4	5.9	4.9	4.5	5.8	5.5	5.8	6.1	5.7	6.1	5.6	5.4	4.7	4.5	5.2	5.0
Billions of 1992 Chain-Weighted Dollars	2.3	3.4	3.9	3.9	2.4	3.9	3.5	3.9	4.1	3.6	4.1	3.8	4.2	3.6	3.5	4.2	3.9
Implicit Price Deflator (1992 = 100.0)	2.3	1.9	1.9	1.0	2.0	1.9	1.8	1.8	1.9	2.0	1.8	1.7	1.2	1.0	0.9	0.9	1.1
Personal Income
Personal Income in Billions	5.5	5.8	5.6	5.0	5.1	6.0	6.3	5.9	6.1	5.5	5.3	5.4	5.1	5.0	5.0	5.1	5.0
Disposable Income in Billions	5.1	4.9	4.7	4.0	4.3	5.0	5.3	4.9	5.1	4.9	4.4	4.4	4.0	3.8	4.0	4.3	4.7
Prices¹
Consumer Price Index, All Items	2.8	2.9	2.3	1.6	2.7	2.8	2.9	3.2	2.9	2.3	2.2	1.9	1.5	1.6	1.6	1.5	1.7
All Items Less Medical Care	2.7	2.9	2.3	1.4	2.7	2.8	2.9	3.1	3.0	2.3	2.2	1.8	1.3	1.5	1.5	1.4	1.6
Energy	0.6	4.6	1.3	-7.7	1.6	5.2	4.4	7.5	6.8	-1.1	0.6	-1.0	-8.0	-6.3	-7.7	-9.0	-5.4
Food and Beverages	2.8	3.3	2.6	2.1	2.5	2.8	3.6	4.2	3.5	2.8	2.4	1.7	2.0	2.2	2.1	2.3	2.3
Medical Care	4.5	3.5	2.8	3.2	3.8	3.7	3.4	3.1	2.9	3.0	2.6	2.6	2.8	3.1	3.5	3.5	3.5
Producer Price Index² Finished
Consumer Goods	1.9	3.1	0.5	-1.0	2.3	2.9	3.4	3.8	2.6	0.5	-0.1	-0.8	-1.9	-0.8	-0.7	-0.5	1.0
Energy	1.4	6.5	0.2	-9.8	2.8	5.2	6.6	11.5	7.7	-2.0	-0.6	-4.0	-10.6	-7.8	-9.9	-11.0	-6.3
Food	1.8	3.5	0.7	-0.2	2.2	3.2	4.5	4.1	2.5	1.8	-0.3	-1.0	-0.7	-0.6	0.4	0.2	1.0
Finished Goods Except Food and Energy	2.1	1.7	0.5	1.8	2.3	1.8	1.6	0.9	0.8	0.6	0.3	0.5	0.8	1.6	2.1	2.9	3.5

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Base period = 1982-1984, unless otherwise noted.

Formerly called the “Wholesale Price Index.”

NOTES: Q designates quarter of year. Unlike Tables 1-5, quarterly data on gross domestic product, personal income, and disposable personal income are seasonally adjusted at annual rates.

SOURCES: U.S. Department of Commerce, Bureau of Economic Analysis: Survey of Current Business. Washington. U.S. Government Printing Office. Monthly reports for January 1995-March 1999; U.S. Department of Labor, Bureau of Labor Statistics.

Gross domestic product (GDP) measures the output of the U.S. economy as the market value of goods and services produced within the geographic boundaries of the United States by U.S. or foreign citizens or companies. Constant dollar or “real” GDP removes the effects of price changes from the valuation of goods and services produced, so that the growth of real GDP reflects changes in the “physical quantity” of the output of the economy. In the most recent comprehensive revision of the National Income and Product Accounts, the method for removing the effects of price changes was altered. The GDP estimates are now deflated using “chain-weighted” price indexes. This method replaces the previous fixed-weight method of deflating the GDP estimates (U.S. Department of Commerce, 1996, 1998).

Prices

Consumer Price Indexes

BLS publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services. Tables 7, 8, and 9 present information on the all-urban CPI that measures changes in prices faced by 87 percent of the non-institutionalized U.S. population. The more restrictive wage-earner CPI gauges prices faced by wage earners and clerical workers. These workers account for approximately 32 percent of the non-institutionalized population (U.S. Department of Labor, 1998b).

Table 9. Percent Change in Medical Prices from Same Period a Year Ago: 1995-1999.

Type of Establishment	Calendar Year				1996 Q1	1996 Q2	1996 Q3	1996 Q4	1997 Q1	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1

	1995	1996	1997	1998

	Annual Change				Percent Change from the Same Period of Previous Year
Consumer Price Indexes, All Urban Consumers¹
Medical Care Services²	5.0	3.7	2.9	3.2	4.1	3.8	3.5	3.2	3.0	3.0	2.7	2.8	2.9	3.1	3.5	3.4	3.4
Professional Services	4.4	3.7	3.4	3.2	3.8	3.7	3.5	3.6	3.6	3.7	3.4	3.1	3.0	3.1	3.3	3.3	3.2
Physician Services	4.5	3.6	3.0	3.0	4.2	3.7	3.3	3.2	3.0	3.3	3.0	2.7	2.6	2.7	3.2	3.3	3.1
Dental Services	4.9	4.7	4.7	4.2	4.2	4.6	4.9	5.1	5.2	4.9	4.4	4.1	4.1	4.1	4.3	4.4	4.8
Hospital and Related Services	5.0	4.5	3.3	3.3	4.7	4.7	4.6	4.2	3.8	3.5	2.9	3.0	3.0	3.0	3.6	3.4	3.9
Hospital Services (12/96 = 100)	—	—	—	—	—	—	—	—	—	—	—	—	2.9	3.0	3.6	3.3	3.9
Inpatient Hospital Services (12/96 = 100)	—	—	—	—	—	—	—	—	—	—	—	—	2.3	2.3	2.9	2.8	3.5
Outpatient Hospital Services (12/86 = 100)	4.9	5.1	4.6	3.7	5.0	5.7	5.4	4.4	5.2	4.6	4.1	4.4	3.3	3.5	4.0	3.9	4.8
Nursing Home Services (12/96 = 100)	—	—	—	—	—	—	—	—	—	—	—	—	4.4	4.8	4.8	4.5	4.3
Medical Care Commodities	1.9	2.9	2.3	3.0	2.4	3.1	3.2	2.9	2.6	2.7	2.1	1.9	2.0	2.6	3.5	4.0	4.0
Prescription Drugs	1.9	3.3	2.6	3.8	2.9	3.6	3.5	3.3	3.1	3.1	2.4	1.9	2.3	3.1	4.4	5.2	5.5
Non-Prescription Drugs and Medical Supplies (1986 = 100)	1.8	1.9	1.6	1.6	1.5	2.0	2.3	1.7	1.4	1.8	1.5	1.7	1.4	1.6	1.5	1.7	0.9
Internal and Respiratory Over-the-Counter Drugs	0.6	1.9	1.7	1.3	1.3	2.1	1.9	2.4	1.8	2.2	1.6	1.3	0.5	1.3	1.8	1.7	0.9
Non-Prescription Medical Equipment and Supplies	3.9	1.7	1.4	2.0	1.7	1.8	2.8	0.6	0.6	1.1	1.4	2.5	3.2	2.0	1.0	1.7	0.8
Producer Price Indexes³
Industry Groupings⁴
Health Services (12/94 = 100)	—	2.2	1.4	1.5	2.5	2.4	2.1	1.8	1.6	1.5	1.5	1.0	1.3	1.4	1.6	1.9	1.9
Offices and Clinics of Doctors of Medicine (12/93 = 100)	3.9	0.7	1.3	2.1	1.0	0.7	0.4	0.8	1.3	1.2	1.6	1.2	1.8	2.1	2.0	2.5	2.2
Medicare Treatments (12/93 = 100)	4.7	-3.7	0.3	4.4	-3.7	-3.7	-3.7	-3.7	0.3	0.3	0.3	0.3	4.4	4.4	4.4	4.4	2.4
Non-Medicare Treatments (12/93 = 100)	3.6	1.8	1.7	1.6	1.9	1.5	1.6	2.0	1.6	1.6	2.0	1.5	1.3	1.6	1.5	2.1	2.3
Hospitals (12/92 = 100)	3.5	2.4	0.8	0.7	2.7	2.7	2.5	1.8	1.2	1.2	0.8	0.1	0.4	0.5	0.8	1.3	1.5
General Medical and Surgical Hospitals (12/92 = 100)	3.7	2.4	1.0	0.8	2.9	2.8	2.3	1.5	1.1	1.1	1.2	0.6	0.7	0.8	0.7	1.2	1.5
Inpatient Treatments (12/92 = 100)	3.1	2.3	0.9	0.7	2.8	2.8	2.3	1.4	0.8	0.9	1.4	0.5	0.7	0.8	0.4	1.0	1.4
Medicare Patients (12/92 = 100)	2.0	3.3	0.6	-0.7	4.1	4.1	4.1	1.2	1.2	1.2	1.2	-1.0	-1.0	-1.0	-1.0	0.4	0.4
Medicaid Patients (12/92 = 100)	2.5	2.2	-1.1	-0.7	2.1	2.6	2.4	1.7	-0.9	-2.2	-0.5	-0.9	0.2	0.5	-1.6	-1.6	-1.0
All Other Patients (12/92 = 100)	3.7	1.8	1.7	1.9	2.3	2.0	1.4	1.4	1.1	1.5	2.2	1.9	1.9	2.0	1.8	2.1	2.6
Outpatient Treatments (12/92 = 100)	6.2	2.6	1.0	1.0	3.3	2.9	2.2	1.9	1.6	1.5	0.5	0.5	0.5	0.8	1.3	1.5	1.6
Medicare Patients (12/92 = 100)	4.0	1.7	2.6	2.4	1.9	1.3	1.4	2.3	2.7	3.0	2.9	1.8	1.9	2.0	2.0	3.5	4.0
Medicaid Patients (12/92 = 100)	2.9	-0.2	-1.1	0.9	1.3	1.2	0.1	-3.4	-2.1	-2.1	-0.8	0.8	0.4	0.3	0.3	2.5	2.5
All Other Patients (12/92 = 100)	6.9	3.0	1.0	0.8	3.7	3.4	2.6	2.4	1.8	1.6	0.3	0.3	0.3	0.6	1.3	1.1	1.1
Skilled and Intermediate Care Facilities (12/94 = 100)	—	6.1	4.3	4.3	6.1	6.5	6.2	5.7	4.7	4.0	4.3	4.1	3.9	4.1	4.5	4.6	4.1
Public Payers (12/94 = 100)	—	6.5	4.4	4.3	6.6	7.2	6.5	5.5	4.7	4.0	4.6	4.4	4.2	4.0	4.5	4.7	3.9
Private Payers (12/94 = 100)	—	5.9	4.1	4.2	5.9	5.8	6.0	6.0	4.7	4.2	4.0	3.6	3.6	4.4	4.4	4.3	4.3
Medical Laboratories (6/94 = 100)	—	1.3	0.8	0.3	3.7	1.8	-0.6	0.3	0.5	0.9	0.9	0.9	0.4	0.3	0.2	0.2	-0.1
Home Health Care Services (12/96 = 100)	—	—	—	2.8	—	—	—	—	—	—	—	—	4.0	2.9	2.4	1.8	0.3
Medicare Payers (12/96 = 100)	—	—	—	1.4	—	—	—	—	—	—	—	—	1.6	2.3	0.6	1.1	-0.6
Non-Medicare Payers (12/96 = 100)	—	—	—	2.7	—	—	—	—	—	—	—	—	2.5	3.1	3.3	1.7	0.5
Commodity Groupings
Drugs and Pharmaceuticals	2.4	1.8	2.1	10.7	2.5	2.0	1.9	0.8	2.0	1.7	1.9	2.7	5.4	12.0	12.8	12.5	9.3
Ethical (Prescription) Preparations	2.8	3.3	3.1	18.1	3.9	3.6	3.6	2.0	3.2	2.8	2.5	3.6	8.9	20.5	21.7	21.2	14.2
Proprietary (Over-the-Counter) Preparations	1.8	-0.8	-0.1	-0.1	1.5	-1.1	-1.8	-1.8	-1.2	-0.3	0.6	0.4	-0.7	0.2	0.1	-0.1	0.3
Medical, Surgical, and Personal Aid Devices	0.7	1.3	0.0	0.2	2.0	1.8	0.8	0.4	-0.4	-0.2	0.4	0.3	0.3	-0.1	0.0	0.6	0.6
Personal Aid Equipment	2.7	4.2	0.7	2.2	4.3	6.1	3.8	2.6	2.6	0.4	-0.6	0.6	1.2	2.5	3.2	2.0	3.2
Medical Instruments and Equipment (6/82 = 100)	1.3	1.4	-1.5	-1.1	2.0	1.6	0.8	1.1	-1.9	-1.5	-0.9	-1.7	-0.7	-1.4	-1.5	-0.7	0.2
Surgical Appliances and Supplies (6/83 = 100)	-0.6	1.4	1.2	1.1	2.0	2.6	1.1	-0.3	0.7	0.5	1.5	2.2	1.4	0.7	1.1	1.3	0.4
Ophthalmic Goods (12/83 = 100)	2.2	-1.6	-0.4	-0.1	0.4	-1.8	-2.5	-2.5	-1.5	0.1	-0.3	0.0	-1.0	-0.7	0.2	1.0	0.9
Dental Equipment and Supplies (6/85 = 100)	1.7	2.5	3.9	3.2	3.2	2.0	2.8	2.2	3.6	4.1	4.1	3.8	2.0	3.0	3.6	4.0	3.3

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Unless otherwise noted, base year is 1982-1984 = 100.

Includes the net cost of private health insurance, not shown separately.

⁴

Further detail for Producer Price Industry groupings, such as types of physician practices, hospital diagnosis-related groups, etc., are available from the Bureau of Labor Statistics.

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

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

The index reflects changes in prices charged for the same quality and quantity of goods or services purchased in the base period. For most items, the base period of 1982-1984 is used to define the share of consumer expenditures purchasing specific services and products. Those shares or weights remain constant in all years, even though consumption patterns of the household may change over time. This type of index is called a fixed-weight or Laspeyres index.

CPIs for health care goods and services depict list price changes for out-of-pocket expenditures. The CPI for medical care services also includes an indirect measure of price change for health insurance coverage purchased directly by consumers. The composite CPI for medical care weights together product-specific or service-specific CPIs in proportion to household out-of-pocket expenditures for these items. In addition, some medical care sector indexes measure changes in list or charged prices, rather than in prices actually received by providers after discounts are deducted. In several health care areas, received or transaction prices are difficult to capture, although BLS is making advances in this area.

In the NHE, a combination of CPIs for selected medical care items, input price indexes for nursing homes, and the PPI for hospitals are used as measures of inflation for the health industry. The indexes are used to develop a chain-weighted price index for personal health care to depict price changes affecting the entire health care industry more accurately than does the overall CPI medical care index (Levit et al., 1998).

Producer Price Indexes

BLS produces monthly information on average changes in selling prices received by domestic producers for their output. These prices are presented in Tables 7, 8, and 9 as the PPI. The index is designed to measure transaction prices and is different from the CPI, which in some cases measures list or full-charge prices. The PPI is a fixed-weight or Laspeyres index, with base-period weights determined by values of receipts. The base period varies among series.

The PPI consists of indexes in several major classification structures, including the industry and commodity classifications that are included in the Health Care Indicators. The PPI by industry classification measures price changes received for the industry's output sold outside the industry. PPI changes for an industry are determined by price changes for products primarily made by establishments in that industry. The industry into which an establishment is classified is determined by those products accounting for the largest share of its total value of shipments. The PPI by commodity classification measures price changes of the end product (end use or material composition). The classification system for PPI commodity groups is unique to the PPI and is divided into 15 major commodity groupings.

Although PPIs for medical commodities have existed for many years, PPIs for health service industries are relatively new. Most index series began in 1994, and the index series for the composite health services industry does not begin until December 1994. However, the PPI for hospitals began in December 1992, providing enough data for a useful time series. The PPI for hospitals is a measure of transaction prices or net prices received by the producer from out-of-pocket, Medicare, Medicaid, and private third-party payer sources. The PPI for hospitals should not be compared with the CPI for hospital and related services. Although other PPI and CPI series are somewhat comparable (for example, the PPI-Offices and Clinics of Doctors of Medicine and the CPI-Physicians' Services), the PPI and CPI for hospitals have important differences in survey scope and methodology. The PPI for hospitals measures price changes for the entire treatment path, measures net transaction price, includes Medicare and Medicaid, samples both urban and rural hospitals, and reflects total hospital revenue from all sources in its index weights. On the other hand, the CPI for hospitals measures price changes for a discrete sample of hospital services singly, measures published charges, excludes Medicare and Medicaid, samples only urban hospitals, and reflects only consumer out-of-pocket expenses and household health insurance premium payments in its index weights. These differences make a direct comparison between the PPI and CPI hospital services indexes inappropriate.

The PPI for the health services industry is available by detailed industry groupings. For example, general medical and surgical hospitals consist of inpatient and outpatient treatments, which in turn consist of Medicare, Medicaid, and all other patients. These patient categories consist of more detail, such as diagnosis-related groups (DRGs) for Medicare. Although most of the data used to measure PPI price changes for health services are collected through a sample, there are specific instances where data are collected from both a sample and from price changes in Federal regulation. This is the case for Medicare hospital inpatient services and Medicare offices and clinics of doctors of medicine. The producer price changes in Medicare hospital inpatient services are computed from a combination of a national sample of DRGs in hospitals, DRG relative weights from the PPS final rules published in the current and historical year, and other adjustments. The producer price changes in Medicare offices of doctors of medicine are computed from a combination of a geographic area sample of payments under the HCFA Common Procedure Coding System (HCPCS), HCPCS updates from the November 2, 1998, Federal Register, and other adjustments. Because of different methodologies, these two Medicare PPIs are not comparable to the national updates computed by HCFA and published in the Federal Register.

Input Price Indexes

In 1979, HCFA developed the Medicare Hospital Input Price Index (hospital market basket), which was designed to measure the pure price changes associated with expenditure changes for hospital services. In the early 1980s, the SNF and Home Health Agency (HHA) Input Price Indexes, often referred to as “market baskets,” were developed to price a consistent set of goods and services over time. Also in the early 1980s, the original Medicare Hospital Input Price Index was revised for use in updating payment rates for routine costs of Medicare inpatient services. All of these indexes have played an important role in helping to set Medicare payment percent increases and in understanding the contribution of input price increases to growing health expenditures.

The Input Price Indexes, or market baskets, are Laspeyres or fixed-weight indexes that are constructed in two steps. First, a base period is selected. For example, for the PPS Hospital Input Price Index, the base period is 1992. Cost categories, such as food, fuel, and labor, are identified and their 1992 expenditure amounts determined. The proportion or share of total expenditures included in specific spending categories is calculated. These proportions are called cost or expenditure weights. There are 26 expenditure categories in the 1992-based PPS Hospital Input Price Index.

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

The Input Price Indexes are estimated on a historical basis and forecast for several years. The HCFA-chosen price proxies are forecast under contract with Standard and Poor's 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 10-12 are forecast and are expected to change as more recent historical data become available and subsequent quarterly forecasts are revised. The methodology and price proxy definitions used in the Input Price Indexes are described in the Federal Register notices that accompany the revisions of the PPS Hospital, HHA, and PPS SNF payment updates. A description of the current structure of the PPS Input Price Index is in the August 29, 1997, Federal Register, and the most recent PPS hospital update for payment rates was published in the July 31, 1998, Federal Register. The latest HHA regulatory Input Price Index was published in the August 11, 1998, Federal Register. The latest SNF input price index was published in the May 12, 1998, Federal Register.

Table 10. Quarterly Index Levels and Four-Quarter Moving Average Percent Change in the Prospective Payment System (PPS) Hospital Input Price Index, by Expense Category: 1997-2001.

Expense Category¹	Price/Wage Variable	Base Year Weights FY 1992²	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1	Forecast

											1999 Q2	1999 Q3	1999 Q4	2000 Q1	2000 Q2	2000 Q3	2000 Q4	2001 Q1
Index Levels
Total	—	100.000	114.2	115.1	115.9	116.7	117.9	118.9	119.3	119.9	120.9	122.0	122.8	123.6	124.3	125.3	126.1	127.0
Compensation	—	61.390	116.1	117.1	118.1	119.0	119.9	121.2	121.8	122.7	123.9	125.0	125.9	126.9	127.6	128.8	129.7	130.8
Wages and Salaries	HCFA Occupational Wage Index⁴	50.244	115.7	116.9	117.9	118.9	119.8	121.1	121.8	122.8	123.9	125.0	126.0	126.9	127.7	128.9	129.8	130.8
Employee Benefits	HCFA Occupational Benefits Index⁴	11.146	117.6	118.1	119.0	119.6	120.6	121.4	122.1	122.5	123.6	124.7	125.6	126.6	127.2	128.3	129.4	130.7
Other Professional Fees	ECI-W/S: Professional/Technical (Private)	2.127	117.3	117.9	118.9	119.8	120.9	122.2	123.0	123.3	124.5	125.7	126.6	127.7	128.6	129.8	130.7	131.9
Energy and Utilities³	—	1.542	109.3	113.6	111.3	109.0	109.8	113.4	109.6	109.3	110.5	114.3	112.0	112.6	112.8	116.7	114.0	114.9
Professional Liability Insurance	HCFA-Professional Liability Premium	1.189	96.1	95.9	96.0	96.1	96.2	96.4	96.8	97.5	97.9	98.1	98.1	97.8	97.8	98.0	98.3	98.6
All Other	—	33.752	111.5	112.1	112.5	113.4	115.1	115.5	115.6	116.0	116.7	117.5	118.3	118.9	119.5	120.0	120.7	121.5
Other Products³	—	24.825	110.5	110.8	111.0	112.0	114.0	114.2	114.1	114.2	114.8	115.6	116.2	116.7	117.2	117.4	118.0	118.6
Pharmaceuticals	PPI-Prescription Drugs	4.162	119.3	119.7	121.1	129.2	143.7	145.7	146.8	148.8	150.3	151.2	152.6	154.3	155.6	156.2	157.7	159.8
Food: Direct Purchase	PPI-Processed Foods	2.314	110.5	109.9	109.4	107.7	107.6	108.4	107.9	107.6	105.8	105.9	105.8	106.1	106.8	107.1	107.2	107.6
Food: Contract Service	CPI-Food Away from Home	1.072	111.6	112.3	113.2	113.8	114.5	115.3	116.0	116.9	117.7	118.6	119.7	120.8	121.7	122.8	123.8	124.7
Chemicals	PPI-Industrial Chemicals	3.666	115.3	115.9	115.7	114.0	111.7	110.3	109.2	108.3	108.7	110.6	111.2	111.0	110.8	110.5	111.3	111.1
Medical Instruments	PPI-Medical Instruments/Equipment	3.080	104.5	104.9	104.2	103.6	103.1	103.3	103.5	103.9	104.0	104.2	104.3	104.6	104.7	104.7	104.9	105.6
Rubber and Plastics	PPI-Rubber/Plastic Products	4.750	107.3	107.4	107.3	107.2	106.9	106.6	106.5	106.1	107.0	107.5	108.0	108.4	108.6	108.8	108.8	108.8
Paper Products	PPI-Converted Paper and Paperboard	2.078	109.2	109.3	111.6	113.6	113.3	113.3	112.1	111.5	112.9	115.0	115.9	116.6	117.2	118.1	119.2	120.0
Miscellaneous Products	PPI-Finished Goods	2.236	107.2	107.2	107.3	106.1	106.4	106.6	106.9	106.9	107.7	108.0	108.5	108.9	109.3	109.5	110.1	110.6
Other Services³	—	8.927	114.3	115.8	116.6	117.5	118.1	119.1	119.6	120.8	121.9	123.0	124.1	125.0	126.1	127.2	128.2	129.3
All Other: Labor-Intensive	ECI-Comp: Service Workers	7.277	115.0	116.9	117.8	118.8	119.4	120.6	121.2	122.5	123.8	124.9	126.2	127.2	128.4	129.7	130.8	131.9
Four-Quarter Moving-Average Percent Change
Total	—	100.000	2.1	2.0	2.1	2.3	2.6	2.9	3.0	3.0	2.9	2.7	2.7	2.8	2.9	2.9	2.8	2.7
Compensation	—	61.390	2.6	2.6	2.7	2.9	3.1	3.3	3.3	3.3	3.3	3.2	3.2	3.3	3.2	3.2	3.1	3.1
Wages and Salaries	HCFA Occupational Wage Index⁴	50.244	2.9	2.8	3.0	3.2	3.4	3.5	3.5	3.4	3.4	3.3	3.4	3.4	3.3	3.2	3.1	3.1
Employee Benefits	HCFA Occupational Benefits Index⁴	11.146	1.7	1.5	1.6	1.7	2.0	2.4	2.5	2.6	2.6	2.5	2.6	2.9	3.0	3.0	3.0	3.0
Other Professional Fees	ECI-W/S: Professional/Technical (Private)	2.127	2.7	2.6	2.6	2.8	3.0	3.2	3.3	3.3	3.3	3.1	2.9	3.1	3.2	3.3	3.4	3.3
Energy and Utilities³	—	1.542	2.6	2.3	2.0	0.7	0.6	0.3	-0.7	-0.2	-0.2	0.1	1.0	1.6	2.0	2.3	2.3	2.0
Professional Liability Insurance	HCFA-Professional Liability Premium	1.189	-1.1	-1.5	-1.8	-1.5	-1.0	-0.4	0.2	0.7	1.1	1.4	1.6	1.3	0.9	0.4	0.1	0.2
All Other	—	33.752	1.1	1.1	1.0	1.2	1.8	2.3	2.7	2.8	2.3	2.0	1.9	2.0	2.3	2.4	2.3	2.2
Other Products³	—	24.825	0.5	0.3	0.2	0.3	1.1	1.9	2.5	2.8	2.1	1.7	1.4	1.5	1.8	1.9	1.9	1.7
Pharmaceuticals	PPI-Prescription Drugs	4.162	2.9	2.6	3.1	4.5	9.0	13.7	18.1	19.5	15.1	10.6	6.6	4.0	3.8	3.6	3.5	3.4
Food: Direct Purchase	PPI-Processed Foods	2.314	3.7	1.8	0.5	-0.6	-1.6	-1.7	-1.8	-1.4	-1.1	-1.3	-1.5	-1.8	-1.2	-0.3	0.5	1.2
Food: Contract Service	CPI-Food Away From Home	1.072	2.9	2.9	2.8	2.7	2.6	2.6	2.6	2.6	2.6	2.7	2.9	3.0	3.2	3.4	3.4	3.4
Chemicals	PPI-Industrial Chemicals	3.666	0.0	0.3	-0.2	-1.3	-1.7	-2.8	-4.0	-4.6	-4.5	-3.3	-1.5	0.4	1.6	1.6	1.1	0.5
Medical Instruments	PPI-Medical Instruments/Equipment	3.080	-0.4	-0.8	-1.5	-1.2	-1.2	-1.3	-1.1	-0.8	-0.2	0.4	0.7	0.8	0.7	0.6	0.6	0.7
Rubber and Plastics	PPI-Rubber/Plastic Products	4.750	-0.7	-0.6	-0.5	-0.3	-0.4	-0.4	-0.5	-0.8	-0.6	-0.2	0.4	1.2	1.5	1.6	1.4	0.9
Paper Products	PPI-Converted Paper and Paperboard	2.078	-5.8	-4.9	-3.3	-1.3	0.8	2.3	2.5	1.5	0.4	-0.1	0.7	2.3	3.3	3.6	3.5	3.0
Miscellaneous Products	PPI-Finished Goods	2.236	2.1	1.3	0.4	-0.5	-0.8	-0.9	-0.9	-0.3	0.2	0.7	1.2	1.5	1.6	1.6	1.6	1.5
Other Services³	—	8.927	2.8	3.2	3.4	3.6	3.6	3.3	3.1	2.9	2.9	3.0	3.3	3.4	3.5	3.5	3.4	3.4
All Other: Labor-Intensive	ECI-Comp: Service Workers	7.277	2.9	3.5	3.8	4.1	4.2	3.8	3.5	3.3	3.2	3.3	3.6	3.8	3.8	3.9	3.8	3.7

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For data sources used to estimate the Input Price Index relative weights and choice of price proxies, refer to the August 29, 1997, Federal Register. For the most recent PPS update for payment rates, refer to the July 31, 1998, Federal Register.

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

Represents a subtotal. Detailed categories not shown are listed below by subtotal, detailed category, and base-year weight: Energy and Utilities: Fuel Oil, Coal, and Other Fuel (0.369), Electricity (0.927), and Water and Sewage (0.246). Other Products: Photographic Supplies (0.391), Apparel (0.869), and Machinery and Equipment (0.207). Other Services: Telephone (0.581), Postage (0.272), and Other Non-Labor Intensive (0.796).

⁴

The HCFA Occupational Wage and Occupational Benefit Indexes are computed as the weighted-average of 10 ECI categories (ECI for Hospital workers and 9 ECI occupational categories).

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

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

Table 12. Quarterly Index Levels and Four-Quarter Moving-Average Percent Change of the Home Health Agency (HHA) Input Price Index, by Expense Category: 1997-2001.

Expense Category¹	Price/Wage Variable	Base Year Weights FY 1993⁴	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1	Forecast

											1999 Q2	1999 Q3	1999 Q4	2000 Q1	2000 Q2	2000 Q3	2000 Q4	2001 Q1
Index Levels
Total	—	100.000	112.0	113.1	113.9	114.6	115.4	116.4	117.0	117.9	119.0	120.1	121.0	121.9	122.8	123.9	124.8	125.8
Compensation²	—	77.668	112.0	113.2	114.2	115.1	115.9	117.1	117.8	118.7	119.9	121.0	122.0	122.9	123.8	124.9	125.9	126.9
Wages and Salaries²	HHA Occupational Wage Index⁵	64.226	112.2	113.6	114.6	115.5	116.4	117.6	118.3	119.4	120.6	121.7	122.7	123.7	124.6	125.8	126.7	127.6
Employee Benefits²	HHA Occupational Benefits Index⁵	13.442	110.7	111.5	112.3	112.9	113.7	114.5	114.9	115.5	116.5	117.4	118.4	119.4	120.1	121.1	122.1	123.3
Operations and Maintenance	CPI(U)-Fuel and Other Utilities	0.832	107.8	109.4	108.4	106.0	106.8	108.4	105.2	104.6	105.7	107.1	107.0	107.4	107.9	109.4	109.2	109.7
Administrative and General³	—	9.569	113.3	114.1	114.5	115.2	116.0	116.8	117.0	117.9	118.7	119.5	120.0	121.0	121.8	122.7	123.3	124.6
Telephone	CPI(U)-Telephone Services	0.725	106.2	105.7	105.6	105.8	106.7	106.6	106.4	106.1	105.9	105.8	106.0	106.4	106.6	106.7	106.9	107.3
Paper and Printing	CPI(U)-Household Paper Products	0.529	114.4	114.2	114.6	115.6	116.6	116.7	117.3	117.4	117.1	116.3	116.0	116.6	116.9	117.0	117.2	117.4
Postage	CPI(U)-Postage	0.724	110.3	110.3	110.3	110.3	110.3	110.3	110.3	113.6	113.7	113.7	113.7	113.7	113.7	113.7	113.7	117.8
Other Administrative Costs³	CPI(U)-Services	7.591	114.2	115.3	115.7	116.6	117.4	118.4	118.7	119.5	120.5	121.5	122.2	123.4	124.3	125.4	126.2	127.4
Transportation	CPI(U)-Private Transportation	3.405	111.1	110.8	110.7	109.1	108.8	108.3	108.5	107.4	110.9	111.2	112.4	112.7	113.7	113.8	115.0	115.4
Capital-Related	—	3.204	110.2	111.0	111.5	112.0	112.3	112.8	113.4	113.8	114.4	115.1	115.8	116.6	117.3	118.1	118.8	119.7
Insurance	CPI(U)-Household Insurance	0.560	113.1	114.3	114.8	115.1	114.5	114.0	114.6	114.8	115.6	117.1	117.7	118.5	119.3	120.3	120.9	121.6
Fixed Capital	CPI(U)-Owner's Equivalent Rent	1.764	113.6	114.6	115.6	116.4	117.3	118.4	119.4	120.1	120.9	121.9	123.0	124.0	125.2	126.3	127.4	128.5
Movable Capital	PPI-Machinery and Equipment	0.880	101.8	101.6	101.3	101.2	100.9	100.7	100.6	100.7	100.5	100.3	100.2	100.3	100.3	100.3	100.4	100.7
Other Expenses³	CPI(U)-All Items less Food and Energy	5.322	112.1	112.4	113.1	113.9	114.6	115.1	115.7	116.4	117.4	118.3	119.2	120.3	121.2	122.1	123.1	124.3
Four-Quarter Moving-Average Percent Change
Total	—	100.000	2.7	2.8	2.9	2.9	3.0	3.0	2.9	2.9	2.9	2.9	3.1	3.3	3.3	3.3	3.2	3.1
Compensation²	—	77.668	2.8	2.9	3.1	3.3	3.4	3.5	3.4	3.3	3.3	3.3	3.4	3.5	3.4	3.4	3.3	3.2
Wages and Salaries²	HHA Occupational Wage Index⁵	64.226	3.0	3.1	3.3	3.5	3.6	3.7	3.6	3.5	3.5	3.4	3.5	3.6	3.5	3.5	3.3	3.3
Employee Benefits²	HHA Occupational Benefits Index⁵	13.442	1.6	1.7	2.0	2.2	2.4	2.6	2.6	2.5	2.4	2.4	2.6	2.9	3.0	3.2	3.2	3.2
Operations and Maintenance	CPI(U)-Fuel and Other Utilities	0.832	3.6	3.3	2.5	0.9	0.0	-0.7	-1.8	-1.6	-1.6	-1.6	-0.5	0.5	1.3	2.2	2.3	2.1
Administrative and General³	—	9.569	2.8	2.7	2.6	2.4	2.3	2.3	2.3	2.3	2.3	2.3	2.4	2.4	2.5	2.6	2.7	2.8
Telephone	CPI(U)-Telephone Services	0.725	2.2	1.9	1.5	0.9	0.4	0.4	0.5	0.6	0.3	-0.1	-0.4	-0.4	0.0	0.4	0.7	0.8
Paper and Printing	CPI(U)-Household Paper Products	0.529	1.2	0.6	0.5	0.7	1.2	1.5	1.9	2.0	1.6	1.0	0.1	-0.4	-0.6	-0.3	0.2	0.5
Postage	CPI(U)-Postage	0.724	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.7	1.5	2.3	3.0	2.3	1.5	0.8	0.0	0.9
Other Administrative Costs³	CPI(U)-Services	7.591	3.2	3.1	3.0	2.9	2.8	2.8	2.7	2.6	2.6	2.6	2.7	2.9	3.0	3.2	3.2	3.2
Transportation	CPI(U)-Private Transportation	3.405	2.3	1.7	0.7	-0.6	-1.1	-1.8	-2.2	-2.0	-1.0	0.2	1.7	3.3	3.5	3.4	3.0	2.4
Capital-Related	—	3.204	2.0	2.0	2.0	2.0	2.0	1.9	1.8	1.7	1.7	1.8	1.9	2.1	2.3	2.4	2.5	2.6
Insurance	CPI(U)-Household Insurance	0.560	3.0	3.0	2.6	2.6	2.1	1.4	0.9	0.1	0.1	0.8	1.5	2.4	2.9	3.0	3.0	2.8
Fixed Capital	CPI(U)-Owner's Equivalent Rent	1.764	2.9	2.9	2.9	3.0	3.1	3.2	3.2	3.2	3.2	3.1	3.0	3.1	3.2	3.3	3.5	3.6
Movable Capital	PPI-Machinery and Equipment	0.880	-0.5	-0.5	-0.5	-0.5	-0.7	-0.7	-0.8	-0.7	-0.6	-0.5	-0.5	-0.4	-0.4	-0.3	-0.1	0.1
Other Expenses³	CPI(U)-All Items less Food and Energy	5.322	2.6	2.5	2.4	2.3	2.2	2.3	2.3	2.3	2.4	2.4	2.6	2.9	3.1	3.2	3.3	3.3

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

Includes allocated Contract Services' Labor.

Includes allocated Contract Services' Non-Labor.

⁴

Category weights may not sum to total because of rounding.

⁵

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

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding two or more categories. FY is fiscal year. Q designates quarter of year. CPI(U) represents Consumer Price Index for all urban consumers. PPI is Producer Price Index. ECI is Employment Cost Index. The four-quarter moving-average percent change for the quarter indicated by the column heading is the rate of change in the average index level for four quarters ending in that quarter over the same period of the previous year. The four-quarter moving-average index level for the quarter indicated by the column heading is computed by summing the index level for that quarter and the prior three quarters and dividing by 4. The process is repeated to compute the four-quarter moving-average index level for the same quarter a year ago. The average index level for the quarter indicated by the column heading is divided by the average index level of the same quarter a year ago, and the quotient is subtracted from 1 and multiplied by 100 to determine the four-quarter moving-average percent change in the index.

Periodically, the Input Price Indexes are revised to a new base year so that cost weights will reflect changes in the mix of goods and services that are purchased. Each revision allows for new base weights, a new base year, and changes to certain price variables used for price proxies.

Each Input Price Index is presented in a table with both an index level and a four-quarter moving-average percent change. The Hospital Input Price Index for PPS is in Table 10, the SNF Input Price Index is in Table 11, and the HHA Input Price Index is in Table 12.

Table 11. Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the Skilled Nursing Facility Input Price Index, by Expense Category: 1997-2001.

Expense Category¹	Price/Wage Variable	Base Year Weights CY 1992²	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1	Forecast

											1999 Q2	1999 Q3	1999 Q4	2000 Q1	2000 Q2	2000 Q3	2000 Q4	2001 Q1
Index Levels
Total	—	100.000	116.1	116.8	117.5	118.4	119.6	120.5	120.9	122.1	123.1	124.1	124.9	125.9	126.8	127.6	128.4	129.5
Compensation	—	67.059	118.1	118.9	119.8	120.9	121.9	122.8	123.5	125.1	126.2	127.2	128.3	129.4	130.4	131.2	132.3	133.6
Wages and Salaries	ECI-W/S: Nursing Homes (Private)	54.262	118.6	119.6	120.5	122.1	123.1	124.3	124.8	126.6	127.7	128.9	129.9	131.2	132.2	133.0	134.1	135.6
Employee Benefits	ECI-Ben: Nursing Homes (Private)	12.797	116.0	115.9	116.8	115.9	116.8	116.6	117.7	118.8	119.9	120.3	121.5	121.8	123.1	123.5	124.9	125.3
Non-Medical Professional Fees	ECI-Comp: Professional and Technical Workers (Private)	1.916	117.3	117.9	118.9	119.8	120.9	122.2	123.0	123.3	124.5	125.7	126.6	127.7	128.6	129.8	130.7	131.9
Utilities³	—	2.500	110.1	114.7	110.8	109.1	110.6	114.7	110.1	109.7	111.2	115.5	112.1	112.5	113.7	118.2	114.7	115.2
Other Expenses	—	18.747	111.7	112.2	112.5	113.3	114.9	115.5	115.6	116.0	116.7	117.4	117.9	118.5	119.2	119.8	120.3	121.0
Other Products³	—	10.964	111.8	111.9	112.3	113.7	116.9	117.5	117.5	117.8	118.2	119.0	119.6	120.3	121.0	121.4	122.1	122.9
Other Services³	—	7.783	114.6	115.7	116.3	117.0	117.6	118.3	118.8	119.6	120.9	121.9	122.8	123.8	124.8	125.9	126.8	127.8
Capital-Related Expenses	—	9.777	109.2	109.7	109.7	109.9	110.4	110.9	110.9	111.1	111.6	112.0	112.1	112.2	112.7	113.1	113.2	113.3
Depreciation³	—	5.915	115.7	116.7	117.2	118.1	118.5	119.4	119.9	120.7	121.1	122.0	122.4	123.2	123.6	124.4	124.8	125.6
Interest³	—	3.189	96.1	95.6	94.7	93.4	94.0	93.4	92.5	91.3	92.1	91.3	90.5	89.2	90.0	89.3	88.6	87.4
Other Capital-Related Expenses	CPI(U)-Residential Rent	0.674	113.6	114.6	115.5	116.3	117.2	118.3	119.4	120.3	121.1	122.4	123.7	124.5	125.4	126.6	127.5	128.2
Four-Quarter Moving-Average Percent Change
Total	—	100.000	2.4	2.4	2.4	2.4	2.6	2.8	2.9	3.0	3.0	3.0	3.1	3.1	3.1	3.1	2.9	2.9
Compensation	—	67.059	2.7	2.7	2.7	2.7	2.9	3.0	3.1	3.2	3.3	3.4	3.6	3.6	3.6	3.5	3.3	3.2
Wages and Salaries	ECI-W/S: Nursing Homes (Private)	54.262	2.9	3.1	3.1	3.2	3.4	3.5	3.6	3.7	3.7	3.7	3.8	3.8	3.7	3.6	3.4	3.3
Employee Benefits	ECI-Benefits: Nursing Homes (Private)	12.797	1.7	1.3	1.0	0.8	0.8	0.8	0.7	1.2	1.6	2.3	2.9	2.9	2.9	2.8	2.7	2.7
Non-Medical Professional Fees	ECI-Comp: Professional and Technical Workers (Private)	1.916	2.7	2.6	2.6	2.8	3.0	3.2	3.3	3.3	3.3	3.1	2.9	3.1	3.2	3.3	3.4	3.3
Utilities³	—	2.500	1.8	1.6	1.5	0.7	0.7	0.5	-0.2	0.1	0.1	0.3	0.9	1.4	1.8	2.3	2.4	2.3
Other Expenses	—	18.747	1.8	1.7	1.6	1.5	1.9	2.3	2.6	2.7	2.4	2.1	1.9	1.8	2.0	2.1	2.1	2.1
Other Products³	—	10.964	1.4	0.9	0.7	0.8	1.8	3.0	4.0	4.5	3.6	2.6	1.9	1.6	1.9	2.1	2.2	2.1
Other Services³	—	7.783	2.9	3.0	3.0	2.9	2.8	2.6	2.5	2.4	2.4	2.6	2.9	3.2	3.3	3.4	3.3	3.3
Capital-Related Expenses	—	9.777	1.4	1.4	1.3	1.3	1.2	1.1	1.1	1.1	1.1	1.1	1.1	1.0	1.0	1.0	1.0	1.0
Depreciation³	—	5.915	2.6	2.6	2.6	2.5	2.5	2.4	2.4	2.3	2.2	2.2	2.2	2.1	2.1	2.0	2.0	2.0
Interest³	—	3.189	-1.4	-1.5	-1.7	-1.9	-2.1	-2.2	-2.3	-2.2	-2.2	-2.2	-2.1	-2.2	-2.2	-2.2	-2.2	-2.2
Other Capital-Related Expenses	CPI(U)-Residential Rent	0.674	2.8	2.8	2.9	3.0	3.1	3.2	3.2	3.3	3.4	3.4	3.4	3.5	3.5	3.5	3.4	3.3

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

Category weights may not sum to total because of rounding.

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

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding two or more categories. CY is calendar year. Q designates quarter of year. ECI is Employment Cost Index. W/S is wages and salaries. Comp is compensation. CPI(U) represents Consumer Price Index for all urban consumers. SNFs is skilled nursing facilities. The four-quarter moving-average percent change for the quarter indicated by the column heading is the rate of change in the average index level for four quarters ending in that quarter over the same period of the previous year. The four-quarter moving-average index level for the quarter indicated by the column heading is computed by summing the index level for that quarter and the prior three quarters and dividing by 4. The process is repeated to compute the four-quarter moving-average index level for the same quarter a year ago. The average index level for the quarter indicated by the column heading is divided by the average index level of the same quarter a year ago, and the quotient is subtracted from 1 and multiplied by 100 to determine the four-quarter moving-average percent change in the index.

Medicare Economic Index

In 1972, Congress mandated the development of the Medicare Economic Index (MEI) to measure the changes in costs of physicians' time and operating expenses. The input price change measured by the MEI is considered in connection with the update factor for the Medicare Part B physician fee schedule under the Resource-Based Relative Value Scale (RBRVS, November 22, 1996, Federal Register) or is used as an advisory indicator by Congress in updating the fee schedule. The MEI is a fixed-weighted sum of annual price changes for various inputs needed to produce physicians' services with an offset for productivity increases. Like a traditional Laspeyres index, the MEI is constructed in two steps. First, a base period is selected (1996 for the MEI), cost categories are identified, and the 1996 expenditure shares by cost category are determined. Second, price proxies are selected to match each relative expenditure category. These proxies are weighted by the category weight determined from expenditure amounts and summed to produce the composite MEI. Unlike a traditional Laspeyres index, the compensation portion of the MEI is adjusted for productivity, so economywide productivity and physician-practice productivity are not both included in the update, resulting in a double counting of productivity.

Forecasts of the MEI are made periodically throughout the fiscal year by Standard & Poor's DRI for HCFA using several different sets of economic assumptions. Standard & Poor's DRI produces four main forecasts of the MEI: (1) a Presidential budget forecast in December; (2) the Mid-session Review in June, based on assumptions for the Federal budget exercises; (3) the Medicare Trustees' Report forecast in February, based on assumptions by the Medicare Trustees; and (4) the Medicare Premium Promul-gation forecast in August, based on baseline assumptions by Standard & Poor's DRI. Standard & Poor's DRI also produces forecasts of the MEI using their own economic assumptions forecast. The forecasts based on Standard & Poor's DRI assumptions are presented in Health Care Indicators. Much of the forecast data changes as more recent historical data become available and the assumptions change.

The methodology, weights, and price-proxy definitions used in the MEI are described in the November 2, 1998, Federal Register. The MEI data are presented in Table 13 as index levels and four-quarter moving-average percent changes.

Table 13. Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the HCFA Medicare Economic Index (MEI) with DRI Forecast Assumptions, by Expense Category: 1997-2001.

Expense Category¹	Price/Wage Variable	Base Year Weights CY 1996²	1997 Q2	1997 Q3	1997 Q4	1998 Q1	1998 Q2	1998 Q3	1998 Q4	1999 Q1	Forecast

											1999 Q2	1999 Q3	1999 Q4	2000 Q1	2000 Q2	2000 Q3	2000 Q4	2001 Q1
Index Levels
Total	—	100.000	101.8	102.3	103.3	104.1	104.4	104.9	105.7	106.3	106.8	107.3	108.1	108.8	109.2	109.7	110.4	111.1
Physician Earnings	—	54.460	102.0	102.4	103.8	104.6	104.7	105.0	106.2	106.8	107.0	107.5	108.5	109.0	109.3	109.6	110.5	111.0
Wages and Salaries	AHE-Private³	44.197	102.2	102.6	104.4	105.2	105.3	105.6	107.0	107.7	107.9	108.3	109.5	110.0	110.3	110.6	111.6	112.0
Benefits	ECI-Benefits, Private³	10.263	100.9	101.1	101.6	101.8	102.3	102.6	102.8	103.3	103.4	103.9	104.2	104.8	105.1	105.6	105.9	106.6
Practice Expenses	—	45.540	101.6	102.2	102.6	103.4	104.1	104.8	105.1	105.7	106.4	107.1	107.6	108.4	109.1	109.8	110.2	111.1
Non-Physician Compensation	—	16.812	101.8	102.4	103.1	103.8	104.3	105.1	105.3	106.0	106.5	107.2	107.6	108.2	108.7	109.2	109.6	110.2
Wages and Salaries	—	12.424	102.0	102.8	103.5	104.3	104.9	105.8	106.0	106.7	107.3	108.0	108.4	109.1	109.6	110.2	110.6	111.2
Professional/Technical	ECI-W/S: Professional/Technical³	5.662	101.7	102.5	103.0	103.6	104.2	105.1	105.5	106.2	106.6	107.2	107.6	108.2	108.7	109.4	109.6	110.1
Managers	ECI-W/S: Administrative/Managerial³	2.410	102.5	103.4	104.8	106.1	106.5	107.8	107.2	108.2	108.8	109.8	110.3	111.2	111.8	112.4	113.3	114.0
Clerical	ECI-W/S: Clerical³	3.830	102.1	102.8	103.3	104.0	104.8	105.4	105.8	106.3	107.3	107.9	108.3	108.9	109.3	109.9	110.2	110.8
Services	ECI-W/S: Service Occupations³	0.522	102.2	103.8	104.5	105.0	105.4	106.2	106.5	107.2	108.1	108.8	109.6	110.1	110.7	111.5	112.1	112.5
Employee Benefits	ECI-Benefits, Private White Collar³	4.388	101.1	101.1	101.9	102.5	102.8	103.2	103.5	104.1	104.1	104.7	105.0	105.8	106.1	106.5	106.8	107.7
Office Expenses	CPI(U)-Housing	11.581	102.2	103.2	103.2	103.9	104.7	105.6	105.6	106.2	107.1	108.1	108.4	109.4	110.2	111.4	111.6	112.7
Medical Materials/Supplies	PPI-Drugs/PPI-Surgical/CPI-Medical Supplies	4.516	102.7	103.0	103.7	106.8	111.1	111.6	112.4	113.2	114.0	114.4	115.2	116.1	116.8	117.0	117.8	119.0
Professional Liability Insurance	HCFA-Professional Liability Premiums	3.152	97.5	98.2	98.7	98.9	96.5	97.1	97.6	98.2	98.7	99.3	99.9	100.6	101.2	101.8	102.4	103.1
Medical Equipment	PPI-Medical Instruments/Equipment	1.878	98.8	99.1	98.5	98.0	97.6	97.9	98.1	98.4	98.5	98.7	98.8	99.1	99.2	99.2	99.4	100.0
Other Professional Expenses	—	7.601	102.0	102.1	102.7	103.0	103.5	103.8	104.3	104.6	106.0	106.7	107.6	108.4	109.3	110.0	111.0	111.9
Automobile	CPI(U)-Private Transportation	1.300	100.7	100.4	100.3	98.8	98.6	98.2	98.3	97.4	100.5	100.8	101.9	102.1	103.1	103.2	104.3	104.6
All Other	CPI(U)-All Items less Food/Energy	6.301	102.3	102.5	103.1	103.9	104.5	105.0	105.6	106.1	107.1	107.9	108.7	109.7	110.5	111.4	112.3	113.4
Four-Quarter Moving-Average Percent Change
Total	—	100.000	2.4	2.3	2.2	2.2	2.4	2.5	2.5	2.4	2.3	2.2	2.2	2.3	2.3	2.3	2.2	2.2
Physician Earnings	—	54.460	2.4	2.5	2.5	2.5	2.6	2.6	2.5	2.4	2.3	2.2	2.2	2.2	2.2	2.1	2.0	2.0
Wages and Salaries	AHE-Private³	44.197	2.7	2.8	2.9	2.9	2.9	2.9	2.8	2.7	2.5	2.5	2.4	2.4	2.3	2.2	2.1	2.0
Benefits	ECI-Benefits, Private³	10.263	1.0	1.0	1.1	1.1	1.2	1.3	1.3	1.4	1.3	1.2	1.3	1.3	1.4	1.5	1.6	1.7
Practice Expenses	—	45.540	2.3	2.0	1.9	1.9	2.1	2.3	2.4	2.4	2.4	2.3	2.3	2.4	2.4	2.5	2.5	2.4
Non-Physician Compensation	—	16.812	2.1	2.0	2.1	2.3	2.4	2.6	2.5	2.4	2.3	2.1	2.1	2.1	2.1	2.1	2.0	1.9
Wages and Salaries	—	12.424	2.3	2.3	2.4	2.6	2.7	2.9	2.7	2.6	2.5	2.3	2.3	2.3	2.2	2.2	2.1	2.0
Professional/Technical	ECI-W/S: Professional/Technical³	5.662	2.0	1.9	2.0	2.3	2.5	2.6	2.5	2.5	2.5	2.3	2.2	2.1	2.0	2.0	1.9	1.9
Managers	ECI-W/S: Administrative/Managerial³	2.410	3.2	3.0	3.2	3.4	3.6	4.0	3.6	3.1	2.7	2.1	2.2	2.4	2.6	2.7	2.6	2.6
Clerical	ECI-W/S: Craft³	3.830	2.3	2.3	2.4	2.5	2.5	2.6	2.5	2.5	2.4	2.4	2.3	2.4	2.3	2.1	2.0	1.8
Services	ECI-W/S: Service Occupations³	0.522	2.4	2.9	3.0	3.2	3.3	2.9	2.6	2.4	2.3	2.3	2.5	2.7	2.6	2.6	2.4	2.3
Employee Benefits	ECI-Benefits, Private White Collar³	4.388	1.3	1.1	1.2	1.3	1.4	1.8	1.8	1.7	1.6	1.5	1.5	1.5	1.6	1.7	1.7	1.7
Office Expenses	CPI(U)-Housing	11.581	2.9	2.7	2.6	2.4	2.3	2.3	2.3	2.3	2.3	2.3	2.4	2.6	2.7	2.9	3.0	3.0
Medical Materials/Supplies	PPI-Drugs/PPI-Surgical/CPI-Medical Supplies	4.516	4.5	3.4	2.9	2.7	4.4	6.0	7.4	7.7	6.3	4.8	3.4	2.5	2.5	2.4	2.4	2.4
Professional Liability Insurance	HCFA-Professional Liability Premiums	3.152	-0.9	-1.6	-2.0	-1.1	-0.8	-0.5	-0.5	-1.0	-0.2	0.7	1.6	2.3	2.4	2.4	2.5	2.5
Medical Equipment	PPI-Medical Instruments/Equipment	1.878	0.1	-0.5	-1.3	-1.1	-1.0	-1.1	-0.8	-0.6	-0.1	0.5	0.7	0.8	0.7	0.6	0.6	0.7
Other Professional Expenses	—	7.601	2.5	2.3	2.1	1.8	1.7	1.6	1.5	1.6	1.8	2.1	2.5	3.0	3.1	3.2	3.2	3.1
Automobile	CPI(U)-Private Transportation	1.300	2.3	1.7	0.7	-0.6	-1.1	-1.8	-2.2	-2.0	-1.0	0.2	1.7	3.3	3.5	3.4	3.0	2.4
All Other	CPI(U)-All Items less Food/Energy	6.301	2.6	2.5	2.4	2.3	2.2	2.3	2.3	2.3	2.4	2.4	2.6	2.9	3.1	3.2	3.3	3.3

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For data sources used to estimate the Input Price Index relative weights and choice of price proxies, refer to the November 2, 1998, Federal Register.

Category weights may not sum to total because of rounding.

Series are adjusted for productivity using 10-year moving average of output per hour for the non-farm business sector. All series in the compensation portion of the MEI are adjusted for productivity so both economywide productivity and physician practice productivity are not included in the update.

NOTES: A dash (—) in the Price/Wage Variable column denotes a total or subtotal produced by adding two or more categories. HCFA is Health Care Financing Administration. CY is calendar year. Q designates quarter of year. AHE is average hourly earnings. ECI is Employment Cost Index. W/S is wages and salaries. CPI(U) represents Consumer Price Index for all urban consumers. PPI is Producer Price Index. The four-quarter moving-average percent change for the quarter indicated by the column heading is the rate of change in the average index level for four quarters ending in that quarter over the same period of the previous year. The four-quarter moving-average index level for the quarter indicated by the column heading is computed by summing the index level for that quarter and the prior three quarters and dividing by 4. The process is repeated to compute the four-quarter moving-average index level for the same quarter a year ago. The average index level for the quarter indicated by the column heading is divided by the average index level of the same quarter a year ago, and the quotient is subtracted from 1 and multiplied by 100 to determine the four-quarter moving-average percent change in the index.

Footnotes

The authors are with the Office of the Actuary, Health Care Financing Administration (HCFA). The views expressed are those of the authors and do not necessarily reflect those of HCFA.

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

Reprint Requests: Mary Lee Seifert, Office of Strategic Planning, Health Care Financing Administration, 7500 Security Boulevard, N3-02-02, Baltimore, MD 21244-1850. E-mail: mseifert@hcfa.gov

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U.S. Department of Labor. Employment and Earnings. No. 9. Vol. 45. Washington, DC.: U.S. Government Printing Office; Sep, 1998a. Bureau of Labor Statistics. [Google Scholar]
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[b1-hcfr-21-1-079] American Hospital Association. Hospital Statistics. 1995-96. Chicago: 1996. [Google Scholar]

[b2-hcfr-21-1-079] American Hospital Association. National Hospital Panel Survey; Chicago: 1963-98. Unpublished. [Google Scholar]

[b3-hcfr-21-1-079] Board of Trustees of the Federal Hospital Insurance Trust Fund. 1999 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund. Washington DC.: Mar 30, 1999. [Google Scholar]

[b4-hcfr-21-1-079] Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund. 1999 Annual Report of the Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund. Washington DC.: Mar 30, 1999. [Google Scholar]

[b5-hcfr-21-1-079] Braden BR, Cowan CA, Lazenby HC, et al. National Health Expenditures, 1997. Health Care Financing Review. 1998 Fall;20(1):83–126. [PMC free article] [PubMed] [Google Scholar]

[b6-hcfr-21-1-079] Federal Register: Medicare Program; Revisions to Payment Policies and Adjustments to the Relative Value Units Under the Physician Fee Schedule for the Calendar Year 1999; Final Rule and Notice. No. 211. Vol. 63. Washington, DC.: U.S.Government Printing Office; Nov 2, 1998. pp. 58845–58849. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b7-hcfr-21-1-079] Federal Register: Medicare Program; Schedules of Per-Visit and Per-Beneficiary Limitations on Home Health Agency Costs for Cost Reporting Periods Beginning On or After October 1,1998; Notice. No. 154. Vol. 63. Office of the Federal Register, National Archives and Records Administration; Washington, DC.: U.S. Government Printing Office; Aug 11, 1998. p. 42922. [Google Scholar]

[b8-hcfr-21-1-079] Federal Register: Medicare Program: Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 1999 Rates; Final Rule. No 147. Vol. 63. Washington, DC.: U.S. Government Printing Office; Jul 31, 1998. p. 41006. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b9-hcfr-21-1-079] Federal Register: Medicare Program: Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Final Rule. No 91. Vol. 63. Washington, DC.: U.S. Government Printing Office; May 12, 1998. p. 26291. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b10-hcfr-21-1-079] Federal Register: Medicare Program; Changes to the Inpatient Hospital Prospective Payment Systems and Fiscal Year 1998 Rates; Final Rule. No. 168. Vol. 62. Washington, DC.: U.S. Government Printing Office; Aug 29, 1997. p. 45993. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b11-hcfr-21-1-079] Federal Register: Medicare Program; Revisions to Payment Policies and Five-Year Review of and Adjustments to the Relative Value Unites, Final, and Physician Fee Schedule Update for Calendar Year 1997 and Physician Volume Performance Standard Rates of Increase for Federal Fiscal Year 1997; Notice. No. 227. Vol. 61. Washington, DC.: U.S. Government Printing Office; Nov 22, 1996. pp. 59717–59724. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b12-hcfr-21-1-079] Federal Register: Medicare Program; Schedules of Limits of Home Health Agency Cost per Visit for Cost Reporting Periods Beginning on or After July 1, 1996. No. 127. Vol. 61. Office of the Federal Register, National Archives and Records Administration; Washington, DC.: U.S. Government Printing Office; Jul 1, 1996. pp. 34347–34350. [Google Scholar]

[b13-hcfr-21-1-079] Federal Register: Medicare Program; Schedule of Limits for Skilled Nursing Facility Inpatient Routine Service Costs. 4. Vol. 59. Washington, DC.: U.S. Government Printing Office; Jun 6, 1994. pp. 762–767. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b14-hcfr-21-1-079] Federal Register: Medicare Program; Revision of the Medicare Economic Index; Final rule. 228. Vol. 57. Washington, DC.: U.S. Government Printing Office; Nov 25, 1992. pp. 55896–56230. Office of the Federal Register, National Archives and Records Administration. [PubMed] [Google Scholar]

[b15-hcfr-21-1-079] Federal Register: Medicare Program; Schedules of Limits of Skilled Nursing Facility Inpatient Routine Service Costs; Final rule. No. 129. Vol. 57. Office of the Federal Register, National Archives and Records Administration; Washington, DC.: U.S. Government Printing Office; Oct 7, 1992. pp. 46177–48187. [Google Scholar]

[b16-hcfr-21-1-079] Hilzenroth DS. Washington Post. Jun 6, 1999. Nursing Homes Shun Some Medicare Patients; p. A1. [Google Scholar]

[b17-hcfr-21-1-079] Levit K, Cowan C, Braden B, et al. National Health Expenditures in 1997: More Slow Growth. Health Affairs. 1998 Nov-Dec;17(6) doi: 10.1377/hlthaff.17.6.99. [DOI] [PubMed] [Google Scholar]

[b18-hcfr-21-1-079] U.S. Department of Commerce. Survey of Current Business. No. 9. Vol. 78. Washington, DC.: U.S. Government Printing Office; Sep, 1998. National Income and Product Accounts. Bureau of Economic Analysis. [Google Scholar]

[b19-hcfr-21-1-079] U.S. Department of Commerce. Survey of Current Business. No. 1/2. Vol. 76. Washington, DC.: U.S. Government Printing Office; Jan-Feb. 1996. Improved Estimates of the National Income and Product Accounts for 1959-1995: Results of the Comprehensive Revision. Bureau of Economic Analysis. [Google Scholar]

[b20-hcfr-21-1-079] U.S. Department of Labor. Employment and Earnings. No. 9. Vol. 45. Washington, DC.: U.S. Government Printing Office; Sep, 1998a. Bureau of Labor Statistics. [Google Scholar]

[b21-hcfr-21-1-079] U.S. Department of Labor. Monthly Labor Review. No. 9. Vol. 121. Washington, DC.: U.S. Government Printing Office; Sep, 1998b. Bureau of Labor Statistics. [Google Scholar]

[b22-hcfr-21-1-079] U.S. Department of the Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government. Washington, DC.: U.S. Government Printing Office; Oct, 1998. Monthly Reports, January 1991 - September 1998. Financial Management Service. [Google Scholar]

[b23-hcfr-21-1-079] U.S. General Accounting Office. Medicare Home Health Benefit: Impact of Interim Payment System and Agency Closures on Access to Services. Washington, DC.: Sep 9, 1998. HEHS-98-238. [Google Scholar]

[b24-hcfr-21-1-079] U.S. General Accounting Office. Medicare Home Health Agencies: Closures Continue, with Little Evidence Beneficiary Access Is Impaired. Washington, DC.: May 26, 1999. HEHS-99-120. [Google Scholar]

PERMALINK

Health Care Indicators: Hospital, Employment, and Price Indicators for the Health Care Industry: First Quarter 1999

Mary Lee Seifert

Stephen K Heffler

Carolyn S Donham

Abstract

Key Trends

Hospital Occupancy Rates

Figure 1. Staffed Beds, Inpatient Days, and Occupancy Rate: Percent Change and Change in Rate from Same Period of Previous Year: 1990-1998.

Hospital Admissions and Out-Patient Visits

Figure 2. Outpatient Visits and Inpatient Admissions, Percent Change from Same Period of Previous Year: 1990-1998.

Medicare Trust Fund Operations

Figure 3. Medicare Hospital Insurance (HI) Trust Fund, Percent Change in Income, Outlays, and Assets from Same Period of Previous Year: 1992-1999.

Health Sector Employment and Payrolls

Figure 4. Employment in Health Services, Nursing, Personal Care Facilities, and Home Health Care Services, Percent Change from Same Period of Previous Year: 1990-1999.

Medical Prices

Figure 5. Percent Change in Consumer Price Indexes (CPIs) from Same Period of Previous Year: 1990-1999.

Prescription Drug Prices

Figure 6. Percent Change in Prescription Drug Price Indexes from Same Period of Previous Year: 1996-1999.

Hospital Services, Wages, and Prices

Figure 7. Percent Change in Hospital Prices and Wages from Same Period of Previous Year: 1998-1999.

Nursing Home Services Wages and Prices

Figure 8. Percent Change in Nursing Home Prices and Wages from Same Period of Previous Year: 1998-1999.

Home Health Care Services, Wages, and Prices

Figure 9. Percent Change in Home Health Care Prices and Wages from Same Period of Previous Year: 1998-1999.

Background Information on Data Sources and Methods

Community Hospital Statistics

Table 1. Selected Community Hospital Statistics: 1994-19981.

Table 2. Percent Change in Selected Community Hospital Statistics: 1994-1998.

Medicare Trust Fund Operations

Table 3. Hospital Insurance and Supplementary Medical Insurance (SMI) Trust Fund Operations: 1995-1999.

Table 8. Index Levels of Medical Prices: 1995-1999.

Private Health Sector: Employment, Hours, and Earnings

Table 4. Employment, Hours, and Earnings in Private1 Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Table 5. Percent Change in Employment, Hours, and Earnings in Private1 Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Table 6. Percent Change in Implied Non-Supervisory Payrolls, Employment, Average Weekly Hours, and Average Hourly Earnings in Private1 Health Service Establishments, by Selected Type of Establishment: 1995-1999.

National Economic Indicators

Table 7. Selected National Economic Indicators: 1995-1999.

Prices

Consumer Price Indexes

Table 9. Percent Change in Medical Prices from Same Period a Year Ago: 1995-1999.

Producer Price Indexes

Input Price Indexes

Table 10. Quarterly Index Levels and Four-Quarter Moving Average Percent Change in the Prospective Payment System (PPS) Hospital Input Price Index, by Expense Category: 1997-2001.

Table 12. Quarterly Index Levels and Four-Quarter Moving-Average Percent Change of the Home Health Agency (HHA) Input Price Index, by Expense Category: 1997-2001.

Table 11. Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the Skilled Nursing Facility Input Price Index, by Expense Category: 1997-2001.

Medicare Economic Index

Table 13. Quarterly Index Levels and Four-Quarter Moving-Average Percent Change in the HCFA Medicare Economic Index (MEI) with DRI Forecast Assumptions, by Expense Category: 1997-2001.

Footnotes

References

ACTIONS

PERMALINK

RESOURCES

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Links to NCBI Databases

Table 1. Selected Community Hospital Statistics: 1994-1998¹.

Table 4. Employment, Hours, and Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Table 5. Percent Change in Employment, Hours, and Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1995-1999.

Table 6. Percent Change in Implied Non-Supervisory Payrolls, Employment, Average Weekly Hours, and Average Hourly Earnings in Private¹ Health Service Establishments, by Selected Type of Establishment: 1995-1999.