Medical Price Increases Bump Up Consumer Prices
Consumer prices in January increased by 0.2%, and core prices, which exclude food and energy costs, increased by 0.3%, in large part because of a 0.8% increase in medical prices, according to the Consumer Price Index report released on Wednesday by the Department of Labor, Reuters reports. Analysts had expected consumer prices to increase by 0.1% and core prices to increase by 0.2%.
According to the report, the increase in medical prices -- the largest increase since 1991 -- accounted for 60% of the increase in core prices (Felsenthal, Reuters, 2/21). Analysts attributed the increase in medical prices to increased costs for prescription drugs and physician services.
David Wyss, chief economist at Standard & Poor's, said, "We got a nasty little surprise from the health care sector. This is definitely a worrisome inflation report" (Crutsinger, AP/Houston Chronicle, 2/21).
In addition, analysts said that medical prices in January increased by 4.3% from the previous year and likely will continue to increase as baby boomers age and require more health care (Henderson, Washington Post, 2/22).
Three broadcast programs reported on the report.
- APM's "Marketplace": The segment includes comments from John Poisal, lead of the report and a deputy director at CMS; Paul Ginsburg, director of the Center for Studying Health System Change; and Don McCanne of Physicians for a National Health Program (Scott, "Marketplace," APM, 2/21). Audio and a transcript of the segment are available online.
- CBS' "Evening News": The segment includes comments from CMS Deputy Administrator Herb Kuhn; Dan Troy, former chief counsel for FDA; and a Medicare beneficiary who takes several cancer treatments (Pitts, "Evening News," CBS, 2/22). Video of the segment is available online.
- PBS' "NewsHour with Jim Lehrer": "NewsHour" health correspondent Susan Dentzer reported on the findings (Dentzer, "NewsHour with Jim Lehrer," PBS, 2/21). Audio of the segment is available online.