Hospital, Employment, and Price Indicators for the Health Care Industry: Second Quarter 1997

Article excerpt


* The adult occupancy rate at community hospitals increased in the second quarter of 1997, measured from the same period 1 year earlier. This increase, the third consecutive quarterly increase in the adult occupancy rate, measured from the same period 1 year earlier, may signal a bottoming out of the trend in declining occupancy rates prevalent throughout the 1990s.

* American Hospital Association(AHA) statistics on hospital length of stay (LOS), stratified by age group, suggest that the trend in the LOS for the population 65 years of age or older may be converging with the trend for the population under age 65.

* Implied nonsupervisory payrolls for the private sector health services industry grew 6.7 percent in the second quarter of 1997, measured from the same period of the previous year, the strongest growth in several years.

* Overall and medical prices, as measured by the Consumer Price Index (CPI), continued to grow slowly in the second quarter of 1997.

* Health sector wages continued to grow moderately in the second quarter of 1997, a sign that medical price growth may not accelerate in the near future.


This article presents statistics on health care utilization, prices, expenses, employment, and work hours, as well as on national economic activity. These statistics provide an early indication of changes occurring in the health care sector and within the general economy. We rely On indicators such as these to anticipate and predict changes in health care sector expenditures for the most recent year. Other indicators help to identify specific reasons (e.g., increases in price inflation or declines in utilization) for health care expenditure change.

The first nine of the accompanying tables report selected quarterly statistics and the calendar year (CY) aggregations of quarterly information for the past 4 years. Unless specifically noted, changes in quarterly statistics are shown from the same period 1 year earlier. For quarterly information, this calculation permits analysis of data to focus on the direction and magnitude of changes, without interference introduced by seasonal fluctuations. The last four tables in the report show base weights, annual index levels, and annual percent changes in the Input Price Indexes maintained by HCFA. The annual percent changes and the four-quarter moving average percent changes for input prices are calculated using the same procedure, namely averaging the four quarters ending with the fourth calendar quarter of the current year and dividing by the average of the four calendar quarters of the preceding year.


Statistics from the AHA presented in Tables 1 and 2, show that recent trends in community hospital revenue and expenditure growth were little changed in the second quarter of 1997. However, there is some evidence that decline in inpatient utilization may be bottoming out. Additionally, AHA statistics on inpatient utilization by age group suggest that differences in patterns of hospital utilization between patients 65 years of age or older and those under age 65 may be narrowing.


In the past four quarters the decline in the number of inpatient days has slowed, suggesting that community hospitals may be seeing the end of declines in inpatient utilization. This deceleration in the decline of inpatient days is shown in Figure 1. The adult occupancy rate, also shown in Figure 1, is determined by dividing hospitals' adult census by the number of staffed hospital beds. Community hospitals have been cutting the number of staffed beds since 1983, and in recent quarters the decline in the number of staffed beds has accelerated. Despite the cuts in staffed beds the adult occupancy rate at community hospitals continued to fall throughout the 1990s. …