Hospital, Employment, and Price Indicators for the Health Care Industry: First Quarter 1996
Sensenig, Arthur L., Heffler, Stephen K., Health Care Financing Review
This regular feature of the journal includes a discussion of recent trends in health care spending, employment, and prices. The statistics presented in this article are valuable in their own right and for understanding the relationship between the health care sector and the overall economy. In addition, they allow us to anticipate the direction and magnitude of health care cost changes prior to the availability of more comprehensive data.
KEY FIRST QUARTER 1996 TRENDS
* The number of inpatient days in community hospitals continued to decline in the first quarter of 1996, with the largest declines registered by the 65-years-of-age-or-over group.
* In the first quarter of 1996, community hospital revenues grew 3.0 percent from the same period 1 year earlier, less than one-half the rate of growth recorded 1 year ago.
* Total Medicare trust fund outlays were $47.5 billion in the first quarter of 1996. This 7.0-percent increase in outlays, measured from the first quarter of 1995, represents a slight deceleration in the growth of total Medicare outlays.
* Assets held by the Medicare Hospital Insurance (HI) trust fund continued to decline in the first quarter of 1996, a trend expected to persist in 1996. Current estimates are that the HI trust fund assets would be depleted early in 2001 in the absence of corrective legislation.
* Growth in hospital producer prices decelerated for the fifth consecutive quarter in the first quarter of 1996, reaching an all-time low.
* In the first quarter of 1996, the gap between increases in consumer prices for medical care and increases in consumer prices for all items less medical care was the smallest since 1981.
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.
In this article we begin to present information on the income, outlays, and asset balances of the Medicare Trust Funds. These data are quarterly and annual aggregations of monthly income, outlays, and asset balances reported in the Monthly Treasury Statement released by the Treasury Department (U.S. Department of the Treasury, 1996). These data appear in a new table, titled "Table 3: Hospital Insurance and Supplementary Medical Insurance Trust Fund Operations: 1992-96." Tables previously numbered 3 through 12 are now Tables 4 through 13.
The first nine of the accompanying tables report selected quarterly statistics and the calendar year 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 show base weights, annual index levels, and annual percent changes in the Input Price Indexes maintained by HCFA. The annual percent changes and the 4-quarter moving average percent changes for input prices are calculated using the same procedure, namely averaging the 4 quarters ending with the fourth calendar quarter of the current year and dividing by the average of the 4 calendar quarters of the preceding year.
COMMUNITY HOSPITAL STATISTICS
Statistics on community hospital operations from the American Hospital Association (AMA) for the first quarter of 1996 show that hospitals remain under pressure to reduce excess capacity. …