Inflation’s not hitting health – and drug prices have lowest increases, says report

The health care sector is not being hit by overall inflation – and prescription drug prices are seeing the lowest increases, says a new briefing from the Peterson-KFF Health System Tracker.

As of April 2022, “overall prices grew by 8.3% from the previous year, while prices for medical care increased by only 3.2%. This is unusual, as health prices historically outpace prices in the rest of the economy,” said Good Day BIO, citing the report.

The largest increase can be seen in prices for inpatient hospital services (3.7%), followed by nursing homes (3.6%) and outpatient hospital services (3.3%). All three categories rose much faster than the overall price of medical care, which increased by 3.2%.

The lowest increases are recorded in prescription drugs (1.7%) and in physician services (1.2%).

Policymakers are constantly saying that rising health care costs are driven by drug prices. However, the report – and other recent studies – show this is just not true.

Although medical inflation, by definition, outpaces inflation in other segments of the economy, the story is different in 2022, says the Peterson-KFF Health System Tracker. Now, medical prices are now growing at similar rates as in past years, while prices in other segments are rising more rapidly than in previous years.

However, wage increases f0r health workers might put upward pressure on prices, unless medical centers find a way of operating with fewer staff, the report warns.