National hospital input price index

Area of Science:

• Health Economics
• Healthcare Management
• Price Index Analysis

Background:

• Hospital care prices significantly impact national healthcare expenditures.
• Measuring inflation specific to hospital inputs is crucial for economic analysis.
• Previous research lacked a comprehensive index for community hospital input prices.

Purpose of the Study:

• To develop and present the national community hospital input price index (IPI).
• To measure the average percentage change in prices for hospital inputs.
• To analyze historical and forecast price trends from 1970-1981.

Main Methods:

• Estimated weights for expenditure categories within hospital services.
• Selected proxy price variables for each expenditure category.
• Calculated the input price index using a fixed market basket methodology.

Main Results:

• The hospital input price index (IPI) increased 8.0% annually from 1970-1978.
• This rate exceeded the average consumer price increase of 6.6% during the same period.
• Forecasts indicated an 8.5%-9.0% annual IPI increase for 1979-1981.

Conclusions:

• Hospital input prices have historically risen faster than general consumer prices.
• The IPI provides a vital tool for understanding and managing healthcare cost inflation.
• Real growth in hospital expenditures per day averaged 4.5% annually, influenced by policy.