Medical Costs Continue Reaching For the Stars

January 16, 2003 ( - Medical care costs continue their upward escalation, recording a 0.3% increase in December.

The US Department of Labor (DoL) released Consumer Price Index (CPI) numbers for December, that reveal the cost of medical services continues to increase. Compared to  November’s 0.6% increase , last month’s rise was modest.   However, when measured against last December, medical costs have increased 5.0%.

Contributing to the rise was the increase in hospital services, up 0.6% in December and 10.2% since the same month last year.  The largest increases were seen in:

  • Outpatient hospital service: up 0.6% in December; an increase of 12.7% since December 2001
  • Inpatient hospital services: up 0.7% in December; up 9.4% since December 2001

Professional services also saw price increases in December of 0.4%, a rise of 3.2% since December 2001. Included in this increase were physician services, up 0.4% in December, a rise of 3.3% since December 2001.   Also adding to the bite of higher professional service costs were dental service prices, up 0.3% in December and 4.5% for the previous 12 months.

The medical care commodities index, a measure of prescription drugs, nonprescription drugs and medical supplies showed virtually no change in December, increasing less that one-tenth of one percent.   However, the number was still greater, albeit slightly, than November and is up 3.2% from December 2001 levels. 

Components of the care commodities index also showed increases in December:

  • Prescription drugs and medical supplies rose a very modest 0.1%; up 4.5% since December 2001
  • Nonprescription drugs and medial supplies increased 0.5%; however, this component was also one of the few to be down for the year.   Declining 0.5% since December 2001.

Overall, the non-seasonally adjusted December CPI recorded a decrease of 0.2%, its first decrease since the same period last year.  The continued rise in medical care costs was offset by the second consecutive month of energy price declines, down 0.4% in December.