The prices of medical care jumped in April, helping boost the Consumer Price Index, and leaving economists and healthcare experts scrambling to explain the cause of the large increase, according to CNBC. Medical services prices jumped 0.9 percent in April, the quickest pace since the summer of 1990. Hospital services led the charge with a 1.9 percent gain.
The jump is troubling to some since healthcare costs have been calm over the past two years even with the full implementation of Obamacare. The medical care index, maintained by the Bureau of Labor Statistics, rose 0.7 percent in April, “its largest increase since January 2007,” according to a BLS report. The overall Consumer Price Index, of which medical care is one of eight components, grew just 0.1 percent for the month.
The BLS report further revealed medical care services, the largest component of the medical care index, grew by 0.9 percent. This segment includes the prices of professional services, hospital and related services and health insurance.
Economists have found no compelling reason for the uptick in medical costs, and are suggesting that it is just an anomaly. “This is so far above the underlying trend – about 0.3 percent per month – that we have to regard it as a one-time event,” Ian Shepherdson, chief economist at Pantheon Macroeconomics told MarketWatch.
“I find this maddening,” Douglas Holtz-Eakin, an economist and former director of the Congressional Budget Office who’s now president of the American Action Forum policy institute, told CNBC. “I’m now obsessed.”
In order to determine the cause of the spike, Holtz-Eakin told CNBC that he downloaded a decade’s worth of data, and spoke to a half-dozen economists and healthcare analysts. He found the increase was largely driven by reported hikes in the prices of hospital services. “We have no explanation for what’s going on in hospital services,” Holtz-Eakin said. “Why it’s so big, and why in April, I can’t explain it.”
The jump in medical care costs helped so-called core inflation, which strips out volatile food and energy prices, by 0.3 percent, the largest gain since January 2013.
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