this article presents statistics on health care utilization , prices , expenses , employment , and work hours , as well as on national economic activity .
some of these statistics are based on sample surveys conducted monthly or quarterly by government agencies or private organizations , and are available 1 to 3 months after the completion of the period .
they provide the first glimpse at changes occurring within the general economy and the health care sector . the accompanying tables report selected quarterly statistics for 1990 through the first quarter of 1993 , and the calendar year aggregation of quarterly information in the past 3 years .
, this calculation permits analysis of quarterly data to focus on the direction and magnitude of changes , without interference introduced by seasonal fluctuations . in the national health accounts , indicators such as these play an important role in the estimation of the latest historical year of health care expenditures .
information that is more comprehensive tends to lag behind the close of a calendar year by 9 to 12 months or more .
therefore , we rely extensively 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 expenditure change . in the following sections
, we will identify important indicators of health care and national economic activity and their sources .
we then describe what these indicators tell us about general economic and health sector activity during the most recent quarter .
since 1963 , the american hospital association ( aha ) , in cooperation with member hospitals , has been collecting data on the operation of community hospitals through its national hospital panel survey .
community hospitals , which comprised more than 80 percent of all hospital facilities in the united states in 1991 , include all non - federal , short - term general , and other special hospitals open to the public .
they exclude hospital units of institutions ; psychiatric facilities ; tuberculosis , other respiratory , and chronic disease hospitals ; institutions for the mentally retarded ; and alcoholism and chemical dependency hospitals .
the sample is designed to produce estimates of community hospital indicators by bed size and region ( american hospital association , 1963 - 93 ) . in tables 1 and 2 ,
statistics covering expenses , utilization , beds , and personnel depict trends in the operation of community hospitals annually from 1990 to 1992 and quarterly for selected quarters from 1990 through 1993 .
figure 1 shows changes from the same quarter 1 year earlier in various measures of hospital utilization for 1984 through the first quarter of 1993 . for purposes of national health expenditures ( nhe ) ,
survey statistics on revenues ( not shown on table 1 ) are analyzed in estimating the growth in the largest component of health care costs  community hospital expenditures .
this one segment of nhe accounted for 33 percent of all health spending in 1991 ( letsch et al . , 1992 ) .
the survey also identifies important factors influencing expenditure growth patterns , such as changes in the number of beds in operation , number of admissions , length of stay , use of outpatient facilities , and number of surgeries .
the u.s . bureau of labor statistics ( bls ) collects monthly information on employment for all workers , and earnings and work hours for non - supervisory workers in a sample of 370,000 establishments .
data are collected through cooperative agreements with state agencies that also use this information to create state and local area statistics .
the survey is designed to collect industry - specific information on wage and salary jobs in non - agricultural industries .
it excludes statistics on self - employed persons and on those employed in the military ( u.s . department of labor , 1993a ) .
approximately 5 percent of the population hold more than one job at any point in time .
( other surveys that are household - based , such as the current population survey [ cps ] , also record employment . in the cps , however , each person 's employment status is counted only once , either as employed , unemployed , or not in the labor force . ) once each year , monthly establishment - based employment statistics are adjusted to benchmarks created from annual establishment census information , resulting in revisions to previously published employment estimates .
tables 3 and 4 and figure 2 present statistics on employment , average hourly earnings , and average weekly hours in private ( non - government ) health service establishments .
similar statistics for the private non - agricultural sector , included on these tables , provide a basis for comparing the economy as a whole with the health sector in employment , earnings , and work hours .
table 5 summarizes business activity in the health sector and the overall economy by measuring change in the implied non - supervisory work hours and payroll . implied work hours
are the product of the number of non - supervisory employees and average weekly hours . implied non - supervisory payrolls
figure 3 shows changes from the same quarter 1 year earlier in non - supervisory payroll for 1984 through the first quarter of 1993 . for purposes of nhe , changes in work hours by industry combined with changes in prices ( discussed in a later section ) can be used to gauge the direction and magnitude of expenditure change in specific industries .
we use these composite indicators in the estimation of growth in physician and dental expenditures for the most recent period .
we study the historical relationship of changes in this indicator to changes in expenditures , and estimate this relationship for the most recent period .
bls publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services .
tables 6 and 7 and figure 4 present information on the consumer price index ( cpi ) for all urban consumers that measures changes in prices faced by 80 percent of the non - institutionalized population in the united states .
( the more restrictive wage earner cpi gauges prices faced by wage earners and clerical workers
. these workers account for 32 percent of the non - institutionalized population [ u.s .
the index reflects changes in prices charged for the same quality and quantity of goods or services purchased in the base period . for most items , the base period of 1982 - 84 is used to define the share of consumer expenditures purchasing specific services and products .
those shares or weights remain constant in all years , even though consumption patterns of the household may change over time .
cpis for health care goods and services depict price changes for out - of - pocket expenditures made directly by consumers .
the composite cpi for medical care weights together product - specific or service - specific cpis in proportion to household out - of - pocket expenditures for these items .
for example , the composite medical care cpi measures inflation for the 3 percent of hospital expenditures that are made out - of - pocket by consumers ; the remaining 97 percent of the costs of hospital care paid by private health insurers , medicare , medicaid , and other payers are not weighted into the cpi for medical care .
in addition , some medical care sector indexes measure changes in list or charged prices , rather than in the prices actually received by providers after discounts are deducted . in several health care areas , received or transaction prices are difficult to capture , although bls is making advances in this area . in the nhe , a combination of cpis for selected medical care items , input price indexes for nursing homes , and the cpi for hospital and related services , adjusted by the health care financing administration ( hcfa ) to provide transaction price changes , are used as measures of inflation for the health industry .
the indexes are used to develop a fixed - weight price index for personal health care to depict price changes affecting the entire health care industry more accurately than does the overall cpi medical care index ( letsch , 1993 ) . in 1979
, hcfa developed the medicare hospital input price index ( hospital market basket ) , which was designed to measure the pure price changes associated with expenditure changes for hospital services . in the early 1980s ,
the skilled nursing facility ( snf ) and home health agency ( hha ) input price indexes , often referred to as  market baskets ,  were developed to price a consistent set of goods and services over time .
also , in the early 1980s , the original medicare hospital input price index was revised for use in updating payment rates for the prospective payment system ( pps ) .
all of these indexes have played an important role in helping to set medicare payment percent increases , and in understanding the contribution of input price increases to growing health expenditures .
the input price indexes , or market baskets , are laspeyres or fixed - weight indexes that are constructed in two steps .
for example , for the pps hospital input price index , the base period is 1987 .
cost categories , such as food , fuel , and labor , are identified and their 1987 expenditure amounts determined . the proportion or share of total expenditures included in specific spending categories
second , a price proxy is selected to match each expenditure category : its purpose is to measure the rate of price increase of the goods or services in that category .
the price proxy index for each spending category is multiplied by the expenditure weight for that category .
the sum of these products ( weights multiplied by the price index ) over all cost categories yields the composite input price index for any given time period , usually a fiscal year or a calendar year .
the percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider .
the input price indexes are estimated on a historical basis and forecasted over several years .
the hcfa - chosen price proxies are forecasted under contract with data resources , inc./mcgraw - hill ( dri ) . following every calendar year quarter , in march , june , september , and december
, dri updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions .
some of the data in tables 8 through 13 are forecasted , and are expected to change as more recent historical data become available and subsequent quarterly forecasts are received .
the methodology and price proxy definitions used in the input price indexes are described in the federal register notices that accompany the revisions of the pps , hha , and snf cost limits .
a description of the current structure of the pps input price index was published in the september 4 , 1990 federal register .
the most recent pps update for payment rates was published in the september 1 , 1992 federal register .
the latest hha regulatory input price index was published in the july 1 , 1992 federal register , and the latest snf input price index was published in the october 7 , 1992 federal register .
periodically , the input price indexes are revised to a new base year so that cost weights will reflect changes in the mix of goods and services that are purchased .
each revision allows for new base weights , a new base year , and changes to certain price variables used for price proxies .
each input price index is presented in two tables : the first is a percent - change table , and the second provides the actual index numbers from which the percentages were computed .
figure 5 shows a comparison in the growth of the pps input price index with the cpi all items .
bls publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services .
tables 6 and 7 and figure 4 present information on the consumer price index ( cpi ) for all urban consumers that measures changes in prices faced by 80 percent of the non - institutionalized population in the united states .
( the more restrictive wage earner cpi gauges prices faced by wage earners and clerical workers
. these workers account for 32 percent of the non - institutionalized population [ u.s .
the index reflects changes in prices charged for the same quality and quantity of goods or services purchased in the base period . for most items , the base period of 1982 - 84 is used to define the share of consumer expenditures purchasing specific services and products .
those shares or weights remain constant in all years , even though consumption patterns of the household may change over time .
cpis for health care goods and services depict price changes for out - of - pocket expenditures made directly by consumers .
the composite cpi for medical care weights together product - specific or service - specific cpis in proportion to household out - of - pocket expenditures for these items .
for example , the composite medical care cpi measures inflation for the 3 percent of hospital expenditures that are made out - of - pocket by consumers ; the remaining 97 percent of the costs of hospital care paid by private health insurers , medicare , medicaid , and other payers are not weighted into the cpi for medical care .
in addition , some medical care sector indexes measure changes in list or charged prices , rather than in the prices actually received by providers after discounts are deducted . in several health care areas , received or transaction prices are difficult to capture , although bls is making advances in this area . in the nhe , a combination of cpis for selected medical care items , input price indexes for nursing homes , and the cpi for hospital and related services , adjusted by the health care financing administration ( hcfa ) to provide transaction price changes , are used as measures of inflation for the health industry .
the indexes are used to develop a fixed - weight price index for personal health care to depict price changes affecting the entire health care industry more accurately than does the overall cpi medical care index ( letsch , 1993 ) .
in 1979 , hcfa developed the medicare hospital input price index ( hospital market basket ) , which was designed to measure the pure price changes associated with expenditure changes for hospital services . in the early 1980s ,
the skilled nursing facility ( snf ) and home health agency ( hha ) input price indexes , often referred to as  market baskets ,  were developed to price a consistent set of goods and services over time .
also , in the early 1980s , the original medicare hospital input price index was revised for use in updating payment rates for the prospective payment system ( pps ) .
all of these indexes have played an important role in helping to set medicare payment percent increases , and in understanding the contribution of input price increases to growing health expenditures .
the input price indexes , or market baskets , are laspeyres or fixed - weight indexes that are constructed in two steps .
for example , for the pps hospital input price index , the base period is 1987 .
cost categories , such as food , fuel , and labor , are identified and their 1987 expenditure amounts determined .
second , a price proxy is selected to match each expenditure category : its purpose is to measure the rate of price increase of the goods or services in that category . the price proxy index for each spending category
the sum of these products ( weights multiplied by the price index ) over all cost categories yields the composite input price index for any given time period , usually a fiscal year or a calendar year .
the percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider .
the input price indexes are estimated on a historical basis and forecasted over several years .
the hcfa - chosen price proxies are forecasted under contract with data resources , inc./mcgraw - hill ( dri ) . following every calendar year quarter , in march , june , september , and december , dri updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions .
some of the data in tables 8 through 13 are forecasted , and are expected to change as more recent historical data become available and subsequent quarterly forecasts are received . the methodology and price proxy definitions used in the input price indexes
are described in the federal register notices that accompany the revisions of the pps , hha , and snf cost limits .
a description of the current structure of the pps input price index was published in the september 4 , 1990 federal register .
the most recent pps update for payment rates was published in the september 1 , 1992 federal register .
the latest hha regulatory input price index was published in the july 1 , 1992 federal register , and the latest snf input price index was published in the october 7 , 1992 federal register .
periodically , the input price indexes are revised to a new base year so that cost weights will reflect changes in the mix of goods and services that are purchased .
each revision allows for new base weights , a new base year , and changes to certain price variables used for price proxies .
each input price index is presented in two tables : the first is a percent - change table , and the second provides the actual index numbers from which the percentages were computed .
figure 5 shows a comparison in the growth of the pps input price index with the cpi all items .
national economic indicators provide a context for understanding health - specific indicators and how change in the health sector relates to change in the economy as a whole .
tables 14 and 15 and figure 6 present national indicators of output , employment , and inflation .
economy as the value of output produced within the geographic boundaries of the united states by u.s . or foreign citizens or companies .
real  gdp removes the effects of prices from the valuation of goods and services produced , so that the growth of real gdp reflects changes in the  physical  output of the economy ( u.s . department of commerce , 1993 ) .
growth in operating expenses for community hospitals slowed considerably in the first quarter of 1993 , increasing 7.5 percent .
the deceleration continued steadily throughout 1992 , but appears to have leveled off in the first quarter of 1993 . all measures of utilization  admissions , inpatient days , surgical operations , and outpatient visits
 grew more slowly or decelerated faster than they had during the first quarter of 1992 at the height of the flu epidemic .
total employment in the health service sector continued to grow at nearly the same rate as in 1992 . in the first quarter of 1993 , there were 360,900 more health services jobs than in the first quarter of 1992 , an increase of 4.3 percent . for non - supervisory workers ,
the health service sector , maintaining steady employment growth during 1991 , appeared immune to the recent recession marked by sagging total private sector employment growth .
in the past three quarters , growth in health services employment also appears to be unaffected by the recent upsurge in employment growth for all private , non - agricultural establishments , as health sector employment growth remains steady ( figure 2 ) .
implied work hours ( the product of the number of non - supervisory employees and average weekly hours ) in private health service establishments grew at a rate lower than in any quarter since 1987 , 3.7 percent .
slow growth was caused by the decline in average hours worked per week , rather than a slowing in employment growth .
this may signal an impending slowdown in employment for the health service sector , as employers initially cut work hours rather than lay off workers when faced with falling demand for services .
growth for implied payroll ( work hours times average hourly earnings ) in private health service establishments was also at its lowest since 1987 .
growth in implied payroll for private hospitals has followed this trend as well , and may be one reason for the deceleration in operating - expense growth seen in the aha panel survey ( as previously noted ) .
medical prices , as measured by the cpi for medical care , continued to increase more rapidly than prices for all other items . in the first quarter of 1993 , prices for medical care increased 6.3 percent from the first quarter of 1992 , more than two times the 2.9-percent growth for all other items .
however , the gap between price increases for medical care and all other items has gotten smaller than what it was throughout 1992 ( figure 4 ) . although growth for nearly all components of the medical care cpi has decelerated , the most dramatic slowdown in growth occurred with the prices of prescription drugs . in calendar year 1991 , the cpi for prescription drugs increased 9.9 percent . in 1992
first , there has been a price war among retail establishments selling prescription drugs . as the number of non - traditional types of retail outlets has grown , competition against the traditional retail pharmaceutical outlets increased .
mass - merchandisers , such as walmart , are competing for the business of prescription drug customers .
secondly , recent proposals on health care reform have pharmaceutical manufacturers concerned about the free - market privileges from which they have historically benefitted .
conceivably , manufacturers and wholesalers have been voluntarily holding pricing down in an effort to avoid being faced with less desirable , mandatory price controls . evidence of the behavior of drug manufacturers can be found in the producer price index ( ppi ) for pharmaceuticals , which measures average changes in prices received by domestic producers of commodities in all stages of processing .
growth in the ppi for pharmaceuticals decelerated at nearly the same rate as the cpi for prescription drugs . in calendar year 1991 , the ppi for pharmaceuticals increased 8.4 percent . by the first quarter of 1993 , growth in this ppi slowed to 4.6 percent .
in the first quarter of 1993 , overall economic conditions continued to improve modestly , as shown by the eighth straight quarter of positive growth in real gdp .
the unemployment rate ( 7.0 percent ) was lower than it had been since the fourth quarter of 1991 .
total employment in private non - agricultural establishments increased 1.3 percent , which is the largest increase experienced in nearly 3 years .
growth in operating expenses for community hospitals slowed considerably in the first quarter of 1993 , increasing 7.5 percent .
the deceleration continued steadily throughout 1992 , but appears to have leveled off in the first quarter of 1993 . all measures of utilization  admissions , inpatient days , surgical operations , and outpatient visits
 grew more slowly or decelerated faster than they had during the first quarter of 1992 at the height of the flu epidemic .
total employment in the health service sector continued to grow at nearly the same rate as in 1992 . in the first quarter of 1993 , there were 360,900 more health services jobs than in the first quarter of 1992 , an increase of 4.3 percent . for non - supervisory workers ,
the health service sector , maintaining steady employment growth during 1991 , appeared immune to the recent recession marked by sagging total private sector employment growth . in the past three quarters , growth in health services employment also appears to be unaffected by the recent upsurge in employment growth for all private , non - agricultural establishments , as health sector employment growth remains steady ( figure 2 ) . implied work hours ( the product of the number of non - supervisory employees and average weekly hours ) in private health service establishments grew at a rate lower than in any quarter since 1987 , 3.7 percent .
slow growth was caused by the decline in average hours worked per week , rather than a slowing in employment growth .
this may signal an impending slowdown in employment for the health service sector , as employers initially cut work hours rather than lay off workers when faced with falling demand for services . growth for implied payroll ( work hours times average hourly earnings ) in private health service establishments was also at its lowest since 1987 .
growth in implied payroll for private hospitals has followed this trend as well , and may be one reason for the deceleration in operating - expense growth seen in the aha panel survey ( as previously noted ) .
medical prices , as measured by the cpi for medical care , continued to increase more rapidly than prices for all other items . in the first quarter of 1993 , prices for medical care increased 6.3 percent from the first quarter of 1992 , more than two times the 2.9-percent growth for all other items .
however , the gap between price increases for medical care and all other items has gotten smaller than what it was throughout 1992 ( figure 4 ) . although growth for nearly all components of the medical care cpi has decelerated , the most dramatic slowdown in growth occurred with the prices of prescription drugs . in calendar year 1991 , the cpi for prescription drugs increased 9.9 percent . in 1992
this growth decelerated to 7.6 percent . by the first quarter of 1993 , it slowed further to only 5.0 percent .
as the number of non - traditional types of retail outlets has grown , competition against the traditional retail pharmaceutical outlets increased .
mass - merchandisers , such as walmart , are competing for the business of prescription drug customers .
secondly , recent proposals on health care reform have pharmaceutical manufacturers concerned about the free - market privileges from which they have historically benefitted .
conceivably , manufacturers and wholesalers have been voluntarily holding pricing down in an effort to avoid being faced with less desirable , mandatory price controls .
evidence of the behavior of drug manufacturers can be found in the producer price index ( ppi ) for pharmaceuticals , which measures average changes in prices received by domestic producers of commodities in all stages of processing .
growth in the ppi for pharmaceuticals decelerated at nearly the same rate as the cpi for prescription drugs . in calendar year 1991 , the ppi for pharmaceuticals increased 8.4 percent . by the first quarter of 1993 ,
, overall economic conditions continued to improve modestly , as shown by the eighth straight quarter of positive growth in real gdp .
the unemployment rate ( 7.0 percent ) was lower than it had been since the fourth quarter of 1991 .
total employment in private non - agricultural establishments increased 1.3 percent , which is the largest increase experienced in nearly 3 years .
 this regular feature of the journal includes a discussion of each of the following four topics : community hospital statistics ; employment , hours , and earnings in the private health sector ; health care prices ; and national economic indicators . 
 these statistics are valuable in their own right 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 . 
Introduction
Community Hospital Statistics
Private Health Sector: Employment, Hours, and Earnings
Prices
Consumer Prices
Background on Input Price Indexes
National Economic Indicators
First Quarter Indicators