How serious is “medical care” inflation in the United States? For many years, price indexes for medical care have outstripped the overall rate of inflation. For example, between 1986 and 1996, the medical care component of the Consumer Price Index (CPI) rose 6.5 per cent per year, which far exceeds the 3.6 percent annual increase in the overall CPI during this period.
However, constructing accurate price indexes for medical markets is especially difficult,
and many economists believe that economic statistics on medical care do not accurately measure medical care price changes. Some very recent research, reported in this volume, suggests that—contrary to the usual presumption of runaway medical inflation—prices for at least some medical care interventions are not rising rapidly and may even be falling.