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 quarterly statistics for 1992 , and the calendar year aggregation of quarterly information for the past 3 to 10 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 discuss the sources of this information , and then describe how it can be used to predict trends in health care expenditure and the share of national economic activity that is consumed by health care purchases .
since 1963 , the american hospital association ( aha ) , in cooperation with member hospitals , has collected 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 - 92 ) . in tables 1 and 2 ,
statistics covering expenses , utilization , beds , and personnel depict trends in the operation of community hospitals annually since 1983 and quarterly for 1992 .
figures 1 and 2 show annual changes in various measures of hospital utilization for 1981 - 92 . 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 350,000 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 , 1991 ) .
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 , as either 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 3 present statistics on employment , average hourly earnings , and average weekly hours in private ( non - government ) health service establishments .
similar statistics for the all 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 4 shows annual changes in non - supervisory payroll for 1983 - 92 . 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 5 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 .
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 by consumers directly .
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 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 , an input price index for nursing homes , and the bls cpi for hospital and related services adjusted by 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 prospective payment system ( pps ) hospital input price index 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 .
they have played an important role in helping to set 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
the purpose of the price proxy is to measure the rate of price increase of the goods or services in that expenditure category .
the price proxy index for each spending category is multiplied by the expenditure weight for the 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 out 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 813 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 september 4 , 1990 ( federal register , 1990 ) .
the most recent pps update for payment rates was published in the september 1,1992 ( federal register , 1992a ) .
the latest hha regulatory input price index was published july 1,1992 ( federal register , 1992b ) , and the latest snf input price index was published october 7,1992 ( federal register , 1992c ) .
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 .
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 5 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 .
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 by consumers directly .
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 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 , an input price index for nursing homes , and the bls cpi for hospital and related services adjusted by 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 prospective payment system ( pps ) hospital input price index 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 .
they have played an important role in helping to set 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 purpose of the price proxy is to measure the rate of price increase of the goods or services in that expenditure category .
the price proxy index for each spending category is multiplied by the expenditure weight for the 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 out 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 813 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 september 4 , 1990 ( federal register , 1990 ) .
the most recent pps update for payment rates was published in the september 1,1992 ( federal register , 1992a ) .
the latest hha regulatory input price index was published july 1,1992 ( federal register , 1992b ) , and the latest snf input price index was published october 7,1992 ( federal register , 1992c ) .
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 .
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 , 1992 ) .
indicators can be used to predict the share of gdp allocated to health care prior to the availability of more complete health expenditure data .
growth rates for five major components of national health expenditures ( nhe ) can be estimated using growth rates of selected statistics shown in tables 110 .
the major components are hospital care , physician services , dental services , drugs and other non - durable medical products , and nursing home care . during the past decade
an expected range for the share of gdp consumed by health care can be determined from the five estimated components . in 1992 ,
most currently available indicators show some degree of deceleration in growth when compared with growth in 1991 .
first , the aha panel survey reports that growth in community hospital expenses ( table 2 ) and revenues were slower in 1992 than in 1991 by 0.6 and 0.9 percentage points respectively , which suggests growth in hospital expenditures will decelerate .
a preliminary measure of growth in expenditures for physician and dental services is the product of growth in bls - reported work hours ( table 5 ) and cpis ( table 7 ) . for physician services , a slight deceleration in growth
is observed in 1992 , as the product of growth in physician work hours and prices was 10.0 percent in 1992 , compared with 10.5 percent in 1991 . for dental services ,
a somewhat larger deceleration occurred from 1991 to 1992 , as the product of growth in dental work hours and prices was 10.1 percent in 1991 and 8.6 percent in 1992 .
growth in expenditures for retail purchases of drugs and other medical non - durables has been close to growth of the cpi for prescription drugs . in 1992 ,
the cpi showed prices for prescription drugs grew 7.6 percent , a deceleration compared with the growth of 9.9 percent in 1991 ( table 7 ) .
trends in expenditures for nursing home care are approximated by the product of growth in bls work hours in nursing and personal care facilities ( table 5 ) and in the snf input price index ( table 10 ) . in 1992 ,
growth in this measure ( 8.2 percent ) was 1.9 percentage points slower than in 1991 , when the growth rate was 10.1 percent .
a preliminary 1992 estimate for the five major components of nhe is calculated by applying the predicted growth rates for 1992 to the 1991 nhe estimates for those sectors . from 1987 to 1991 , these five components have fallen as a share of total nhe , decreasing from 78.2 percent in 1987 to 76.5 percent in 1991 . by continuing this trend , a five - component share of nhe for 1992 is developed .
an estimate of nhe for 1992 is then made by dividing the sum of the five estimated components for 1992 by the 1992 five - component ratio . given this method , growth in nhe from 1991 to 1992 is likely to be 1 - 2 percentage points slower than the 11.4-percent growth experienced 1 year earlier .
although deceleration is expected in 1992 , nhe growth will still likely be double the growth in gdp , which increased at 4.8 percent . given these estimates , a range for health expenditures as a percent of gdp can be determined . in 1991 ,
health expenditures accounted for 13.2 percent of gdp , up from 12.2 percent in 1990 .
slow growth in gdp2.8 percent ( table 15) rather than accelerating health care spending , was largely responsible for the unprecedented 1.0 percentage point increase . in 1992
deceleration in health care indicator growth , combined with an acceleration in gdp growth , will likely result in this more moderate increase in the share of the nation 's resources devoted to health .
however , this 0.6 - 0.8 percentage point increase is still higher than the average 0.3 percentage point annual increase experienced in the 1980s .
indicators can be used to predict the share of gdp allocated to health care prior to the availability of more complete health expenditure data .
growth rates for five major components of national health expenditures ( nhe ) can be estimated using growth rates of selected statistics shown in tables 110 .
the major components are hospital care , physician services , dental services , drugs and other non - durable medical products , and nursing home care . during the past decade ,
an expected range for the share of gdp consumed by health care can be determined from the five estimated components . in 1992 ,
most currently available indicators show some degree of deceleration in growth when compared with growth in 1991 .
first , the aha panel survey reports that growth in community hospital expenses ( table 2 ) and revenues were slower in 1992 than in 1991 by 0.6 and 0.9 percentage points respectively , which suggests growth in hospital expenditures will decelerate .
a preliminary measure of growth in expenditures for physician and dental services is the product of growth in bls - reported work hours ( table 5 ) and cpis ( table 7 ) . for physician services , a slight deceleration in growth
is observed in 1992 , as the product of growth in physician work hours and prices was 10.0 percent in 1992 , compared with 10.5 percent in 1991 . for dental services , a somewhat larger deceleration occurred from 1991 to 1992 , as the product of growth in dental work hours and prices was 10.1 percent in 1991 and 8.6 percent in 1992 .
growth in expenditures for retail purchases of drugs and other medical non - durables has been close to growth of the cpi for prescription drugs . in 1992 ,
the cpi showed prices for prescription drugs grew 7.6 percent , a deceleration compared with the growth of 9.9 percent in 1991 ( table 7 ) .
trends in expenditures for nursing home care are approximated by the product of growth in bls work hours in nursing and personal care facilities ( table 5 ) and in the snf input price index ( table 10 ) . in 1992 ,
growth in this measure ( 8.2 percent ) was 1.9 percentage points slower than in 1991 , when the growth rate was 10.1 percent .
a preliminary 1992 estimate for the five major components of nhe is calculated by applying the predicted growth rates for 1992 to the 1991 nhe estimates for those sectors . from 1987 to 1991 ,
these five components have fallen as a share of total nhe , decreasing from 78.2 percent in 1987 to 76.5 percent in 1991 . by continuing this trend , a five - component share of nhe for 1992 is developed .
an estimate of nhe for 1992 is then made by dividing the sum of the five estimated components for 1992 by the 1992 five - component ratio . given this method , growth in nhe from 1991 to 1992 is likely to be 1 - 2 percentage points slower than the 11.4-percent growth experienced 1 year earlier .
although deceleration is expected in 1992 , nhe growth will still likely be double the growth in gdp , which increased at 4.8 percent . given these estimates , a range for health expenditures as a percent of gdp can be determined . in 1991 ,
health expenditures accounted for 13.2 percent of gdp , up from 12.2 percent in 1990 .
slow growth in gdp2.8 percent ( table 15) rather than accelerating health care spending , was largely responsible for the unprecedented 1.0 percentage point increase . in 1992
deceleration in health care indicator growth , combined with an acceleration in gdp growth , will likely result in this more moderate increase in the share of the nation 's resources devoted to health .
however , this 0.6 - 0.8 percentage point increase is still higher than the average 0.3 percentage point annual increase experienced in the 1980s .
 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 . 