The real story on health care costs is deeper than one cherry-picked statistic

Health care costs and hospital prices in particular continue to make headlines. And yet, much of the data used to tell this story is misleading. Often, important facts are omitted in order to make a more compelling case. 

As has become typical, a recent blog from the American Enterprise Institute used Consumer Price Index (CPI) data to paint the starkest possible picture of hospital prices — in this case by showing the cumulative increase in consumer out-of-pocket prices over a 20-year period rather than focusing on efforts made by hospitals and health systems in recent years to contain costs. 

The Bureau of Labor Statistics (BLS) released its June 2019 CPI report last week and, consistent with trends in recent years, hospital price growth continues to be incredibly modest. In fact, the BLS report showed that in June 2019, hospital prices actually decreased by 0.1%. The year-over-year change in hospital prices in June was 0.5% compared to 2.8% for medical care services generally and 1.6% for all items in the CPI. 

Hospitals and health systems are transforming how care is delivered to improve quality and make care more affordable for patients. Hospitals have invested hundreds of billions over the past decade (more than $62 billion in 2017 alone) in electronic health records and other IT systems that support secure information sharing. These investments enable hospitals to participate in new payment models that incentivize quality and value rather than volume. And, these investments are a critical first step in bringing information to patients and their providers, to help improve care coordination and educate patients about the cost of care. 

Hospitals are taking these steps now toward better, more affordable care, and the data show they are having a real impact.

Ashley Thompson is AHA senior vice president of public policy analysis and development.