Steep Hospital Costs Help Inflation Persist

American medical care costs have gone up, and that’s reportedly helped inflation remain high.

Hospital prices climbed 7.7% between April 2023 and April 2024, the biggest monthly increase since October 2010, The Wall Street Journal (WSJ) reported Thursday (May 16), citing data from the U.S. Department of Labor.

The report also included an analysis — performed for the WSJ by Turquoise Health — of recent price increases for specific procedures helping fuel this trend.

For example, the cost of performing an angioplasty on cardiac patients grew $670, or 4.5%, to $15,640 in the first squatter of the year, the report said. Intensive care for newborns now costs as much as $7,939 per day, a 5% increase. And breast biopsies performed with a needle rose $220 during the period, or 4.6%, to $5,027.

The first wave of inflation missed hospitals, as their prices were already set by contracts with health insurers, according to the report. However, inflation has begun to take hold as these healthcare providers have renegotiated prices. The reason: Hospitals need to pay for rising wages, with hiring in the health sector remaining robust.

Economists said they expect this trend to stick around as upheaval in the labor market continues to affect wages and health insurance contracts, per the report.

“We’re not expecting much slowing,” said Alan Detmeister, an economist for UBS. “This was a very large shock that we saw in the healthcare industry over COVID, and it takes years for those to pass through to the prices.”

The news came one day after the government released data showing inflation cooling, even though prices remain 22% higher than before the pandemic.

While some of the steepest price increases were for grocery and housing, PYMNTS Intelligence analysis of the data showed that medical care remains 10.2% higher than before COVID-19, while the cost of physicians’ services have gone up nearly 8%.

Healthcare is something many low-income Americans can’t easily pay for, according to research from the PYMNTS Intelligence’s “2024 Women’s Wellness Index.”

More than 6 in 10 U.S. consumers who earn less than $50,000 per year have under $500 on hand to cover medical emergencies. These Americans are nearly twice as likely as the average American to have poor health.