The FRED Blog has tapped into US Bureau of Economic Analysis data before to discuss the small regional differences in the price of goods and the much larger regional differences in the price of housing. Today, we tap into US Bureau of Labor Statistics data to compare differences in medical care consumer prices across urban areas.

The FRED graph above shows the annual inflation rate, calculated as the percent growth rate from the previous year, in medical care service prices recorded in eight core-based statistical areas (CBSAs). These geographies are urban clusters with high degrees of social and economic integration.*

Medical care prices vary quite a bit from year to year and across regions. Consider, for example, the year 2018 and the urban areas of Denver-Aurora-Lakewood, CO, and Tampa-St. Petersburg-Clearwater, FL. The former recorded 6% annual inflation and the latter 4% annual deflation.

Does this price variability indicate there are different constraints to the demand and supply of medical care across regions? Maybe. Perhaps medical services aren’t highly mobile and local changes to the quantity and use of those services result in large price changes. On the other hand, research by James Choy at the BEA reports estimates of regional price levels for health-related goods and services that are stable across years and that vary less across regions than existing estimates obtained using CPI data. Answering this question more precisely requires more research.

* To look for data on other CBSAs, navigate FRED to Consumer Price Index by Expenditure Category > CPI for Metropolitan Areas and search the alphabetical list of geographies.

How this graph was created: Search FRED for and select “Consumer Price Index for All Urban Consumers: Medical care in Boston-Cambridge-Newton, MA-NH (CBSA).” Click “Edit Graph” and select the “Add Line” tab to search for “Consumer Price Index for All Urban Consumers: Medical care in Dallas-Fort Worth-Arlington, TX.” Don’t forget to click “Add data series.” Repeat this step to add the other six data series shown in the graph. Use the “Edit Lines” tab to select any of the lines shown in the graph. Use the “Units” dropdown menu to select “Percent Change from Year Ago” and click on “Copy to all.” Last, use the “Format” tab to change the “Graph type” to “Bar.”

Suggested by Diego Mendez-Carbajo.