Skip to main content
The FRED® Blog

The high(er) price of health

Our purchases cost more and more over time, given inflation. Tracking the price index for personal consumption expenditures is one way to measure inflation. And the FRED graph above shows that, since 2000, personal consumption expenditures (purple line) have become 40% more expensive. This amounts to an annual rate of inflation of about 1.8%.

Price indexes can be computed for specific spending categories as well—such as food, energy, and health. The Health Expenditures Price index is also shown in this graph (blue line): It’s the way the Bureau of Economic Analysis tracks the price of heath expenditures for households.

The graph reveals how much faster the price of health expenditures is growing relative to the price of general consumption expenditures: It took 19 years for general consumption expenditures to become 40% more expensive, while it took only 7 years for health expenditures to do that. So, the inflation rate for health expenditures is much higher: 3.7% per year.

How this graph was created: On FRED’s main page, search for “Personal Consumption Expenditures”; find and select “Personal Consumption Expenditures: Chain-Type Price Index.” Use the “Edit Graph” menu’s “Add Line” option to search for “Blended” and select “Health Expenditures Price Index, Blended Account Basis.” Click on “Add data series.” In the Units box, choose “Index (Scale value to 100 for chosen date)” and choose the year 2000. Then click “Copy to all.” Return to the graph and restrict the view to 2000-01-01 to 2020-01-01.

Suggested by Guillaume Vandenbroucke.

View on FRED, series used in this post: HLTHSCPIBLEND, PCEPI

What’s the story with health care spending?

A look at per capita personal expenditures by state

The map above shows spending on health care per person in each U.S. state, with darker colors indicating higher amounts. Various factors in each state influence the composition of these expenditures: the age structure of the population, income level, level of competition among health care providers, and local policies and regulations. Thus, everyone can develop an interpretation of why some states spend more on health care based on, for example, older populations, higher incomes, greater market power of health care providers, and policies that lead to more spending.

As it turns out, the story hasn’t changed much over the past 20 years. The map below shows that expenditures in 1997 don’t look much different from expenditures in 2017. Relatively speaking, of course: Expenditures have at least doubled since then, but the fundamental forces that drive health care costs across states seem persistent. For example, New York, Pennsylvania, and New Jersey still spend more than Virginia, Kentucky, and Tennessee, which still spend more than Utah, Nevada, and Arizona.

How these maps were created: On GeoFRED, go to the state-level maps, open the cogwheel in the upper-left corner, and select the series “Per Capita Personal Consumption Expenditures: Services: Health Care.” For the second map, simply change the date.

Suggested by Christian Zimmermann.

Where health is lacking

Mapping public health issues with GeoFRED

GeoFRED maps can help us understand a lot of things, including trends in regional socioeconomic data, which could ultimately provide insights for policy recommendations. In this post, we look at two important indicators of health throughout the United States: premature deaths and preventable hospital admissions. High levels of premature deaths indicate issues with public health. (See a previous blog post for some background on this concept.) The South has a comparatively higher concentration of high rates in this area.

The maps show a correlation between areas that suffer from high rates of premature death and areas that have a high rate of preventable hospital admissions, which is defined as stays in acute-care hospitals that could have been taken care of in ambulatory or ordinary inpatient settings, adjusted for socioeconomic factors. Examples are pneumonia, diabetes, and dehydration. A high rate of these admissions indicates that more people are lacking appropriate health options, likely leading to more preventable deaths.

While regional trends and correlations do not indicate causation, a review of interconnected socioeconomic patterns over several years can be useful for understanding persistent problems in certain areas. Refer to GeoFRED for related maps on race, income inequality, homeownership, burdened homeowners, and disconnected youth.

How these maps were created: Premature Death: From GeoFRED, click on “Build New Map.” Under the “Tools” menu, select “County” in the region type search bar. For the first map, enter “premature death” in the data search bar and then select “Age-Adjusted Premature Death Rate”; for the second map, enter “preventable hospital admissions” in the data search bar and then select “Rate of Preventable Hospital Admissions.”

Suggested by Samantha Kiss and Christian Zimmermann.



Subscribe to the FRED newsletter


Follow us

Back to Top