A Longer Look at Medical Inflation

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


Eric Morath of the Wall Street Journal reports today that “U.S. health-care costs fell in May for the first time in almost four decades, the latest evidence that government policies and an expansion in generic drugs are constraining prices.”

Maybe. But I’d like to push back on this once again. The chart on the right shows real medical inflation—that is, medical inflation above and beyond overall inflation. As you can see, over the past 30 years it’s been on a noisy but fairly steady downward path. Each peak is lower than the previous one, and the same is true of each trough. If anything, though, this trend has slowed a bit over the past decade. It’s still on a downward slope, but it strikes me as unlikely that government policies have had an awful lot to do with this.

For a somewhat more pessimistic view, take a look at the chart below, which goes back 60 years. Aside from the noise, what you mainly see is a spike in the 1980s, followed by a reversion to the long-term average of about 1.5 percent. In other words, it’s possible that we overreacted to what turned out to be a fairly short-lived swell from about 1983 to 1993 and are now overreacting to the fact that we’ve returned to our long-term average. If this view is accurate, it means that medical inflation has been outrunning overall inflation by about 1.5 percentage points ever since the 1950s, and, roughly speaking, that’s still the case. There’s been a bit of a slowdown over the past decade, but only a bit.

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate