Good news for hospital expenses

Inflation in the U.S. declined for a second month in May, an encouraging sign for the Federal Reserve, which is looking for indicators that it can begin lowering interest rates, according to Bloomberg

The U.S. inflation rate is at 3.27%, compared to 3.36% the previous month. The Consumer Price Index, a broad inflation gauge that measures a basket of goods and services costs across the U.S. economy, remained steady in May, but increased 3.3% from a year ago, according to the Bureau of Labor Statistics.

"Prices are still too high, but today's report shows welcome progress on lowering inflation, which was zero on a monthly basis in May and is down nearly two-thirds from its peak. Core inflation is at its lowest level since April 2021," the White House said in a June 12 statement. "Wages are rising faster than prices, and unemployment has remained at or below 4% for the longest stretch in 50 years."

The news is a positive sign for hospital expenses, which have been fueled by high levels of inflation as well as workforce shortages, leveling reimbursement and fractures in the supply chain for drugs and supplies.

Nationally, total expenses per calendar day dropped 4% from February to March, according to Kaufman Hall's most recent "National Hospital Flash Report." The two largest expense areas, labor and supply, dropped 1% and 6% respectively month over month. Drug expenses per calendar day decreased 8% while purchased service was down 7%.

However, expenses are still 18% to 20% higher than in 2021 and increased even over last year's numbers, according to Kaufman Hall.

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