1. How is HealthINFLATION News used?
2. What is reported in HealthINFLATION News?
3. How often are HealthINFLATION News reports issued?
4. Who subscribes to HealthINFLATION News?
5. How can HealthINFLATION News be used in negotiations?
6. Can HealthINFLATION News be used to forecast inflation?
7. What is the source of HealthINFLATION News data?
8. What is the difference between health care utilization and health care expenditures?

• Improved negotiations for medical services and products
• Better understanding of inflation trends in the medical profession
• Ability to know how different sectors of Professional Care, Hospital Care and Medical Equipment & Supplies impact medical inflation
• Understand how medical inflation varies across U.S. regions and metropolitan areas

• Physician Care
• Dental Care
• Eye Care

• Inpatient Hospital Care
• Outpatient Hospital Care
• Nursing Home Care
• Home Care

• Prescription Drugs
• Nonprescription Drugs
• Medical Equipment & Supplies

• West
• Midwest
• South
• Northeast

• Atlanta
• Baltimore, Washington D.C.
• Boston
• Chicago
• Cleveland
• Dallas-Forth Worth
• Detroit
• Houston
• Los Angeles
• Miami
• New York
• Philadelphia
• San Francisco
• Seattle

• Hospital Care
• Medical Commodities
• Physician Care
• Medical Laboratories
• Nursing Home Care
• Pharmaceuticals

• Insurance companies
• Health care benefits managers and consultants
• Hospitals
• Unions
• University medical clinics
• State health care service agencies
• Pharmaceutical companies
• and others

The Consumer Price Index (CPI) measures the average change in the prices paid for a market basket of goods and services. Escalation agreements typically use the Consumer Price Index for All Urban Consumers (CPI-U) or Salaried Workers and Wage Earners (CPI-W).  

The following guidelines are suggested for drafting contract escalation clauses is suggested by the U.S. Bureau of Labor Statistics:

1. Define the base payment (All Health Care, Hospital Care, Physician Care,  Prescription Drugs, etc.).  Although widely relied on as the reference for leases labor union contracts, and Social Security benefits, the CPI for All Goods and Services is often not the appropriate index for health care financial managers. If the purpose of a contract escalation is to preserve purchasing power, as may be the case when negotiating for nurse or lab technician salaries, the CPI may be the appropriate reference.
2. Identify the CPI index series that will be used to escalate the base payment. This should include: The population coverage (i.e. CPI-U), area coverage (U.S. City Average, West Region, Chicago, etc.), series title (all items, rent of primary residence, etc.), and index base period (i.e. 1982-84=100).  
        Note: HealthINFLATION News uses nonseasnonally adjusted Consumer Price Index data for All Urban Consumers.
3. Specify a reference period from which changes in the CPI will be measured. This is usually a single month. The CPI does not correspond to a specific day or week of the month) or an annual average. 
4. Specify the frequency of adjustment. Adjustments are usually made at fixed time intervals, such as quarterly, semiannually, or, most often, annually.
5. Determine the formula for the adjustment calculation. Usually the change in payments is directly proportional to the percent change in the CPI index between two specified time periods. Consider whether to make an allowance for a "cap" that places an upper limit to the increase in wages, rents, etc., or a "floor" that promises a minimum increase regardless of the percent change (up or down) in the CPI.
6. Account for situations such as CPI revisions or changes in the CPI index base period. The Bureau provides timely notification of upcoming revisions or changes in the index base.

Forecasts for the Consumer Price Index (CPI) are available from:

The Center for International Business Cycle Research

Blue Chip Economic Indicators