With the Federal Reserve coming to terms with inflation, and the reality of rising prices, regulators are finally emerging from denial. For months now, we were told inflation was transitory. By a standard definition, transitory means; not permanent. According to Bloomberg.com, when it comes to ‘fed speak’ however, transitory in the context of inflation actually means; “price increases aren’t permanent, but they may not be short-lived either.”
Regardless of how we define it, for the average American, inflation is everywhere. Drivers can attest to higher fuel prices, we’re all paying more for groceries, and the cost of housing — whether purchasing or renting — has risen. Almost anywhere you look, prices are higher today than they were the same time last year. According to the Bureau of Labor Statistics; “The all time index rose 6.8 percent for the 12 months ending November, the largest 12-month increase since the period ending June 1982.”
When it comes to price increases generally, historically, one sector of the economy tends to outpace inflation. In America, healthcare, which continues falling short when it comes to price transparency, is more expensive than anywhere else in the world. In all likelihood, inflation may have a greater impact on this sector than consumer staples, fuel, or housing.
Sticker shock when it comes to medical bills isn’t exactly breaking news. Historically, health care prices have risen faster than inflation. Disruptions incurred from a two year pandemic may play an outsized role when it comes to rising prices moving forward.
For one thing, hospitals are hemorrhaging money. In May of 2020, The American Hospital Association released a report analyzing financial information from major health systems. Over a four month period — March 1st 2020 to June 30th 2020 — hospital system losses exceeded $200 Billion. Areas contributing to the financial pressure included; drug shortage costs, increased wages, rising costs for medical supplies, as well as capital spending.
We’ve all become familiar with supply chain disruptions, bottlenecks in this sector are the primary…