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Price of health care rising faster than inflation

inflationInflation is being significantly outpaced by health care prices, according to a new study by the Health Care Cost Institute (HCCI).

Prices have increased in 111 of 112 metro areas over a five-year-period, the study found. Price levels and growth rates vary widely for localities, but Modern Healthcare reports that many economists attribute higher prices to a lack of competition among health care institutions.

In Portland and Seattle, the price of health care was 7 percent higher than the national average in 2016.

Bill Johnson, author of the report and senior researcher at HCCI, found that health care prices rose about 16 percent, which is around three times the inflation rate.

“Prices aren’t going down virtually anywhere, no matter where you are looking,” Johnson told Modern Healthcare.

The article also points to the type of competitors as a cause for high health care prices. Institutions with higher built-in costs related to emergency services and specialized equipment can drive prices higher.

Kevin Kennedy, an HCCI researcher, told Modern Healthcare that future HCCI studies will explore provider competition, service use, total spending and waste.

“We hope this data directs stakeholders and policymakers and gives them the right mindset as they look to affect health care pricing,” he said.