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.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend

Latest