Last Wednesday, the Bureau of Labor Statistics issued its Consumer Price Index Report for May, 2025: “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% on a seasonally adjusted basis in May, after rising 0.2% in April. Over the last 12 months, the all-items index increased 2.4% before seasonal adjustment.”
The CPI is closely watched by economists and elected officials who monitor consumer spending as a key indicator of inflation. It’s been around since 1913 with its baseline set at 100 in 1982.
In the May report, price increases settled at a more predictable level: concerns about the impact of tariffs seem abated somewhat and consumer sentiment about the economy showed slight improvement: the University of Michigan Index of Consumer Sentiment released last Friday for June was 60.5, above its 52.2 low in May and the first increase the index had marked in six months though 18% lower than its December 2024 post-election peak.
For the last 12 months, prices were up 2.4%, but essentials—food, energy and housing which account for 55.47% of CPI weighting were slightly higher:
| All Items | Food | Energy | Shelter | Medical Products | Medical
Services |
|
| Relative Importance | 100% | 13.64% | 6.39% | 35.44% | 1.51% | 6.74% |
| May ‘25 vs. June ‘24 | +0.1% | +0.3% | -0.1% | +0.3% | +0.6% | +0.2% |
| Last 12 Months (5/25 vs. 6/24) | +2.4% | +2.9% | +3.8% | +3.6% | +0.3% | +3.0% |
Healthcare prices for goods and services account for 8.25% of the CPI—more than energy, fuel and transportation costs but decidedly less than food and housing. Prices for healthcare in May were in sync with other necessities, but not uniform across major categories: prices for eye and dental care were above the overall CPI while physician services prices were below.
| Physician
Services |
Dental
Services |
Eyeglasses
& Eyecare |
Others | |
| Relative Importance | 1.81% | 0.93% | 0.33 | 0.59 |
| May ’25 vs. June ‘24 | +0.3% | +0.3% | -0.4% | +0.6% |
| Last 12 Months (5/25 vs. 6/24) | -0.3% | -0.2% | +0.3% | +0.1% |
| Change since Jan 2022 | +4.7% | +14.6% | +9.0% | NA |
Prices for facility-based services increased slightly, especially nursing homes and hospital outpatient services but lower than the overall index. And health insurer prices were in-line with overall facility-based prices.
| Hospital +Related | Hospital
|
IP
Hospital |
OP Hospital | Nursing Homes | In home
Services |
Health Insurance | |
| Relative Importance | 2.23% | 1.95% | NA | NA | 0.17% | 0.16% | 0.79% |
| May ’25 vs. June ‘24 | +0.5% | +0.6% | +0.4% | +0.7% | + 0.13% | NA | +0.4% |
| Last 12 Months (5/25 vs. 6/24) | +0.4% | +0.4% | -0.1% | +0.8% | +1.1% | NA | +0.2% |
In its report, BLS noted: “The medical care index increased 0.3% over the month, following a 0.5% increase in April. The index for hospital services increased 0.4% in May and the index for prescription drugs rose 0.6%. The physicians’ services index fell 0.3% over the month.”
My take:
These data show recent healthcare prices in line with increases in other sectors of the economy: that’s a good news-bad news scenario for operators.
It’s good news that in the aggregate: healthcare prices overall are not outliers relative to other sectors. And it’s good news for the Department of Government Efficiency’s (DOGE) post-Musk efforts to reduce federal spending since healthcare’s 28% of the total spend and a popular target for claims of inefficiency and waste..
It’s bad news for physicians already experiencing chronic underfunding relative to inflation and practice operating costs. It’s bad news for employers whose employee health benefits costs have increased 3 times faster than wages due to cost-shifting to commercial payers by providers . It’s bad news for states where shortfalls and cuts will be felt hardest. It’s bad news for hospitals that have used outpatient prices to offset inpatient operating losses. And it’s bad news for lower and lower-middle income households for whom healthcare costs range from 13-20% of their income (vs. 8% in higher income household settings).
The public’s appetite to slow health spending, expose prices and costs and address the system’s waste, fraud and abuse is strong and growing. It’s certain to figure prominently in Congress’ budget negotiations and increasingly in household spending decisions.
The CPI is a lag indicator. It does not foretell the health economy of the future. That’s the discussion that’s needed.
Paul
Resources
- Consumer Price Index – May 2025
- University of Michigan Index of Consumer Sentiment June 13, 2025 https://www.sca.isr.umich.edu/
Quotable
AMA Chair on AMA advocacy to House of Delegates: “For over 178 years, the AMA has been the voice of American medicine,” said Michael Suk, MD, chair of the AMA Board of Trustees. “But let us be honest — we recognize that at times we could have been more forceful, spoken louder. We could have spoken earlier and more publicly in the defense of science, the patient-physician relationship, and the integrity of our profession. “To this House, we thank you, your work, your policy, your persistent voice has held the line and often led the way,” he continued. “Your leadership is not only valued, it is essential. We stand today to make it clear that we defend the integrity of medical education against politicization. We champion evidence-based care rooted in science, not sentiment. We reject disinformation and interference that undermines the future of medicine.”
AMA Annual Meeting of the House of Delegates June 6-11, 2025 Chicago The AMA Could Have Spoken Louder About Politicization, Board Chair Says | MedPage Today
CBO Budget Bill projection: “The Republican megabill now before the Senate cuts taxes for high earners and reduces benefits for the poor. If it’s enacted, that combination would make it more regressive than any major tax or entitlement law in decades. The bill as passed by the House in May would raise after-tax incomes for the highest-earning 10% of American households on average by 2.3% a year over the next decade, while lowering incomes for the poorest tenth by 3.9% according to new estimates by the Congressional Budget Office.”
Trump’s Big Bill Would Be More Regressive Than Any Major Law in Decades – The New York Times
Kennedy on ACIP Advisory Committee changes: “On Monday, I took a major step towards restoring public trust in vaccines by reconstituting the Advisory Committee for Immunization Practices (ACIP). I retired the 17 current members of the committee. I’m now repopulating ACIP with the eight new members who will attend ACIP’s scheduled June 25 meeting. The slate includes highly credentialed scientists, leading public-health experts, and some of America’s most accomplished physicians. All of these individuals are committed to evidence-based medicine, gold-standard science, and common sense. They have each committed to demanding definitive safety and efficacy data before making any new vaccine recommendations. The committee will review safety and efficacy data for the current schedule as well. “
Durbin-Bhattacharya Exchange in Senate Appropriations Subcommittee June 10, 2925 re: NIH Funding: “For God’s sake, we lead the world in medical research. Why would we give up on it?” Durbin asked. “How are you able to reconcile these budget decisions with the reality of research and what it means to alleviate suffering and, more importantly, to give people hope?”
“It is not my intention to walk away from that. I mean, I think that —,” Bhattacharya began before the Illinois senator interrupted.
“The budget speaks for itself. You cut $18 billion in research,” Durbin said.
Senators push back on proposed $18 billion NIH budget cut | STAT
Altman on ChatGPT, AI: “We are past the event horizon; the takeoff has started. Humanity is close to building digital superintelligence, and at least so far it’s much less weird than it seems like it should be…. AI will contribute to the world in many ways, but the gains to quality of life from AI driving faster scientific progress and increased productivity will be enormous; the future can be vastly better than the present. Scientific progress is the biggest driver of overall progress; it’s hugely exciting to think about how much more we could have.
In some big sense, ChatGPT is already more powerful than any human who has ever lived. Hundreds of millions of people rely on it every day and for increasingly important tasks; a small new capability can create a hugely positive impact; a small misalignment multiplied by hundreds of millions of people can cause a great deal of negative impact.”
The Gentle Singularity – Sam Altman
Pope Leo XIV on AI: “Sensing myself called to continue in this same path, I chose to take the name Leo XIV. There are different reasons for this, but mainly because Pope Leo XIII in his historic Encyclical Rerum Novarum addressed the social question in the context of the first great industrial revolution. In our own day, the Church offers to everyone the treasury of her social teaching in response to another industrial revolution and to developments in the field of artificial intelligence that pose new challenges for the defense of human dignity, justice and labor.”
Address of the Holy Father to the College of Cardinals (10 May 2025) | LEO XIV
American Enterprise Institute Report: The Housing Market: “Housing prices across much of America have hit historic highs, while less housing is being built. If the U.S. housing stock had expanded at the same rate from 2000-2020 as it did from 1980-2000, there would be 15 million more housing units. This paper analyzes the decline of America’s new housing supply, focusing on large sunbelt markets such as Atlanta, Dallas, Miami and Phoenix that were once building superstars. New housing growth rates have decreased and converged across these and many other metros, and prices have risen most where new supply has fallen the most. A model illustrates that structural estimation of long-term supply elasticity is difficult because variables that make places more attractive are likely to change neighborhood composition, which itself is likely to influence permitting. Our framework also suggests that as barriers to building become more important and heterogeneous across place, the positive connection between building and home prices and the negative connection between building and density will both attenuate. We document both of these trends throughout America’s housing markets. In the sunbelt, these changes manifest as substantially less building in lower density census tracts with higher home prices. America’s suburban frontier appears to be closing.”
AMERICA’S HOUSING SUPPLY PROBLEM: THE CLOSING OF THE SUBURBAN FRONTIER? Working Paper 33876 http://www.nber.org/papers/w33876May 2025 w33876.pdf
Hospitals
Senate Democrats on potential rural hospital closures: “In order to understand in greater detail how rural communities could be impacted by health care cuts contained in the reconciliation package, we requested…data from the Sheps Center on the financial vulnerability of rural hospitals and potential impacts on their viability. These hospitals have been identified as at-risk hospitals based on financial data, including: whether the hospital has been unprofitable for the last three years; whether the hospital is at risk of financial distress relative to peer hospitals; and whether the hospital serves a disproportionately high share of Medicaid patients… Altogether, 338 hospitals either experienced three consecutive years of negative total margins, serve the highest share of Medicaid patients or both. 83 rural hospitals are at the highest relative risk of financial distress based on a model that uses hospital financial performance, organizational trains, and market characteristics to predict future financial distress. “
Letter on Rural Hospitals June 12, 2025 to Congressional Leaders and President Trump from Senate Democrats Markey, Wyden, Berkley, Schumer
Insurers
AHIP study disputes MedPAC findings about MA plans: “A new analysis from Inovalon provides one of the most robust and detailed comparisons to date between Medicare Advantage (MA) and traditional Fee-for-Service (FFS) Medicare. Drawing on five years of real-world data spanning pre- and post-Medicare enrollment periods, Inovalon’s study disputes MedPAC’s longstanding claims of favorable selection in MA and concludes the opposite: there is no favorable selection in MA. In fact, the analysis finds that FFS enrollees are healthier and less socially vulnerable than MA enrollees.
Based on actual data from over 140 health plans and covering enrollees from 2018 to 2022, Inovalon evaluated beneficiaries who enrolled directly into MA versus FFS and compared matched cohorts during their first two years of enrollment. The results reinforce two critical findings about the MA program and enrollees:
- Prior to joining Medicare, those enrollees opting for MA are less healthy and incur higher health care costs than those choosing FFS; and
- During their first two years in Medicare, if FFS enrollees had instead received care under MA, their average costs would have been 11% lower.
By using actual MA encounter data — rather than relying on modeled projections based on FFS switchers — and fully adjusting for differences in beneficiary clinical, demographic, and socioeconomic characteristics, Inovalon’s analysis offers a more realistic, apples-to-apples comparison that fundamentally challenges MedPAC’s assertions.”
New Analysis Shows Medicare Advantage Outperforms… – AHIP
Report: Medicare supplemental benefits use: “Plans have only recently begun reporting utilization data on supplemental benefits, and public data are still limited. But what we do know suggests that actual use of supplemental benefits can be low – even for highly desired benefits like dental care. In 2024, three in ten plan enrollees reported using no supplemental benefits in the last year. Medicare Rights callers also report challenges with understanding whether they are eligible for supplemental benefits and how to access them….
Based on our experiences working with Medicare beneficiaries, the information people want or need to make informed decisions is often scattered or incomplete, making plan comparisons based on supplemental benefit offerings time intensive, frustrating, or even futile….
Medicare Advantage supplemental benefits can be beneficial for Medicare enrollees, but a lack of information makes the benefits hard to use and hinders informed plan choices.
Physicians
Outgoing AMA president Bruce A. Scott, MD, “I’m angry because physicians are bearing the brunt of a failed Medicare payment system…And while our pay has been cut by 33% in 25 years, we see hospitals and even insurance companies receiving annual increases.
I’m angry because earlier this year Medicare Advantage plans are rewarded with a scheduled increase while doctors suffer yet another cut—or, as one member in this House accurately said, a ‘gut punch to physicians.
What insurance companies are doing to our patients is wrong. Stepping between us and our patients is wrong. Denying necessary and even lifesaving care is just plain wrong. It’s no wonder that so many physicians are frustrated at a system that is undermining our judgment and eroding our patients’ trust.
While screaming from the window feels good, it’s not going to achieve the lasting results and change our health care system needs. That change will come from uniting as a profession. Channeling our anger into a unified voice. That’s the work of the AMA. Finding consensus on issues where disparate opinions exist—that’s why we’re all here. Our disagreements and debates aren’t symptoms of dysfunction; they are emblematic of our democratic process in action.”
Mayo: Physician Burnout and Satisfaction with Work-Life Balance
| Year | % Physicians Reporting at Least 1 Symptom of Burnout | % Physicians Satisfied with Work-Life Integration |
| 2023 | 45.2% | 42.2% |
| 2021 | 62.8% | 30.3% |
| 2020 | 38.2% | 46.1% |
| 2017 | 43.9% | 42.8% |
| 2014 | 54.4% | 40.9% |
| 2011 | 45.5% | 48.5% |
Polling
Harris Poll: consumer sentiment: “Americans are skeptical, exhausted, and bracing for economic uncertainty— again. After enduring months of inflation and a turbulent trade war, the U.S. and China 90-day pause made May 12 offers a glimmer of hope. However, it also raises fresh questions about the long-term outcomes of the agreement and the impact of other remaining high tariffs.” Highlights:
- 72%of Americans are concerned about tariffs– up 11% since mid-January
- 66% say the U.S. economy is worsening, leaving many feeling stuck.
- 60% expect tariffs to raise prices and 24% worry their retirement savings are at risk.
- 63% believe companies are taking advantage of the economic climate to boost profits
Public & Global Health
Study: U.S. mortality rates: “After decades of improvement, US mortality rate decreases have stagnated or reversed since 2010. Research suggests these trends are greatest among adults with lower educational attainment…We used National Health Interview Survey Linked Mortality File (1986-2018) estimates to correct for education misreporting on death certificates…. Results
We analyzed 47,545, 611 US deaths for 2006 to 2023. Mortality was markedly higher during the prepandemic, pandemic, and postpandemic periods (2011-2023) than would have been expected based on 2006-2010 trends for both male and female noncollege graduates. Excess deaths also occurred during 2011 to 2023 for male college graduates but to a lesser extent. Although COVID-19 was a leading cause of excess deaths, much of the increase in excess deaths over 2020 to 2023 was associated with increases in deaths from circulatory diseases and diabetes.”
Study: trends and disparities in alcohol-associated liver disease (ALD) mortality in the US from 1999 to 2022: Findings:
“In this cross-sectional study of 436 814 ALD-related deaths, age-adjusted mortality rates doubled from 6.71 to 12.53 deaths per 100 000 from 1999 to 2022, with significant acceleration during 2018 to 2022 (annual percentage change, 8.94%), showing disproportionate increases among women, young adults aged 25 to 44 years, and American Indian and Alaska Native populations….These findings highlight the urgent need for targeted public health interventions and enhanced surveillance, especially given the sustained impact of COVID-19 pandemic–related changes in alcohol consumption patterns.”
Zillow research: natural disaster risks for home owners: “As natural disasters are becoming more frequent and severe, not all U.S. o face equal exposure to the risks. A new Zillow analysis reveals that Black and Hispanic homeowners are disproportionately vulnerable to major climate risks like wildfire, wind, and extreme heat.
While white homeowners own the most U.S. homes and therefore also own the most homes at major climate risk…there are disparities when looking at the proportion of homes at climate risk across different racial groups. Hispanic homeowners, for example, are more likely to own homes at high risk of wildfire. Black homeowners are more likely to face major risk of extreme wind.
The disproportionate burden of climate risk on minority homeowners has the potential to exacerbate financial inequality between racial groups. Climate risk is increasing the cost of homeownership, with rising insurance and energy costs needed to heat and cool homes, coupled with the potential costs of repairs and rebuilding after climate-related natural disasters. Zillow research has also shown that homes at greater climate risk are more likely to face slower sales and bigger discounts. These impacts have the potential to widen the racial wealth gap and further set back minority groups that historically have been financially disadvantaged.”
World Happiness Report: country comparisons: The 11th annual World Happiness Report, published June 9 to coincide with the International Day of Happiness, surveyed over 100,000 people (approx.. 1000/country): Findings:
- Finland was the happiest country for the sixth straight year.
- The U.S. hit an all-time low ranking dropping eight spots to 23rd— the first year the U.S. didn’t rank among the world’s 20 happiest countries since the report launched 12 years ago.
- Americans are dining alone at record rates: Sharing meals helps encourage conversation and foster community, which is closely linked to happiness. 1 in 4 Americans (26%) in 2023 said they ate all of their meals alone the previous day — a 53% increase from 2003.
“The Nordic countries continue to rank among the happiest in the world, with Finland, Denmark, Iceland and Sweden claiming the top four slots in the latest report. According to Gallup’s findings, three Western nations — the U.S., Canada and Switzerland — were “among the fifteen largest losers” in the happiness rankings. This year, for the first time, none of the large industrial powers ranked in the top 20,” the report stated.”
Axios Finish Line: The world’s happiest countries
Economist Report: global democracy: “Democratisation suffered more reversals in 2021, with the percentage of people living in a democracy falling to well below 50% and authoritarian regimes gaining ground. This year’s report finds that democracy experienced its biggest annual decline since 2010, when the global financial crash led to major setbacks. The index score fell for all but one region, with pandemic-related restrictions continuing to constrain individual freedoms.” (The index ranks countries on a scale of 1-10, based on 60 indicators grouped into five categories: electoral process and pluralism, functioning of government, political participation, political culture and civil liberties). Highlights:
The average global score in the Economist Intelligence Unit’s 2021 Democracy Index fell from 5.37 to 5.28 — the largest annual drop since 2010, after the global financial crisis.
120 countries, or 71.8%, registered a decline or stagnation in their average score in 2021.
Ongoing political polarization during Biden’s first year in office contributed to a democratic decline in the U.S., branded a “flawed democracy” that saw its score drop from 7.92 to 7.85.
Global democracy rating hits new low
CDC report: violent, suicide deaths: The Centers for Disease Control and Prevention yesterday released its National Violent Death Reporting System report on violent deaths in 2022, finding that approximately 61% (44,917) of people died by suicide and about 30% (22,395) died by homicide. About 7% (5,292) died by an undetermined intent, 1% (1,014) by legal intervention, and less than 1% (530) by an unintentional firearm injury. About 57% of all violent deaths involved a firearm.
The suicide rate was higher for males than for females, at 23.7 versus 6.1 per 100,000 population, respectively. Adults older than 85 had the highest suicide rate at 22.4 per 100,000 population. The report found that the homicide rate was also higher for males than for females, at 12 versus 2.9 per 100,000 population, respectively. In terms of age groups, the homicide rate was highest for people aged 20–24 years old
Study: Exercise vs. chemotherapy: Results of the first randomized controlled trial of exercise as a treatment for recurrent high-risk cancer were presented at the American Society of Clinical Oncology’s (ASCO) annual meeting in Chicago on June 1…
The 17-year trial included over 880 patients from around the globe, each recovering from high-risk stage 2 or stage 3 colon cancer after treatment. Half of the participants were given general advice about exercise and how it can improve cancer survival. The other half were given a structured, three-year exercise prescription to follow, with the goal of preventing recurrence or a new cancer diagnosis.
In the trial, exercise outperformed what adjuvant (or, secondary) chemotherapy can do to boost a patient’s long-term survival, after surgery and primary treatment is over. Adjuvant cancer treatment is the kind designed to kill any extra cancer cells left behind, and prevent cancer from coming back. In the study, patients who followed an exercise regimen reduced their risk of death by 37%, and reduced their risk of cancer recurrence and new cancer development by 28%.
Exercise Can Prevent Recurrent Colon Cancer: Study – Business Insider
Report: malnutrition in older adults: “In older adults, malnutrition has been shown to carry serious adverse consequences, including physical and cognitive disability, increased complications and poorer outcomes of disease, increased length of inpatient stay, poor quality of life, and increased costs.
Malnutrition is common among older adults, with the risk increasing with age. However, epidemiologic data depend strongly on the care setting, country, and diagnostic criteria used. Traditionally, in the absence of a global consensus on the definition and diagnosis of malnutrition, a screening tool that was developed to identify at-risk older adults — the Mini Nutritional Assessment has been widely used to assess older adults for malnutrition. Assessments with this tool indicate that the prevalence of malnutrition is approximately 3% among community-dwelling older adults, 22% among hospital inpatients, and nearly 30% in older adults in nursing home, long-term care, or rehabilitation and post–acute care settings. The prevalence of malnutrition in low-resource community settings can be as high as 18%.”
Malnutrition in Older Adults | New England Journal of Medicine
