this article presents statistics on health care utilization , prices , expenses , employment , and work hours as well as on national economic activity . some of these statistics are based on sample surveys conducted monthly or quarterly by government agencies or private organizations , and are available 1 to 3 months after the completion of the period . they provide the first glimpse at changes occurring within the general economy and the health care sector . the accompanying tables report selected quarterly statistics for 1989 through the third quarter of 1992 and the calendar year aggregation of quarterly information in the past 3 years . , this calculation permits analysis of quarterly data to focus on the direction and magnitude of changes , without interference introduced by seasonal fluctuations . in the national health accounts , indicators such as these play an important role in the estimation of the latest historical year of health care expenditures . information that is more comprehensive tends to lag behind the close of a calendar year by 9 to 12 months or more . therefore , we rely extensively on indicators such as these to anticipate and predict changes in health care sector expenditures for the most recent year . other indicators help to identify specific reasons ( e.g. , increases in price inflation or declines in utilization ) for expenditure change . in the following sections , we will identify important indicators of health care and national economic activity and their sources . we then describe what these indicators tell us about general economic and health sector activity during the most recent quarter . since 1963 , the american hospital association , in cooperation with member hospitals , has collected data on the operation of community hospitals through its national hospital panel survey . community hospitals , which comprised over 80 percent of all hospital facilities in the united states in 1990 , include all non - federal , short - term general , and other special hospitals open to the public . they exclude hospital units of institutions ; psychiatric facilities ; tuberculosis , other respiratory , and chronic disease hospitals ; institutions for the mentally retarded ; and alcohol and chemical dependency hospitals . the sample is designed to produce estimates of community hospital indicators by bed - size and region ( american hospital association , 1963 - 90 ) . in tables 1 and 2 , statistics covering expenses , utilization , beds , and personnel depict trends in the operation of community hospitals annually from 1989 through 1991 and for selected quarters from 1989 through 1992 . for purposes of national health expenditures ( nhe ) , survey statistics on revenues ( not shown on table 1 ) are analyzed in estimating the growth in the largest component of health care costs  community hospital expenditures . this one segment of nhe accounted for 33 percent of all health spending in 1991 ( letsch et al . , 1992 ) . the survey also identifies important factors influencing expenditure growth patterns , such as changes in the number of beds in operation , number of admissions , length of stay , use of outpatient facilities , and number of surgeries . the u.s . bureau of labor statistics ( bls ) collects monthly information on employment for all workers , and earnings and work hours for non - supervisory workers in a sample of 350,000 establishments . data are collected through cooperative agreements with state agencies that also use this information to create state and local area statistics . the survey is designed to collect industry - specific information on wage and salary jobs in non - agricultural industries . it excludes statistics on self - employed persons and on those employed in the military ( u.s . department of labor , 1991 ) . approximately 5 percent of the population hold more than one job at any point in time . ( other surveys that are household - based , such as the current population survey [ cps ] , also record employment . in the cps , however , each person 's employment status is counted only once , as either employed , unemployed , or not in the labor force . ) once each year , monthly establishment - based employment statistics are adjusted to benchmarks created from annual establishment census information , resulting in revisions to previously published employment estimates . tables 3 and 4 present statistics on employment , average hourly earnings , and average weekly hours in private ( non - government ) health service establishments . similar statistics for the all - private non - agricultural sector , included on these tables , provide a basis for comparing the economy as a whole with the health sector in employment , earnings , and work hours . table 5 summarizes business activity in the health sector and the overall economy by measuring change in the implied non - supervisory work hours and payroll . implied work hours are the product of the number of non - supervisory employees and average weekly hours . implied non - supervisory payrolls are calculated by multiplying implied work hours by average hourly earnings . for purposes of nhe , changes in work hours by industry combined with changes in prices ( discussed in a later section ) can be used to gauge the direction and magnitude of expenditure change in specific industries . we use these composite indicators in the estimation of growth in physician and dental expenditures for the most recent period . we study the historical relationship of changes in this indicator to changes in expenditures and estimate this relationship for the most recent period . bls publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services . tables 6 and 7 present information on the consumer price index for all urban consumers ( cpi - u ) that measures changes in prices faced by 80 percent of the non - institutionalized population in the united states . ( the more restrictive wage earner cpi gauges prices faced by wage earners and clerical workers . these workers account for 32 percent of the non - institutionalized population [ u.s . the index reflects changes in prices charged for the same quality and quantity of goods or services purchased in the base period . for most items , the base period of 1982 - 84 is used to define the share of consumer expenditures purchasing specific services and products . those shares or weights remain constant in all years , even though consumption patterns of the household may change over time . cpis for health care goods and services depict price changes for out - of - pocket expenditures made by consumers directly . the composite cpi for medical care weights together product- or service - specific cpis in proportion to household out - of - pocket expenditures for these items . for example , the composite medical care cpi measures inflation for the 3 percent of hospital expenditures that are made out - of - pocket by consumers ; the remaining 97 percent of the costs of hospital care paid by private health insurers , medicare , medicaid , and other payers are not weighted into the cpi for medical care . in addition , some medical care sector indexes measure changes in list or charged prices , rather than the prices actually received by providers after discounts are deducted . in several health care areas , received or transaction prices are difficult to capture , although bls is making advances in this area . in the nhe , a combination of cpis for selected medical care items , input price indexes for nursing homes , and the bls cpi for hospital and related services adjusted by hcfa to provide transaction price changes are used as measures of inflation for the health industry . the indexes are used to develop a personal health care fixed - weight price index to depict price changes affecting the entire health care industry more accurately than does the overall cpi medical care index ( letsch , 1993 ) in 1979 , the health care financing administration ( hcfa ) developed the hospital input price index to measure the pure price changes associated with expenditure changes for hospital services . in the early 1980s , the skilled nursing facility ( snf ) and home health agency ( hha ) input price indexes , often referred to as  market baskets ,  were developed to price a consistent set of goods and services over time . they have played an important role in helping to set payment percent increases and to understand the contribution of input price increases to growing health expenditures . the input price indexes , or market baskets , are laspeyres or fixed - weight indexes that are constructed in two steps . for example , for the prospective payment system ( pps ) hospital input price index , the base period is 1987 . cost categories , such as food , fuel , and labor , are identified and their 1987 expenditure amounts determined . the proportion or share of total expenditures included in specific spending categories the purpose of the price proxy is to measure the rate of price increase of the goods or services in that expenditure category . the price proxy index for each spending category is multiplied by the expenditure weight for the category . the sum of these products ( weights multiplied by the price index ) over all cost categories yields the composite input price index for any given time period , usually a fiscal year or a calendar year . the percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider . the input price indexes are estimated on a historical basis and forecasted out several years . the hcfa - chosen price proxies are forecasted under contract with data resources , inc./mcgraw hill ( dri ) . following every calendar year quarter , in march , june , september , and december , dri updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions . some of the data in tables 8 through 13 are forecasted and are expected to change as more recent historical data become available and subsequent quarterly forecasts are received . the methodology and price proxy definitions used in the input price indexes are described in the federal register notices that accompany the revisions of the pps , hha , and snf cost limits . a description of the current pps input price index was published september 4 , 1990 ( federal register ) . the latest hha regulatory input price index was published july 1,1992 ( federal register ) , and the latest snf input price index was published october 7 , 1992 ( federal register ) . periodically , the input price indexes are revised to a new base year so that cost weights will reflect changes in the mix of goods and services that are purchased . each revision allows for new base weights , a new base year , and changes to certain price variables used for price proxies . each input price index is presented in two tables : the first is a percent - change table , and the second provides the actual index numbers from which the percentages were computed . bls publishes monthly information on changes in prices paid by consumers for a fixed market basket of goods and services . tables 6 and 7 present information on the consumer price index for all urban consumers ( cpi - u ) that measures changes in prices faced by 80 percent of the non - institutionalized population in the united states . ( the more restrictive wage earner cpi gauges prices faced by wage earners and clerical workers . these workers account for 32 percent of the non - institutionalized population [ u.s . the index reflects changes in prices charged for the same quality and quantity of goods or services purchased in the base period . for most items , the base period of 1982 - 84 is used to define the share of consumer expenditures purchasing specific services and products . those shares or weights remain constant in all years , even though consumption patterns of the household may change over time . cpis for health care goods and services depict price changes for out - of - pocket expenditures made by consumers directly . the composite cpi for medical care weights together product- or service - specific cpis in proportion to household out - of - pocket expenditures for these items . for example , the composite medical care cpi measures inflation for the 3 percent of hospital expenditures that are made out - of - pocket by consumers ; the remaining 97 percent of the costs of hospital care paid by private health insurers , medicare , medicaid , and other payers are not weighted into the cpi for medical care . in addition , some medical care sector indexes measure changes in list or charged prices , rather than the prices actually received by providers after discounts are deducted . in several health care areas , received or transaction prices are difficult to capture , although bls is making advances in this area . in the nhe , a combination of cpis for selected medical care items , input price indexes for nursing homes , and the bls cpi for hospital and related services adjusted by hcfa to provide transaction price changes are used as measures of inflation for the health industry . the indexes are used to develop a personal health care fixed - weight price index to depict price changes affecting the entire health care industry more accurately than does the overall cpi medical care index ( letsch , 1993 ) in 1979 , the health care financing administration ( hcfa ) developed the hospital input price index to measure the pure price changes associated with expenditure changes for hospital services . in the early 1980s , the skilled nursing facility ( snf ) and home health agency ( hha ) input price indexes , often referred to as  market baskets ,  were developed to price a consistent set of goods and services over time . they have played an important role in helping to set payment percent increases and to understand the contribution of input price increases to growing health expenditures . the input price indexes , or market baskets , are laspeyres or fixed - weight indexes that are constructed in two steps . for example , for the prospective payment system ( pps ) hospital input price index , the base period is 1987 . cost categories , such as food , fuel , and labor , are identified and their 1987 expenditure amounts determined . the proportion or share of total expenditures included in specific spending categories the purpose of the price proxy is to measure the rate of price increase of the goods or services in that expenditure category . the price proxy index for each spending category is multiplied by the expenditure weight for the category . the sum of these products ( weights multiplied by the price index ) over all cost categories yields the composite input price index for any given time period , usually a fiscal year or a calendar year . the percent change in the input price index is an estimate of price change over time for a fixed quantity of goods and services purchased by a provider . the input price indexes are estimated on a historical basis and forecasted out several years . the hcfa - chosen price proxies are forecasted under contract with data resources , inc./mcgraw hill ( dri ) . following every calendar year quarter , in march , june , september , and december , dri updates its macroeconomic forecasts of wages and prices based on updated historical information and revised forecast assumptions . some of the data in tables 8 through 13 are forecasted and are expected to change as more recent historical data become available and subsequent quarterly forecasts are received . the methodology and price proxy definitions used in the input price indexes are described in the federal register notices that accompany the revisions of the pps , hha , and snf cost limits . a description of the current pps input price index was published september 4 , 1990 ( federal register ) . the latest hha regulatory input price index was published july 1,1992 ( federal register ) , and the latest snf input price index was published october 7 , 1992 ( federal register ) . periodically , the input price indexes are revised to a new base year so that cost weights will reflect changes in the mix of goods and services that are purchased . each revision allows for new base weights , a new base year , and changes to certain price variables used for price proxies . each input price index is presented in two tables : the first is a percent - change table , and the second provides the actual index numbers from which the percentages were computed . national economic indicators provide a context for understanding health - specific indicators and how change in the health sector relates to change in the economy as a whole . economy as the value of output produced within the geographic boundaries of the united states by u.s . or foreign citizens or companies . real  gdp removes the effects of prices from the valuation of goods and services produced , so that the growth of real gdp reflects changes in the  physical  output of the economy ( u.s . department of commerce , 1992 ) . total expenses in community hospitals grew to $ 65.8 billion in the third quarter of 1992 , to a level 9.3 percent higher than the same quarter 1 year earlier . based on the aggregate growth experience in expenses during the first three quarters of 1992 , growth in expenses for calendar year 1993 should be similar to the 9.9 percent growth in expenses recorded in 1991 . growth in measures of inpatient utilization continued to decline in the third quarter of 1992 from the same period 1 year earlier : admissions fell 0.9 percent and inpatient days fell 2.1 percent . the decline in days relative to admissions resulted in a 0.1 day reduction in the average length of stay to 6.3 days per admission from the third quarter of 1991 to the third quarter of 1992 . offsetting inpatient utilization declines were increases in outpatient visits , up 6.4 percent . growth in outpatient visits in the first three quarters of 1992 appear much stronger than growth exhibited in the first three quarters of 1991 ( figure 1 ) . in the third quarter , the average occupancy rate for community hospitals reached a new low : only 60.3 percent of staffed hospital beds were occupied ( figure 2 ) . the number of community hospital beds in the united states has continuously declined since the first quarter of 1984 when the transition to medicare prospective payment system was under way . in the past four quarters , the rate of decline in the number of beds has decelerated despite a continuing steady drop in the number of inpatient days . beginning in the fourth quarter of 1990 , private non - agricultural employment suffered six consecutive quarters of loss when compared with the same period 1 year earlier . in the second and third quarters of 1992 , however , employment decline ceased ( figure 3 ) . in the third quarter of 1992 , employment leveled off at 90.7 million jobs . in the health services sector , the number of jobs , while still growing , is doing so at a decelerating rate . in the third quarter , health service employment increased 3.3 percent from the same quarter in 1990 to 8.5 million jobs , slower than the 3.7 percent rate one quarter earlier . the health sector jobs account for approximately 9.4 percent of all private non - agricultural employment . the gap in growth between non - supervisory payroll for all private non - agricultural establishments and for private health establishments has narrowed in the past two quarters . in the first three quarters of 1991 ( the height of the recession ) , growth in private non - agricultural payroll was negligible ( 0.2 to 0.4 percent ) when compared with the same period 1 year earlier . for private health establishments , payroll growth remained strong , ranging from 9.6 to 10.6 percent . by the third quarter of 1991 , growth in private non - agricultural establishment payroll had risen to 2.7 percent , while payroll growth for health care establishments fell to 7.6 percent ( figure 4 ) . most of the decline in the health industry comes from slower increases in non - supervisory employment and in average hourly earnings for non - supervisory employees , rather than from a slowdown in average weekly hours worked ( figure 5 ) . overall prices measured by the consumer price index rose 3.1 percent in the third quarter of 1992 , the fourth consecutive quarter of relatively mild inflation . for medical care , cost inflation remained high at 7.2 percent in the third quarter of 1992 . however , medical care inflation grew more slowly in this quarter , down from 7.7 percent in the second quarter ( figure 6 ) . inflation in medical services , which accounts for a large proportion of overall medical care inflation , grew 7.5 percent in the third quarter , down from 7.7 percent in the second quarter . inflation for medical commodities experienced a more dramatic deceleration : growth of 5.7 percent in the third quarter of 1992 , down from 7.1 percent in the second quarter ( figure 7 ) . most of that deceleration is attributable to slower price growth in prescription drugs , for which the rate of inflation fell from 8.5 to 6.5 percent between the second and third quarters . in the third quarter of 1992 , real growth in gross domestic product creeped upward at a rate of 2.2 percent from the same quarter in 1991 . the slow economic recovery from the recession of 1991 has not yet been felt in job growth , which had remained unchanged from the same period 1 year earlier . the unemployment rate increased slightly to 7.6 percent , the highest quarterly level since 1983 ( figure 8) . despite sluggish recovery in the rest of the economy , growth in the health sector that had remained strong through the recession is slowing . health sector employment is growing 1 percentage point slower in the third quarter than it did the previous year . in addition , medical price inflation is decelerating , although it remains significantly higher than all item price increases . total expenses in community hospitals grew to $ 65.8 billion in the third quarter of 1992 , to a level 9.3 percent higher than the same quarter 1 year earlier . based on the aggregate growth experience in expenses during the first three quarters of 1992 , growth in expenses for calendar year 1993 should be similar to the 9.9 percent growth in expenses recorded in 1991 . growth in measures of inpatient utilization continued to decline in the third quarter of 1992 from the same period 1 year earlier : admissions fell 0.9 percent and inpatient days fell 2.1 percent . the decline in days relative to admissions resulted in a 0.1 day reduction in the average length of stay to 6.3 days per admission from the third quarter of 1991 to the third quarter of 1992 . offsetting inpatient utilization declines were increases in outpatient visits , up 6.4 percent . growth in outpatient visits in the first three quarters of 1992 appear much stronger than growth exhibited in the first three quarters of 1991 ( figure 1 ) . in the third quarter , the average occupancy rate for community hospitals reached a new low : only 60.3 percent of staffed hospital beds were occupied ( figure 2 ) . the number of community hospital beds in the united states has continuously declined since the first quarter of 1984 when the transition to medicare prospective payment system was under way . in the past four quarters , the rate of decline in the number of beds has decelerated despite a continuing steady drop in the number of inpatient days . beginning in the fourth quarter of 1990 , private non - agricultural employment suffered six consecutive quarters of loss when compared with the same period 1 year earlier . in the second and third quarters of 1992 , however , employment decline ceased ( figure 3 ) . in the third quarter of 1992 , employment leveled off at 90.7 million jobs . in the health services sector , the number of jobs , while still growing , is doing so at a decelerating rate . in the third quarter , health service employment increased 3.3 percent from the same quarter in 1990 to 8.5 million jobs , slower than the 3.7 percent rate one quarter earlier . the health sector jobs account for approximately 9.4 percent of all private non - agricultural employment . the gap in growth between non - supervisory payroll for all private non - agricultural establishments and for private health establishments has narrowed in the past two quarters . in the first three quarters of 1991 ( the height of the recession ) , growth in private non - agricultural payroll was negligible ( 0.2 to 0.4 percent ) when compared with the same period 1 year earlier . for private health establishments , payroll growth remained strong , ranging from 9.6 to 10.6 percent . by the third quarter of 1991 , growth in private non - agricultural establishment payroll had risen to 2.7 percent , while payroll growth for health care establishments fell to 7.6 percent ( figure 4 ) . most of the decline in the health industry comes from slower increases in non - supervisory employment and in average hourly earnings for non - supervisory employees , rather than from a slowdown in average weekly hours worked ( figure 5 ) . overall prices measured by the consumer price index rose 3.1 percent in the third quarter of 1992 , the fourth consecutive quarter of relatively mild inflation . for medical care , however , medical care inflation grew more slowly in this quarter , down from 7.7 percent in the second quarter ( figure 6 ) . inflation in medical services , which accounts for a large proportion of overall medical care inflation , grew 7.5 percent in the third quarter , down from 7.7 percent in the second quarter . inflation for medical commodities experienced a more dramatic deceleration : growth of 5.7 percent in the third quarter of 1992 , down from 7.1 percent in the second quarter ( figure 7 ) . most of that deceleration is attributable to slower price growth in prescription drugs , for which the rate of inflation fell from 8.5 to 6.5 percent between the second and third quarters . in the third quarter of 1992 , real growth in gross domestic product creeped upward at a rate of 2.2 percent from the same quarter in 1991 . the slow economic recovery from the recession of 1991 has not yet been felt in job growth , which had remained unchanged from the same period 1 year earlier . the unemployment rate increased slightly to 7.6 percent , the highest quarterly level since 1983 ( figure 8) . despite sluggish recovery in the rest of the economy , growth in the health sector that had remained strong through the recession health sector employment is growing 1 percentage point slower in the third quarter than it did the previous year . in addition , medical price inflation is decelerating , although it remains significantly higher than all item price increases .
this regular feature of the journal includes a discussion of each of the following four topics community hospital statistics ; employment , hours , and earnings in the private health sector ; health care prices ; and national economic indicators . 
 these statistics are valuable in their own right for understanding the relationship between the health care sector and the overall economy . in addition 
 , they allow us to anticipate the direction and magnitude of health care cost changes prior to the availability of more comprehensive data .