Healthcare represents both the largest employment sector in America and a substantial share of consumer spending, making it a critical focus of our inflation research. Our analysis examines how healthcare price trends affect overall inflation measurements while also exploring how healthcare costs influence labor markets through employer-sponsored insurance expenses. By identifying specific drivers of healthcare inflation, we develop targeted policy proposals that can address these pressures without sacrificing healthcare employment. This sector-specific approach exemplifies our broader strategy of addressing inflation through precision interventions rather than broad economic slowdowns.
Healthcare

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Now is the time for the Biden administration to think hard about how to encourage greater efficiency for the already elevated set of healthcare costs that the government and the private sector finance in this country.
Healthcare policy interventions could provide downward pressure on core PCE both in 2022 and in the years ahead. Given the salience of inflation, disinflationary healthcare policies should be a key priority for Congress and the Biden Administration alike.