The Consumer Price Index – what is it, and is there one for healthcare?
The Consumer Price Index (CPI) is a measure that shows the weighted average of prices for a basket of consumer goods and services. It’s calculated monthly by the Office for National Statistics and shows how much prices have risen since the same date the previous year.
The UK Government first began to monitor the price of food during World War I to protect workers. Over the years, the process, and what is tracked has continually evolved – this year ‘loungewear bottoms’ were added, reflecting the demand for comfier working attire for the many working from home during the pandemic. You know who you are…
The CPI in its current form was first introduced in 2003 when it started being used alongside the Retail Price Index (RPI), which itself was introduced in 1947. Today, the price of hundreds of products and services across 12 categories are tracked including food, alcohol, clothing, household equipment, health, transport, recreation, hospitality and more.
What is it used for?
The CPI is a measure of inflation and is used by the Government to decide a whole range of matters, from how much pensions should rise, to the price of train fares. It also signals what’s going on in the economy.
What’s the current picture?
The cost of living in the UK is rising. Recent figures show prices rose by an average of 3.1% in the last 12 months and The Bank of England is predicting it could go above 4% by the end of the year. The sharp rises have been driven by the pandemic, as the Government unwinds the support it has given businesses. It’s also being driven by the global demand for oil and gas, shortages in materials and electronics, and labour shortages across transportation, food processing, and hospitality.
Is there a price index for health?
There is no UK-wide, independent, impartial view of product price movement across the NHS, but there is no reason why there shouldn’t be. After all, like consumers, hospitals purchase a range of consistent but evolving items to ensure they can run safely and as smoothly as possible. What’s more, given that NHS budgets have been squeezed for as long as we can remember, and with procurement teams constantly under pressure to reduce price, wouldn’t it be great if you could see how the cost of an ‘average basket of goods’ for an NHS trust had changed over time, compare it to current procurement budgets and forecast movement and impact? It could be closer than you think.
Swing by Stand 26 at the HCSA Conference, 24 – 25 November 2021, to find out more and hear about our partnership with HCSA to deliver the AdviseInc Index. Or follow us on Twitter or LinkedIn for our latest updates.
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