Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / Why Your Raise Is Finally Beating the Cost of a Doctor Visit
Transcript
- Lucas: So here's something that surprised me when I looked at the numbers this week: the cost of an average primary care visit has actually fallen relative to wages. Not in nominal dollars — the price tag is still around a hundred and fifty dollars — but in terms of how many hours you have to work to cover it. Luna: Wait, really? Because my anecdotal experience is that every time I go to the doctor, my copay went up by ten bucks. Lucas: That's the insurance layer. And we'll get to that. But let's start with the raw price of the service itself. According to the latest CPI data for June 2026, medical care services actually declined month over month. The overall CPI dropped to 332.6 from 334, and medical care specifically was a big part of that. Meanwhile, average hourly earnings for private-sector workers rose to $37.60. Luna: So a $150 visit now represents about four hours of work at that wage. What was it two years ago? Lucas: Two years ago, mid-2024, average hourly earnings were around $35. So that same $150 visit cost about four point three hours. You've saved about eighteen minutes of labor per visit. It's not a huge shift, but it's moving in the right direction for the first time in years. Luna: What's driving the price slowdown? Is it just general disinflation, or is something specific happening in healthcare? Lucas: A few things. One is that hospital pricing power has moderated. After the pandemic, there was a wave of consolidation — hospitals buying up physician practices — which usually lets them charge more. But that wave seems to have peaked. Also, Medicare reimbursement rates have been essentially flat, and that tends to drag down what private insurers pay. Luna: Right, because private insurers often peg their rates to a multiple of Medicare. If Medicare doesn't go up, the anchor holds. Lucas: Exactly. And then there's the shift toward high-deductible health plans. More than half of workers with employer-sponsored insurance now have a deductible of at least $1,500 for single coverage. When patients pay more out-of-pocket, they shop around more, and that puts downward pressure on prices. Luna: But that's a double-edged sword. Lower prices are great, but higher deductibles mean people delay care. There's a health cost there. Lucas: Absolutely. And I don't want to paint this as some unalloyed win. The fact that wages are finally catching up to healthcare costs is real, but it's happening in part because the burden is being shifted onto patients through plan design. The Employment Cost Index for wages rose to 177.5 in the first quarter of 2026, up from 176.2. That's a 0.7 percent quarterly gain. But a lot of that goes straight into higher premiums and deductibles. Luna: So the headline 'your raise is beating the doctor visit' is true, but the fine print is that your raise is also paying for a bigger share of that visit upfront. Lucas: Right. And there's another interesting wrinkle: the Affordable Care Act marketplace. Because of something called 'silver loading,' insurers added the cost of cost-sharing reductions onto silver plans. That actually made bronze and gold plans relatively cheaper. So for people buying their own insurance, the effective price of a doctor visit has come down more than for those with employer plans. Luna: Let's talk about the broader context. The latest CPI print showed core inflation at 3.5 percent annually, which is down from 4 percent last year. Wages are growing around 4 percent. So on average, workers are gaining a little ground. But healthcare is a huge category, and it's been a laggard in that improvement. Lucas: Yes. And one of the reasons healthcare inflation has been stubborn is labor costs. Healthcare employs a lot of people, and wages for nurses and techs have risen sharply. But that's a cost that gets passed through. So the fact that doctor visit prices are actually decelerating suggests that productivity gains or changes in utilization are offsetting those labor cost increases. Luna: I want to get specific about that $150 figure. Is that the average cash price for a primary care visit, or is that the allowed amount from an insurer? Lucas: It's the average allowed amount across all payers — including Medicare, Medicaid, and private insurance. Cash prices can be lower if you negotiate, but most people never see that number. They see their copay, which might be $30 or $40 for a PCP visit, or they see the full allowed amount if they haven't met their deductible. Luna: And that allowed amount has been growing at about 2 percent annually for the last few years, which is actually below general inflation. So the real price of a doctor visit is falling. Lucas: That's the key insight. Nominal prices are still rising, but more slowly than everything else, and much more slowly than wages. So in real terms, your purchasing power for primary care is improving. And that's a real shift from the 2010s, when healthcare costs were growing 4 to 5 percent a year. Luna: Let's look at that wage data a bit more. Median usual weekly earnings hit $1,204 in early 2025. That's up from $1,159 a year earlier. So the typical worker is bringing home about $45 more per week. Over a year, that's over $2,300. If you have two doctor visits a year, the price difference is maybe $20 total. So the wage gain swamps the cost increase. Lucas: Absolutely. And that's the story we've been telling all season — your raise is finally beating specific costs. But it's worth noting that not all healthcare is behaving the same. Prescription drug prices are still rising faster than wages. Emergency room visits are up. But primary care, the front door of the system, is actually getting more affordable in relative terms. Luna: And even within primary care, there's variation. A new patient visit might cost more than an established patient visit. And if you need blood work or imaging, that's separate. So the $150 is a baseline. Lucas: Right. But the broader point stands: for the average worker, the share of their paycheck going to a routine checkup is shrinking. And that's a rare piece of good news in the affordability landscape. Luna: Speaking of the broader show and the value of understanding these shifts — if you found this breakdown useful, you know, the way we keep this ad-free is through listener support. If you'd like to help keep these episodes coming, you can buy us a coffee at buy me a coffee dot com slash fexingo. Lucas: Yeah, it really does make a difference. Every contribution goes straight into keeping the podcast independent and accessible. And we're grateful for every one. Luna: So back to the doctor visit — I think one more thing worth touching on is the geographic variation. A $150 visit in New York City is a very different story than in rural Mississippi. Lucas: Great point. The national average masks huge differences. In the South, primary care visits can be as low as $80 to $100 allowed amount. In the Northeast, it's often $200 or more. But wages also vary regionally. So the ratio of hours worked to visit cost might actually be worse in high-cost areas, even though nominal prices are higher there. Luna: And that's why we always say 'your mileage may vary.' The national trend is positive, but your personal experience depends on your employer, your plan, and where you live. Lucas: Exactly. And I think the takeaway here is not that healthcare is fixed — far from it — but that there is a real, measurable improvement in one specific corner of the system. And that's worth acknowledging, even as we keep pushing for broader reforms. Luna: Alright, next episode we're going to tackle something a lot of listeners have been asking about: the cost of child care. And whether your raise is finally beating that. Lucas: Spoiler: it's complicated. But we'll have the numbers. Thanks for listening, and we'll see you next time.