1、U.S.Research Report|Healthcare Services:Q2 2022|1Inflation Compounds Healthcare Cost ConcernsCost containment has long been a core issue for the U.S.healthcare industry.Consumer Price Inflation(CPI)has ramped up to a four-decade high.When combined with reimbursement concerns,healthcare providers abi

2、lity to drive down costs and sustain profit margins is increasingly challenged.Rising CPI is also impacting the medical office sector.On the supply side,rapidly rising material costs and labor shortages are causing delivery delays and extended fit-out periods for new properties.In addition,the Feds

3、aggressive stance on raising interest rates to curb inflation,coupled with higher bond yields,is causing investors to reconsider their real estate strategies.In this report,we address the dual impact of high inflation on the healthcare industry and medical real estate and provide insights about the

4、future.Economic Context The rate of inflation in the U.S.is at a 40-year high.Junes CPI the principal measure used by the Bureau of Labor Statistics(BLS)reached a 9.1%annualized rate,up from 7%at year-end 2021 and 5%one year earlier in May 2021.The June number is the highest since November 1981.The

5、ramp up in prices began in April 2021,following 10 years where annualized CPI typically ran in the 1%to 2.5%range.The highest reading recorded during this period was 2.9%in June 2018.What is driving the rapid increase in CPI to such elevated levels?It is a confluence of factors including strong cons

6、umer demand,a tight labor market,companies retaining pricing power,elevated gasoline prices and supply-chain stress Key Findings CPI is at a four-decade high and set to remain elevated for another 12 to 18 months.Rising out-of-pocket costs are making healthcare less affordable.The disconnect between