Medical prices are rising at their slowest pace in a half century, a shift in the health-care industry that could provide relief to government and businesses' budgets while also signaling consumers are being left with a larger share of the bill.

The prices paid for medical care in July rose just 1% from a year earlier, the slowest annual rate of growth since the early 1960s, according to Commerce Department data. Health-care increases now trail overall inflation, which itself has been historically slow in recent years.

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