Health care prices in October 2013 rose 0.9% above October 2012, the lowest reading in the fifty-plus years for which we have data. Prices for physician services rose by a mere 0.2% while prescription drug prices rose by 0.5%. Hospital prices rose by 1.2%, the lowest rate since November 1998, held down by very low Medicare payment rate increases.
National health expenditures in October 2013 grew 4.1% over October 2012. While trending up since July, expenditure growth remains near the low rate (3.9%) that we have been observing for nearly five years, and the growth rate for the first 10 months of 2013 continues to hover near a record low of 3.8%. The health spending share of gross domestic product (GDP) was 17.4% in September, roughly where it has been since the end of the recession in 2009. (“Benchmark” revisions to government GDP data released on July 31 shifted this share down from the 18% that had been previously reported.)
Health care added 28,400 jobs in November 2013, above the 24-month average of 22,800. September and October figures were revised up by a net of 14,400 jobs; earlier estimates had shown a rare decline in health jobs in September, but this has been revised to a gain of 8,400.
Nearly all of the growth in November was in ambulatory care settings, which added an above-average 26,300 jobs. Hospital growth remained low, at 1,200 jobs. The health share of total employment, at 10.72%, was just below the all-time high of 10.73% last seen in August.
These data come from the monthly Health Sector Economic IndicatorsSM (HSEI) briefs released by Altarum Institute’s Center for Sustainable Health Spending (www.altarum.org/HealthIndicators).
“October is the sixth consecutive month where health care prices have grown more slowly than prices economy-wide,” said Charles Roehrig, director of the Center. “Medicare hospital payment policies are playing a key role here, along with popular brand name prescription drugs coming off patent. Low price growth is helping to restrain the growth in health spending, but I expect some acceleration in the near future as the effects of the previous recession have likely played out and expanded coverage under the Affordable Care Act kicks in.”