ANN ARBOR, MI—Health care added 30,500 jobs in October, a bit less than the 12-month average of 34,600 jobs. By several metrics, health job growth peaked in mid-2015 and has been slowing gradually through 2016. Health jobs grew 2.7% year over year, down slightly from rates above 3% seen in mid-2015 through mid-2016, but higher than non-health jobs at 1.5%, putting the health share of total employment at its all-time high of 10.8%.
At a $3.41 trillion rate, national health spending in September 2016 was 5.4% higher than in September 2015, exhibiting a decline since May 2016 when the growth rate was 5.9%. The health spending share of GDP was 18.2% in September 2016, falling just below the all-time high of 18.3% seen in June 2016. Spending in September 2016, year over year, increased in all major categories. Hospital care grew the fastest, at 6.6%. Prescription drugs grew at a 4.5% rate, the slowest among the major categories, despite accelerating prices.
In September 2016, our Health Care Price Index (HCPI) rose 2.1% above the September 2015 level. This is the fastest rate since August 2012, mainly due to prescription drugs whose price growth of 7.0% is the highest since 1992. Despite the upward trending HCPI, hospital prices at 1.2% and physician prices at 0.2% show continued muted growth. The HCPI has been rising more quickly than economy-wide prices, a normal outcome in a historical context.
These data come from the monthly Health Sector Economic IndicatorsSM briefs released by Altarum Institute’s Center for Sustainable Health Spending (http://www.altarum.org/healthindicators).
“It is remarkable to see such slow growth in prescription drug spending in the face of such rapid prescription drug price inflation,” said Charles Roehrig, founding director of the Center. “As a result, prescription drugs have recently exerted downward pressure on overall health spending growth while simultaneously driving overall health price inflation up.”