ANN ARBOR, MI— The Quarterly Services Survey (QSS), released on December 10, showed 5.4% growth in spending on health care services in the third quarter of 2014 (July – September) compared with the same quarter in 2013. This is substantially higher than the 3.7% rate reported for the second quarter and the 3.9% rate experienced for all of 2013. For October 2014, total health spending, of which services is the largest component, grew an estimated 4.5% over October 2013. This figure does not reflect the new QSS findings and will likely be revised upward.
The acceleration in health sector employment continued, with 28,900 new jobs in November 2014, plus upward revisions totaling 5,000 for the two previous months. From April through November 2014, health care averaged 27,000 new jobs per month, compared with 17,500 for the previous 12 months. The health share of total employment remained at 10.62%, down from the high of 10.66% last seen in December 2012. For over a year, non-health jobs have been growing slightly faster than health jobs.
Health care prices in October 2014 were 1.5% higher than in October 2013, two-tenths below the September year-over-year reading. The October 2014 12-month moving average rose to a still quite low rate of 1.5%. Year-over-year hospital prices grew 1.1% in October, the lowest reading since September 1998. Prescription drug prices rose 4.1%, up from 3.8% in September 2014.
These data come from the monthly Health Sector Economic IndicatorsSM briefs released by Altarum’s Center for Sustainable Health Spending (www.altarum.org/HealthIndicators).
“The third quarter acceleration in healthcare services spending reported in the QSS is in line with expectations, but with a delay,” said Charles Roehrig, director of the Center. “While it is too early for definitive conclusions, this may well represent the predicted ramping up in spending by the estimated 10 million individuals gaining coverage in early 2014 under the Affordable Care Act. Please note that our spending estimates will not reflect these QSS findings until next month.”
Please see a new blog by Center for Sustainable Health Spending deputy director, Ani Turner that explores the relationship between states expanding Medicaid and accelerating health care jobs.