CSHS Health Sector Economic Indicators Briefs

Altarum’s Health Sector Economic IndicatorsSM briefs are designed to address significant shortcomings in the availability of timely economic data on the health sector, including employment, spending, and prices. Published monthly, the reports are a product of Altarum's Center for Sustainable Health Spending.

September 2014 Health Sector Economic IndicatorsSM Briefs

Health spending in July 2014 grew 4.3% over July 2013, bringing the year-to-date increase to 4.4%. This is well above the 3.6% growth rate estimated for 2013 by the Centers for Medicare and Medicaid Services and, with further acceleration expected in the final two quarters, puts 2014 on track to be the first year since 2008 in which growth has exceeded 4%.  Health care gained a strong 34,000 jobs in August, and revisions to June and July showed a net increase of 15,500 jobs. And health care prices in August 2014 were 1.7% higher than in August 2013, similar to the rates reported for April through June, but roughly half a percentage point higher than for the first quarter of 2014.  

 

August 2014 Health Sector Economic IndicatorsSM Briefs

Health care gained a modest 7,000 jobs in July, bringing the 2014 year-to-date monthly average down to 18,000, very close to the monthly average for all of 2013. Health care prices in June 2014 were 1.7% higher than in June 2013, but similar to the rates reported for April and May, and 0.6% higher than for the first quarter of 2014. Health spending in June 2014 grew 4.8% over June 2013, a significant increase over the 4.2% growth estimated for calendar year 2013. 

 

July 2014 Health Sector Economic IndicatorsSM Briefs (Price and Labor Only)

Health care prices in May 2014 were 1.8% higher than in May 2013, well above the 12-month moving average of 1.3%. Hospital prices grew 2.1% while prescription drug prices rose 3.6%.  Physician and clinical services prices, which exhibited near-zero growth in the first quarter of 2014, grew by 0.6%. Health care gained 21,000 jobs in June 2014. Over the first half of 2014, the health sector grew by over 20,000 jobs per month, about 20 percent higher than in the first half of 2013. 

 

June 2014 Health Sector Economic IndicatorsSM Briefs (Spending Only)

In May 2014, health spending increased to a seasonally adjusted annual rate (SAAR) of $3.02 trillion, from its value of $3.01 trillion in April. April’s health spending accounted for 17.5% of GDP – equal to its March value (May GDP data are not yet available). As a share of PGDP, April’s spending was at 16.7% – again equal to the March value. Year over year, health spending in May grew by 4.8% – higher than its April value of 4.6% .

 

June 2014 Health Sector Economic IndicatorsSM Briefs (Price and Labor Only)

Health care prices in April 2014 were 1.6% higher than in April 2013, well above the March rate of 1.1%. Year over year, hospital prices – a key price index driver – grew 2.1% in April, above the March rate of 1.3%. Physician and clinical services prices grew 0.6%; and home health care prices rebounded from a year-long negative growth trend, recording a 0.4% rate in April. Prescription drug prices rose 2.4% and are growing at an annual rate of 7% over the past quarter. Health care gained 34,000 jobs in May 2014, over twice the average of 16,000 seen across the first four months of 2014.

 

May 2014 Health Sector Economic IndicatorsSM Briefs

National health spending (NHS) in March 2014 grew 7.1% over March 2013, the highest 12-month rate since February 2005, well before the recession, which began in December 2007. The health spending share of GDP reached an all-time high of 17.9% in March, just above its February value of 17.8%.

 

April 2014 Health Sector Economic IndicatorsSM Briefs

National Health Expenditures (NHE) in February 2014 grew 6.7% over February 2013, the highest rate since March 2007, just prior to the recession, which officially began in December 2007. While governmental data attribute a portion of the growth in January and February 2014 to newly insured individuals under the Affordable Care Act, much of the acceleration in growth occurred during 2013, prior to ACA’s expanded coverage. Growth during the first quarter of 2013 was less than 4% but, by the fourth quarter, it had risen to 5.3%. The health spending share of GDP reached an all-time high of 17.7% in January, the most recent month for which GDP data are available.

 

March 2014 Health Sector Economic IndicatorsSM Briefs

The growth in health care jobs remained low in February 2014, with a gain of only 9,500 jobs, the third straight month of meager growth, resulting in the lowest three-month gain (17,700) on record.  Hospitals, the largest health sector employer, shed 10,000 jobs over this three-month period. Meanwhile, health spending growth has been trending upward, moving above 4% in the latter half of 2013 and, then, with the initial influx of newly insured, to 5.4% in January 2014 (relative to January 2013). 

 

February 2014 Health Sector Economic IndicatorsSM Briefs (Labor and Spending)

Health care lost 400 jobs in January 2014, and revised data for December 2013 showed a scant gain of 2,400 jobs. This two-month increase of 2,000 jobs is the lowest since our data series began in 1989, and the 3-month moving average gain of 10,500 jobs has not been lower in more than a decade.

 

January 2014 Health Sector Economic IndicatorsSM Briefs

National health expenditures for the first 11 months of 2013 were 4.0% above the same period in 2012. While trending up since April – preliminary spending data for November 2013 showed year over year growth of 4.5% – expenditure growth remains near the revised all-time low rate of 3.6% for 2011. Depending on the December data, 2013 could be the fifth consecutive year of health spending growth below 4%, a rate that had not been seen before in the 50-plus years of national health expenditure accounting.

 

December 2013 Health Sector Economic IndicatorsSM Briefs

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. 

 

November 2013 Health Sector Economic IndicatorsSM Briefs

A net 15,000 health care jobs were created in October 2013, significantly below the two-year average of 21,000 jobs per month. For the first 10 months of 2013 we saw an average of 17,000 new health care jobs, compared with 26,000 over the same period in 2012. Due to moderately strong total employment growth of 204,000 in October, the health sector share fell to 10.71% – below the record high of 10.73% recorded in December 2012. 

 

October 2013 Health Sector Economic IndicatorsSM Briefs (Labor)

Health care added only 6,800 jobs in September 2013, about a third of the 24-month average of 21,800. July and August figures were, however, revised up by a net 3,000 jobs.

 

October 2013 Health Sector Economic IndicatorsSM Briefs (Price and Spending)

National health care prices in August 2013 were 1.0% higher than in August 2012, down one-tenth from the July 2013 level and equal to the May 2013 rate, which was the all-time low in our series that extends back to January 1990. The 12-month moving aver­age, at 1.5%, is a new low for our data. Hospital price growth fell to 1.5%, its lowest rate since 1.3% in December 1998, while physician prices grew a scant 0.3%. Hospital price growth plays a dominant role in the total index via its spending weight, and its low August reading was complemented by a decline in home health prices (-0.2%) and durable medical equipment (-0.1%), plus moderate growth otherwise.

 

September 2013 Health Sector Economic IndicatorsSM Briefs (Labor and Spending)

After the decade-low employment growth initially reported in July, health care rebounded in August 2013 to rise by 33,000 jobs, well above the 24-month average of 23,000 jobs. June and July figures were also revised up by a net 14,000 jobs, so that July growth was about half the average pace (11,000), versus its initially reported dramatic low. Ambulatory jobs were up by 27,000, the highest increase in over two years, while hospital jobs remained flat. The health sector share of total employment rose to 10.73 percent in August, matching its all-time high rate last seen in April 2013.

 

August 2013 Health Sector Economic IndicatorsSM Briefs (Price and Spending)

Health care prices grew 1.1 percent in July 2013 relative to July 2012, only a tenth above the May rate, which was the lowest in our data series extending back to January 1990.  The 12-month moving average, at 1.6 percent, represents a new low for our data.  National health expenditures grew 4.3 percent in June, and spending growth is averaging 4.1 percent for the first half of 2013, barely above the record low levels seen annually since 2009. 

 

August 2013 Health Sector Economic IndicatorsSM Briefs (Labor)

Health care employment rose by only 2,500 jobs in July 2013, well below the 24-month average of 22,000, and the lowest increase since July 2003.  Hospitals lost 4,400 jobs in July, and downward revisions wiped out most of June’s gains.  Over the past three months, hospitals have lost 13,000 jobs. Ambulatory care employment continues to rise (up by 6,600), but this is well below the 24-month average of 15,600, and nursing and residential care job growth is essentially flat.

 

July 2013 Health Sector Economic IndicatorsSM Briefs

Health care prices grew 1.0 percent in May 2013 relative to May 2012, the lowest rate in our data series, which extends back to January 1990. The 12-month moving average, at 1.7 percent, is the lowest since the same reading was recorded in September 1998.  National health expenditures, which combines prices and utilization, grew 4.2 percent in May, and revised data for the first quarter of 2013 put spending growth at 3.8 percent, below the record low levels seen annually since 2009. Meanwhile, health care employment saw 20,000 new jobs in June 2013, moderately below the 24-month average of 23,000. Health sector job growth in the first 6 months of 2013 averaged 19,000 per month, compared with 25,000 per month during the same period in 2012, with much of the slowdown seen in hospitals.  Total nonfarm jobs in June rose by a sizeable 195,000 which put the health sector share of total employment at 10.72 percent, off the revised all-time high of 10.73 percent first seen in December 2012.

 

June 2013 Health Sector Economic IndicatorsSM Briefs

National health care prices grew 1.1 percent in April 2013 relative to April 2012, the lowest reading since November 1997 and a whopping five-tenth drop from the March rise.  The 12-month moving average, at 1.8 percent, is the lowest since 1.7 percent recorded in September 1998.  National health expenditures, which reflect both prices and utilization, grew 4.2 percent, remaining in the vicinity of the record low levels seen annually since 2009. Meanwhile, health care employment extended its recent moderation with 11,000 new jobs in May 2013, about half the 24-month average of 23,000. Health sector job growth in the first 5 months of 2013 averaged 18,000 per month, compared to 28,000 per month during the same period in 2012, with most of the slowdown seen in hospitals.  With total nonfarm jobs in May growing by a solid 175,000 jobs, the health sector share of total employment dropped slightly to 10.72%, off the revised all-time high of 10.73% seen in April 2013.

 

May 2013 Health Sector Economic IndicatorsSM Briefs

National health care spending in March 2013 grew 3.8 percent relative to March 2012, one-tenth below the February rate, putting it below the record low levels seen annually in 2009 – 2011, and below our estimate of 4.3 percent for 2012. Meanwhile, health care employment may finally be slowing with an average gain of 19,000 jobs per month for 2013, compared with 27,000 per month during 2012.  Health care prices in March 2013 were 1.6 percent higher than in March 2012, one-tenth below the February rise, and second lowest reading since December 1997’s 1.3 percent figure. The 12-month moving average at 1.9 percent is the lowest rate since a 1.8 percent reading recorded in October 1998.

 

April 2013 Health Sector Economic IndicatorsSM Briefs

National health care spending in February 2013 grew 3.9 percent relative to February 2012, a falling rate that returns it to the record low levels seen annually in 2009 – 2011, and below our estimate of 4.3 percent for 2012. Meanwhile, despite the recent pattern of historically low spending growth, the health sector now accounts for nearly 1 in 9 total U.S. jobs, a new all-time high at 10.74 percent. While health care price growth rose to 1.7 percent in February 2013 compared to February 2012, two-tenths above the January 2013 reading, this was still the second lowest rate since 1.3 percent growth recorded in December 1997. The 12-month moving average price growth at 1.9 percent in February 2013 is the lowest since the same figure recorded in November 1998. Health care employment rose by 23,000 jobs in March 2013, barely below the 24-month average of 24,000, but economy-wide employment rose by a disappointing 88,000, well below forecasts of approximately 200,000.

 

March 2013 Health Sector Economic IndicatorsSM Briefs

Health care prices in January 2013 were 1.5% higher than in January 2012, two-tenths lower than the December rise, and the lowest reading since a 1.3% rate in December 1997.  The 12-month moving average at 2.0% is the lowest since a 1.9% figure recorded in November 1998. National health expenditures (NHE) in January 2013 grew at an annual rate of 4.1% relative to January 2012, the same rate as for December, and a level that would signify the fifth consecutive year of moderate spending growth. We estimate that NHE grew at an estimated annual rate of 4.3% in 2012, a bit higher than the 3.9% experienced for each of the years 2009-2011. Health care employment rose by 32,000 jobs in February 2013, surpassing the 24-month average of 24,000, but January was revised down to 13,000 from its originally reported figure of 23,000.

 

February 2013 Health Sector Economic IndicatorsSM Briefs

National health expenditures grew at an estimated annual rate of 4.3% in 2012, a bit higher than the 3.9% experienced for each of the years 2009-2011. While this estimate is subject to revisions, it portends a fourth consecutive year of record-low growth compared to all previous years in the 50-plus years of official health spending data. Health care prices in December 2012 rose by 1.7% compared to December 2011, the lowest year-over-year growth since February 1998. The 12-month moving average at 2.0% was the lowest reading since December 1998. Health care employment rose by a 23,000 jobs in January 2013, similar to the 24-month average of 24,000. So-called benchmark revisions reduced total 2011-2012 health jobs by 70,000 while boosting overall jobs by 598,000.

 

January 2013 Health Sector Economic IndicatorsSM Briefs (Spending and Prices)

Over the first 11 months of 2012, national health expenditures (NHE) grew at an annual rate of 4.3%, compared to the 3.9% increase for 2011 reflected in data released last week by the Centers for Medicare & Medicaid Services (CMS). CMS also shows a 3.9% growth rate for 2009 and 2010 – the first time in the 50-plus years of official health spending data that growth was below 4%. So far, 2012 is shaping up as the fourth straight year of historically low growth. NHE in November 2012 grew by 4.1% relative to November 2011. Health care prices in November 2012 were 2% higher than in November 2011, with a 12-month moving average at 2.1% that is fractionally above its 14-year low.

 

January 2013 Health Sector Economic IndicatorsSM Briefs (Labor)

Health sector employment closes the year with a bang. Health care employment rose by 45,000 jobs in December 2012, the second highest increase in over a decade, and well above the 24-month average of 26,000. All health care settings grew at above average levels: ambulatory services (+23,000 versus a 24-month average of 16,000), hospitals (+12,000 versus average 7,000), and nursing and residential care (+10,000 versus average 3,000). Total nonfarm jobs in December grew by 155,000, near the average of 153,000 seen in both 2011 and 2012. October and November were revised upward by 14,000 jobs. These figures were based on the establishment survey. The companion household survey showed no change in the unemployment rate of 7.8% (revised from 7.7% to 7.8% for November), and no change to the labor force participation rate. The combination of an average level of overall job growth and very strong health sector growth in December drove the health sector share of total employment to another high of 10.84%.

RELATED CONTENT

Subject Matter Experts

Areas of Expertise