September 9, 2016

ANN ARBOR, MI—Health care added 14,000 jobs in August, the lowest level of growth since April 2014 when the acceleration in hiring, fueled by expanded coverage, began. Year-over-year health job growth peaked in March 2016 (3.4% rate) and fell below 3.0% in August for the first time in more than a year. While too soon to declare a slowdown, August growth was well below the 40,000 jobs per month added over the past two years, and the decline in growth was seen in all health care settings. The health share of total employment remained at the all-time high of 10.78%.

Although national health spending in July 2016 was 4.9% higher than in July 2015, this represents a continuing gradual downward trend over the past six months, declining from 5.6% (year over year) in February. Growth in spending on prescription drugs dropped below 4% for the first time in three years. Quarterly Services Survey (QSS) data, released yesterday, and not incorporated in these spending estimates, showed 6.9% growth in health care services in the second quarter of 2016, suggesting that there will likely be upward revisions in forthcoming reports.

Health care prices in July 2016 were 1.7% higher than in July 2015. While only a 0.1 increase from June, the index is at its highest rate since September 2014. Reflecting this upward trend, the 12-month moving average rose by 0.1 to 1.3%, its highest rate since July 2015. Thus, after hitting its December 2015 all-time low of 0.9%, the index may be ready to rise to a more normal—though problematic factor for health cost control—2% rate. Drug price growth surged to 5.2%, well above the 3.9% growth in drug spending, suggesting a decline in drug utilization.

These data come from the monthly Health Sector Economic IndicatorsSM briefs released by Altarum’s Center for Sustainable Health Spending (

“Monthly health job growth averaged 40,900 for the past 16 months through July, and was never less than 30,000,” said Charles Roehrig, founding director of the Center. “Thus, the August figure of 14,000 is a dramatic decline and increases our anticipation for next month’s jobs data to see if slower growth is confirmed. The new QSS data are certain to increase our spending estimates for the second quarter of 2016. See our September Trend Report, to be released later this month, for a first look.”

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Sarah Litton
Manager, Communications and Public Affairs


Altarum is a nonprofit organization that creates and implements solutions to advance health among vulnerable and publicly-insured populations.