April 2024 Health Sector Economic Indicators Briefs

Altarum's monthly Health Sector Economic Indicators (HSEI) briefs analyze the most recent data available on health sector spending, prices, employment, and utilization. Support for this work is provided by a grant from the Robert Wood Johnson Foundation. Below are highlights from the April 2024 briefs.

Health spending growth moderates slightly in February

• In February 2024, national health spending was 6.2% higher than in February 2023 and represented 17.2% of GDP.
• Nominal GDP in February 2024 is estimated to have been 7.1% higher than in February 2023, growing 0.8 percentage points faster than health spending.
• Personal health care spending growth in February was 7.0%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was fairly consistent, with all categories showing growth between 7.2% and 8.0% except dental services, which grew by 5.0%, year over year.

The gap in employment growth between health care and other industries is growing 

• Monthly health care employment growth has outpaced all other industries for two consecutive years (starting in April 2022). Over that period, the health care sector grew by 8.2%, versus 3.8% for all other industries. 
• Health care employment increased by 72,300 in March 2024, well above the 12-month average of 62,400. 
• March’s health care job growth was led by growth in ambulatory health care services, which added 27,500 jobs, and hospitals, which added 27,100 jobs. 
• Nursing and residential care facilities added 17,700 jobs in March. Within this industry, nursing care facilities added 9,500 jobs while other nursing and residential care facilities added 8,200 jobs. 
• The economy overall added 303,000 jobs in March, surpassing the 12-month average of 243,900, and the unemployment rate decreased slightly to 3.8% in March. 
• Nominal health care wage growth in February 2024 was 3.4% year over year, compared to 4.4% in non-health care industries.
• Nominal wage growth in health care settings was highest in nursing and residential care facilities, at 4.5% year over year, followed by ambulatory health care services at 3.2% and hospitals at 3.0%.

Hospital price growth outpaces broader health care inflation so far in 2024

• The overall Health Care Price Index (HCPI) increased by 3.1% year over year in March, decreasing slightly from the revised growth rate of 3.2% a month prior.
• Economywide inflation ticked up slightly, with year-over-year growth in the overall Consumer Price Index (CPI) increasing to 3.5% and growth in the Producer Price Index (PPI) increasing to 2.1%. 
• Among the major health care categories, prices for dental care (4.1%), nursing home care (4.0%), and hospital care (3.6%) were the fastest growing, while prescription drug price growth was the slowest in March (0.4%).
• An alternative measure of hospital price growth, the CPI index for hospital and related services continued to rise in March, up a much greater 7.7% year over year.
• Our implicit measure of health care utilization growth fell slightly to 3.8% year over year in February, but continued to drive spending increases as it remained above overall health care price growth.
• Prescription drugs (7.8%) and physician and clinical services (5.6%) were the fastest growing utilization categories, while dental care (0.0%) was the slowest, with flat growth.