August 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 August 2024 briefs.

National health spending continues to accelerate

• In June 2024, national health spending was 7.7% higher than in June 2023 and represented 17.8% of GDP.
• Nominal GDP in June 2024 was 5.6% higher than in June 2023, growing 2.1 percentage points more slowly than health spending.
• Personal health care spending growth in June was 8.1%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was highest by far for home health care, at 20.9%, year over year. Spending growth on each of the other major categories was at or below 10%, with spending on physician and clinical services growing the slowest, at 6.6%.

Health care prices continue to rise faster than economywide inflation

• The overall Health Care Price Index (HCPI) increased by 2.9% year over year in July, down 0.4 percentage points from a month prior.
• Economywide inflation fell, with year-over-year growth in the overall Consumer Price Index (CPI) decreasing slightly to 2.9% and growth in the Producer Price Index (PPI) dropping to 2.2%. 
• Among the major health care categories, prices for dental care (5.0%) and nursing home care (4.6%) were the fastest growing, while physician and clinical price growth was the slowest (1.4%).
• For major payers, year-over-year Medicaid price growth (5.5%) exceeded services price growth for private insurance (3.0%) and Medicare (1.7%) patients.
• The implicit measure of health care utilization growth was 4.8% year over year in June, equal to the May value.
• Home health care utilization was, by far, the fastest growing component, increasing 18.5% year over year.  This category was followed by prescription drugs (5.9%), nursing care (5.2%), hospital care (4.9%), and physician services (4.9%), while dental services trailed the other categories at 2.0%.

Health care jobs accounted for nearly half of all jobs added across the economy in July

• Health care industry employment increased by 55,000 in July 2024, compared to 59,000 jobs in non-health care industries, meaning that health care job growth accounted for 48.2% of all growth.
• July’s health care job growth was led by growth in ambulatory health care services, which added 26,300 jobs, followed by hospitals, with 19,500 jobs. 
• Nursing and residential care facilities added 9,200 jobs in July, including 6,800 jobs in nursing care facilities and 2,400 jobs in other residential care facilities. 
• The unemployment rate increased from 4.1% in June 2024 to 4.3% in July. 
• In health care and social assistance in June, the job openings rate was 6.7%, the hiring rate was 3.4%, and the total separations rate was 3.0%. 
• Nominal health care wage growth in June 2024 was 3.6% year over year, with growth rates of 4.6% in nursing and residential care facilities, 3.8% in ambulatory health care services, and 3.0% in hospitals.