December 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 December 2024 briefs.

CMS’ updates to National Health Expenditure Accounts for 2023 are reflected in this month’s spending brief

• The Centers for Medicare and Medicaid Services (CMS) released the official estimates of national health spending for 2023 on December 18, indicating that health spending grew by 7.5% in 2023. We have incorporated these estimates into this spending brief.
• In October 2024, national health spending grew by 7.6%, year over year, and represents 18.1% of GDP.
• Nominal GDP in October 2024 was 5.1% higher than in October 2023, growing 2.5 percentage points more slowly than health spending.
• Personal health care spending growth in October was 7.8%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories continued to be highest for home health care, at 11.1%, year over year. Spending growth for hospital care grew the slowest, at 6.8%.

Economy-wide inflation overtakes health care price increases

• The overall Health Care Price Index (HCPI) increased by 2.6% year over year in November, down 0.1 percentage points from last month’s revised value.
• Economy-wide inflation rose, with year-over-year growth in the overall Consumer Price Index (CPI) increasing by 0.1% to 2.7% and growth in the Producer Price Index (PPI) increasing 0.4% to 3.0%.  This is the first time both indices have surpassed the health care price index since February 2023.
• Among the major health care categories, prices for dental care (3.9%), and hospitals (3.1%) were the fastest growing, while prescription drugs was the slowest (0.7%).
• For major payers, year-over-year Medicaid price growth (5.2%) exceeded services price growth for private insurance (3.4%) and Medicare patients (1.3%), continuing a trend beginning in June of 2022.
• The implicit measure of health care utilization growth was 5.1% year over year in October, down from the revised September value of 5.7%.
• Home health care utilization increased 9.6% year over year.  While this was the fastest-growing category this month (as it has been since August of 2023), it is now sitting below its 3-, 6-, and 12-month moving averages. This category was followed by physician and clinical services (7.1%), nursing care (5.9%), dental services (5.9%), and prescription drugs (also 5.9%), while hospital care and trailed the other categories at 3.6%.

Health care jobs continue steady climb while employment in other industries has been fluctuating over previous year

• In November 2024, health care industry employment increased by 53,600 jobs while non-health care industries increased by 173,400 jobs. 
• By major subsector, November’s health care job growth was led by ambulatory health care services, which added 22,400 jobs, followed by hospitals, which added 19,300 jobs. Nursing and residential facilities added 11,900 jobs.
• The hiring rate was 3.5% and the total separations rate was 3.2% in October 2024. The job openings rate was 5.5%.
• The unemployment rate was 4.2% in November 2024, up 0.1% from the previous month. 
• Nominal health care wage growth in October 2024 was 3.5% year over year, with growth rates of 3.6% in ambulatory health care services, 3.5% in nursing and residential care facilities, and 3.7% in hospitals.