February 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 February 2024 briefs.

National health spending grew by 6.2% in 2023

• Initial data for all of 2023 suggest that national health spending grew by 6.2% for the year, while GDP grew by 6.3%. Personal health care grew by 7.7%.
• In December 2023, national health spending grew by 6.0% since December 2022, and represents 17.2% of GDP.
• Nominal GDP in December 2023 was 6.6% higher than in December 2022, and grew 0.6 percentage points faster than health spending.
• Personal health care spending growth in December was 7.2%, year over year, and continues to be dominated by growth in utilization rather than increases in prices.
• Year-over-year spending on prescription drugs and home health care grew fastest in December, at 12.8% and 12.7%, respectively. Spending on hospital care increased the least among major categories, at 5.5%.

The job openings rate in the health care and social assistance sector fell in 2023 but remains extremely high 

• In 2023, the job openings rate in health care and social assistance was 7.6%, marking the second-highest rate since data collection began in 2001.
• Health care employment increased by 70,300 in January, above the 12-month average of 58,700.
• January’s health care job growth was led by growth in ambulatory care settings, which added 33,400 jobs, and hospitals, which added 20,400 jobs. 
• Nursing and residential care facilities added 16,500 jobs in January. Within this industry, nursing homes added 9,000 jobs while other nursing and residential care settings added 7,500 jobs in January.
• The economy overall added 353,000 jobs in January, well above the 12-month average of 243,920. 
• The unemployment rate was stable at 3.7%.
• Health care wage growth in December 2023 was 2.9% year over year, compared to 4.5% in non-health care industries.
• Wage growth in health care settings was highest in nursing and residential care, at 4.0% year over year, followed by ambulatory care settings at 2.9% and hospitals at 2.4%. 

Health care services price growth increases in the first month 2024  

• The overall Health Care Price Index (HCPI) increased by 2.8% year over year in January, falling slightly from the revised growth rate of 3.0% a month prior. 
• Among the major health care categories, prices for nursing home care (4.9%) and dental care (4.8%) were the fastest growing, while prescription drug price growth was the slowest last month (0.4%).
• Prices for physician services increased 1.3% in January, slower than overall health care inflation, but is the fastest rate seen for this component since January 2022.
• Economywide inflation remained stable and moderate in January, with year-over-year growth in the Consumer Price Index (CPI) falling slightly to 3.1% and growth in the Producer Price Index (PPI) falling slightly to 0.9%. 
• Our implicit measure of health care utilization growth fell slightly to 4.3% year over year in December, but continued to drive spending increases as it remained above overall health care price growth.ion growth were the slowest.