January 2023 Health Sector Economic Indicators Briefs

January 26, 2023

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 January 2023 briefs.

New CMS data confirm slowdown in national health spending growth in 2021

  • New data from CMS indicate that national health spending in the US grew by 2.7% in 2021—a significant slowdown from 2020 because of a decline in pandemic-related federal government support.
  • In November 2022, national health spending grew by just 1.5%, year over year, as the reduction in federal government support continues.
  • Nominal GDP in November 2022 was 7.9% higher than in November 2021 as GDP growth continues to outpace health spending growth.

Health care prices increase moderately as utilization growth turns negative

  • The Health Care Price Index increased by 2.8% year over year in December, down slightly from 2.9% in November. Year-over-year HCPI growth averaged 2.9% over the final six months of 2022, an increase from the first half of the year, when price growth averaged 2.2%.
  • Economywide inflation slowed again this month, as overall CPI inflation fell from 7.1% to 6.5% and PPI price growth fell to 6.2%. However, economywide services (less healthcare) growth continues to increase, up to 8.0% growth last month, an increase from 7.6% in November. 
  • Among the major health care categories, prices for dental care (6.4%), nursing home care (4.5%), and hospital services (3.2%) were the fastest growing, while physician services (0.3%) and prescription drug (1.8%) price growth were the slowest growing major categories.
  • After incorporating new spending data, our implicit measure of healthcare year-over-year utilization growth turned negative in November (-0.4%), pulled downward by hospital care utilization growth (-1.4%) and physician and clinical services growth (-1.1%).

Health care adds 584,000 jobs in 2022, mostly in ambulatory care settings

  • Health care closed the year adding 54,700 jobs in December, consistent with the 2022 average of 49,000 new jobs per month. This compares to an average of 9,000 new health jobs per month added in 2021.
  • In December, and for 2022 overall, more than half of the job growth was in ambulatory care settings, which added 29,900 jobs last month. Other major settings of care also showed solid job growth in December, with hospitals adding 15,700 jobs and nursing and residential care adding 9,100 jobs.
  • Health care added a total of 584,000 jobs in calendar year 2022: 331,000 in ambulatory care settings, 153,000 in hospitals, and 100,000 in nursing and residential care settings.
  • The economy added 223,000 jobs in December, similar to the previous four months. The economy added an average of 375,000 jobs per month in 2022 for a total of 4.5 million jobs added during the year. The unemployment rate dropped to 3.5%, equal to the pre-pandemic low.
  • Health care wage growth continues to moderate. After peaking at a rate of 7.4% year over year in June, health care wages grew by 5.2% in November 2022, moving closer to economy-wide wage growth of 4.8%. Wage growth fell to 6.6% in nursing and residential care compared to a peak of 11.0% in March 2022, while hospital wage growth fell to 5.5% and ambulatory care wage growth was up slightly to 4.6%, both well down from recent peaks of 8.5% and 5.8%, respectively.


Corey Rhyan
Research Director, Health Economics and Policy
George Miller
Fellow and Research Team Leader