January 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 January 2024 briefs.

Health spending has remained below 17.5% of GDP for nearly 2 years

• In November 2023, national health spending grew by 5.9%, year over year, and represents 17.4% of GDP.
• Nominal GDP in November 2023 was 5.0% higher than in November 2022, and grew 0.9 percentage points slower than health spending.
• Personal health care spending growth in November was 7.3%, year over year, and continues to be dominated by growth in utilization rather than increases in prices.
• Year-over-year spending on home health care grew fastest in November at 12.9%, followed by prescription drug spending (12.2%), while spending on dental services and hospital care increased the least, at 5.8% and 5.9%, respectively, among major categories.

Slow health care employment growth in December capped off a historic year of job creation in 2023 

• In December, the health care sector added just 37,700 jobs, less than half of the 78,300 jobs added in November.
• Although health care employment growth slowed in December, the year 2023 saw historic growth in the sector, with 654,000 jobs added, accounting for almost a quarter of all jobs economywide. 
• December’s health care job growth was led by growth in ambulatory care settings, which added 19,200 jobs, and hospitals, which added 15,300 jobs. 
• Nursing and residential care facilities added 3,200 jobs in December. Within this industry, nursing homes added 4,700 jobs while other nursing and residential care settings lost 1,500 jobs in December.
• The economy overall added 216,000 jobs in December, slightly below the 12-month average of 224,750. 
• The unemployment rate was stable at 3.7%.
• Health care wage growth in November 2023 was 2.9% year over year, compared to 4.0% for the total private sector.
• Wage growth in health care settings was highest in nursing and residential care, at 4.0% year over year, followed by hospitals at 3.3% and ambulatory care settings at 2.4%. 

Health care price growth remained steady in December  

• The overall Health Care Price Index (HCPI) increased by 2.9% year over year in December, falling slightly from the revised growth rate of 3.0% a month prior. 
• Economywide inflation stabilized in December, with year-over-year growth in the Consumer Price Index (CPI) moving to 3.4% and growth in the Producer Price Index (PPI) increasing slightly to 1.0%. 
• Among the major health care categories, prices for dental care (5.0%), home health care (4.2%), and nursing home care (4.0%) grew the fastest, while physician and clinical services (0.3%) price growth was the slowest.
• Our implicit measure of health care utilization growth fell slightly to 4.4% year over year in November, mostly due to a slight decline in overall spending growth during the second half of 2023.
• The fastest utilization growth among health care categories occurred in home health care (8.6%), prescription drugs (8.5%) and physician services (7.8%), while dental services (1.4%) and hospital care (2.9%) utilization growth were the slowest.