January 2025 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 2025 briefs.

Spending growth for home health care significantly exceeds overall growth in personal health care spending for past 18 months 

• In November 2024, national health spending grew by 7.2%, year over year. October’s growth of 7.6% represented 18.1% of October GDP. (November GDP is not available.) 
• Personal health care spending growth in November was 7.4%, 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 10.1%, year over year, while spending growth for prescription drugs grew the slowest, at 5.5%. Growth in home health care spending since June 2023 (24.8%) has greatly exceeded growth in spending for other categories of personal health care spending.  

Economy-wide inflation extends recent lead over health care price increases 

• In December, the overall Health Care Price Index (HCPI) held steady at the 2.7% revised November year-over-year value. 
• Economy-wide inflation rose, with year-over-year growth in the overall Consumer Price Index (CPI) increasing by 0.2% to 2.9% and growth in the Producer Price Index (PPI) increasing 0.3% to 3.3%.  This extends the recent overtaking of general inflation over the HCPI seen last month.  
• Among the major health care categories, prices for hospitals (3.3%) and dental care (3.0%) were the fastest-growing, while prescription drugs was the slowest (1.1%). 
• For major payers, year-over-year Medicaid price growth (5.3%) 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 4.7% year over year in November, down from the revised October value of 5.1%. 
• Home health care utilization increased 8.5% year over year.  While this was the fastest-growing category this month (as it has been since August of 2023) it has been steadily declining in recent months since peaking at nearly 17% in May.  This category was followed by physician and clinical services (6.4%), nursing care (6.0%), dental services (5.3%), and prescription drugs (4.8%), while hospital care and trailed the other categories at 3.9%. 

Health care job growth continues steady climb while employment in other industries has been fluctuating over previous year 

• In December 2024, health care industry employment increased by 46,100 jobs while non-health care industries increased by 209,900 jobs.  
• By major subsector, December’s health care job growth was led by ambulatory health care services, which added 20,600 jobs, followed by nursing and residential facilities, which added 14,000 jobs.  Hospitals added 11,500 jobs. 
• The hiring rate was 3.3% and the jobs opening rate was 6.2% in November.  The total separations rate was 2.8%. 
• The unemployment rate was 4.1% in December, down 0.1% from the previous month.  
• Nominal health care wage growth in November 2024 was 4.0% year over year, with growth rates of 3.6% in ambulatory health care services, 4.0% in nursing and residential care facilities, and 4.4% in hospitals.