July 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 July 2024 briefs.

National health spending shows signs of acceleration

• In May 2024, national health spending was 7.7% higher than in May 2023 and represented 17.8% of GDP.
• Nominal GDP in May 2024 was 5.7% higher than in May 2023, growing 2.0 percentage points more slowly than health spending.
• Personal health care spending growth in May was 8.3%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was highest by far for home health care, at 22.6%, year over year. Spending growth on each of the other major categories was below 10%, with spending on physician and clinical services growing the slowest, at 6.6%.

Health care prices continue to rise faster than economywide inflation

• The overall Health Care Price Index (HCPI) increased by 3.3% year over year in June, matching the slightly revised growth rate from a month prior.
• Economywide inflation data were mixed, with year-over-year growth in the overall Consumer Price Index (CPI) falling slightly to 3.0%, but growth in the Producer Price Index (PPI) increasing to 2.6%. 
• Among the major health care categories, prices for dental care (5.3%), nursing home care (4.6%), and hospital care (3.5%) were the fastest growing, while physician and clinical price growth was the slowest (1.7%).
• For major payers, year-over-year Medicaid price growth (6.4%) exceeded services price growth for private insurance (3.9%) and Medicare (1.7%) patients.
• The implicit measure of health care utilization growth was 5.0% year over year in May, matching the growth rate for utilization from April.
• Home health care utilization was, by far, the fastest growing component, increasing 20.1% year over year, followed by prescription drugs utilization (5.6%), and hospital care (5.5%).

Small gains in nursing and residential care facilities and job losses in home health care led to below-average growth in health care in June 

• Health care industry employment grew by 48,600 in June 2024, well below the average of 63,100 in the past 12 months. 
• June’s health care job growth was led by growth in ambulatory health care services, which added 22,000 jobs, followed closely by hospitals, with 21,700 jobs. 
• While many ambulatory care services settings had positive job growth in June, home health care services lost 3,500 jobs, a departure from the monthly average of 10,800 jobs gained in the past year.
• Nursing and residential care facilities added just 4,900 jobs in June, less than half the average of 11,700 in the past year.
• The economy overall added 206,000 jobs in June, slightly below the 12-month average of 262,100, and the unemployment rate increased slightly to 4.1%.
• In health care and social assistance in May, the hiring rate was 3.6%, the total separations rate was 3.2%, and the job openings rate was 6.8%.
• Nominal health care wage growth in May 2024 was 3.5% year over year, with 4.5% growth in nursing and residential care facilities, 3.8% growth in ambulatory health care services, and 2.8% growth in hospitals.