June 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 June 2024 briefs.

National health spending exceeds $5 trillion

• In April 2024, national health spending was 7.1% higher than in April 2023 and represented 17.7% of GDP.
• Nominal GDP in April 2024 was 5.9% higher than in April 2023, growing 1.2 percentage points more slowly than health spending.
• Personal health care spending growth in April was 7.6%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was highest for home health care, at 14.2%, year over year, while spending on prescription drugs grew the slowest, at 6.8%
• Data from CMS’ recently released National Health Expenditure Projections have been incorporated into this month’s spending brief. 

Health care price growth breaks out to a 15-year record high

• The overall Health Care Price Index (HCPI) increased by 3.4% year over year in May, increasing from the 2.9% growth rate a month prior.
• Economywide inflation held mostly steady, with year-over-year growth in the overall Consumer Price Index (CPI) falling slightly to 3.3% and growth in the Producer Price Index (PPI) slowing to 2.2%. 
• Among the major health care categories, prices for dental care (5.1%), nursing home care (4.8%), and hospital care (4.2%) were the fastest growing, while physician and clinical price growth was the slowest (1.4%).
• Increases in prescription drug, hospital care, and dental care year-over-year prices were major contributors to the record overall health care price index increase, with each at least 1 percentage point higher in May than they were a month prior.
• Among major payers, year-over-year Medicaid price growth (6.1%) exceeded services price growth for private insurance (3.5%) and Medicare (1.7%) patients.
• The implicit measure of health care utilization growth was 4.8% year over year in April, up 0.3 percentage points from the slightly revised value in March (4.5%).

Job openings in health care and social assistance fell by over 200,000 in April 

• Compared to March 2024, job openings in health care and social assistance fell by 204,000 (11.7%) in April, despite job separations growing by 66,000 (9.7%) while hires grew by just 24,000 (3.1%). 
• Health care industry employment grew by 68,300 in May 2024, slightly higher than the average of 65,200 in the past 12 months.
• May’s health care job growth was led by growth in ambulatory health care services, which added 42,700 jobs. 
• Hospitals added 15,000 jobs and nursing and residential care facilities added 10,600 jobs in May. 
• The economy overall added 272,000 jobs in May, well above the 12-month average of 229,670 and the unemployment rate increased slightly to 4.0%. 
• Nominal health care wage growth in April 2024 was 3.3% year over year, compared to 4.1% in non-health care industries. 
• Nominal wage growth in health care settings was highest in nursing and residential care facilities, at 4.3% year over year, followed by ambulatory health care services at 3.3% and hospitals at 2.8%.