March 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 March 2024 briefs.

With January GDP decline, health spending grew faster than GDP

• In January 2024, national health spending grew by 6.0% since January 2023 and represented 17.4% of GDP.
• Nominal GDP in January 2024 was 5.1% higher than in January 2023, growing more than 0.8 percentage points more slowly than health spending.
• Personal health care spending growth in January was 7.0%, year over year. As in past months, utilization growth contributed more than growth in prices to this rate, but the relative contribution of prices increased noticeably in January.
• Among major spending categories, year-over-year spending on physician and clinical services grew fastest in January, at 8.5%. Spending on dental services increased the least, at 4.0%.

For every health care and social assistance hire in January, more than two jobs were still open 

• The job openings rate in health care and social assistance was 7.7% in January 2024, versus a hiring rate of 3.2%. 
• Health care employment increased by 66,700 in February, above the 12-month average of 60,100.
• February’s health care job growth was led by growth in ambulatory health care services, which added 28,000 jobs, and hospitals, which added 27,700 jobs. 
• Nursing and residential care facilities added 11,000 jobs in February. Within this industry, nursing care facilities added 6,400 jobs while other nursing and residential care facilities added 4,600 jobs in February.
• The economy overall added 275,000 jobs in February, well above the 12-month average of 229,000. 
• The unemployment rate increased slightly to 3.9% in February.
• Health care wage growth in January 2024 was 3.5% year over year, compared to 4.5% in non-health care industries.
• Wage growth in health care settings was highest in nursing and residential care facilities, at 4.5% year over year, followed by ambulatory health care services at 3.4% and hospitals at 2.7%. 

Health care price growth continues to lag behind utilization increases

• The overall Health Care Price Index (HCPI) increased by 3.2% year over year in February, increasing slightly from the revised growth rate of 3.1% a month prior (up from 2.9%).
• Economywide inflation remained moderate in February, with year-over-year growth in the Consumer Price Index (CPI) increasing slightly to 3.2% and growth in the Producer Price Index (PPI) increasing to 1.6%. 
• Among the major health care categories, prices for dental care (4.9%), nursing home care (4.2%), and hospital care (3.6%) were the fastest growing, while prescription drug price growth was the slowest in February (0.3%).
• Our implicit measure of health care utilization growth fell slightly to 3.9% year over year in January, but continued to drive spending increases as it remained above overall health care price growth.
• Prescription drugs (7.7%) and physician and clinical services (6.6%) were the fastest growing utilization categories, while use of dental care (-0.8%) declined and increases in nursing home care utilization were also small (1.4%).