May 2023 Health Sector Economic Indicators Briefs

May 25, 2023

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 May 2023 briefs.

Growth rates of GDP and national health spending are converging 

  • In March 2023, national health spending grew by 5.4%, year over year, and now represents 17.3% of GDP. 
  • Nominal GDP in March 2023 was 6.4% higher than in March 2022, and grew one percentage point faster than health spending, as the growth rates in GDP and health spending have begun to converge.
  • Neglecting government subsidies, spending on personal health care increased by 7.7%, year over year, and by 7.2% when subsidies are included, exceeding March’s GDP growth rate.
  • Neglecting government subsidies, spending on nursing home care (12.1%) grew fastest in March, while physician and clinical services spending increased the least (5.0%). 

Health care prices accelerate in April amid slowing overall inflation

  • The overall Health Care Price Index (HCPI) increased by 3.4% year over year in April, up 0.5 percentage points from the revised 2.9% growth rate observed in March. 
  • The 3.4% year over year growth rate is the fastest overall health care price growth since December 2007. Month-over-month HCPI growth is also up (0.4% between March and April), implying an even faster annualized rate of 4.5% growth last month.
  • Prices for health care services paid for by private insurance increased by 4.1% in April (up from the revised 3.6% growth in March), while Medicare prices increased 1.1% year over year and Medicaid prices increased 4.9%.
  • Economywide inflation slowed again in April, as overall CPI growth fell from 5.0% to 4.9% and PPI price growth fell from 2.7% to 2.3%. 
  • Among the major health care categories, prices for nursing home care (7.1%) and dental care (7.1%) grew fastest, while physician and clinical services (0.7%) price growth was the slowest.
  • Our implicit measure of health care utilization growth increased again, up 4.3% year over year in March and the fastest increase seen in over a year.

Health care adds about 40,000 jobs in April, consistent with Q1 2023 pace

  • Health care added 39,600 jobs in April 2023, very similar to job growth in March (31.200 new jobs) and February (36,500 new jobs) and consistent with the first quarter (Q1) 2023 average of 40,600 jobs per month.
  • More than 60 percent of April health care job growth was seen in ambulatory care settings, which added 24,200 jobs. Hospitals also added 6,600 jobs and nursing and residential care facilities added 8,800 jobs.  
  • The economy added 253,000 jobs in April, comparable to the average 295,000 jobs per months added in Q1 2023. The unemployment rate dipped for the second month in a row to 3.4%.
  • Wages in health care were growing well above the economywide average from mid-2021 through mid-2022, but health wage growth began declining in fall 2022 and fell below economywide wage growth in December 2022. Health care and economywide wage growth converged in March 2023 at 4.3% year over year. 
  • Wage growth in health care varies by setting of care, with growth in nursing and residential care remaining above other health care settings at 4.8% year over year in March 2023. Wages grew by 4.5% year over year in hospitals. Wage growth in ambulatory care settings remains below the other two major health care settings but has ticked up slightly over the past few months, from 3.6% in January 2023 to 4.1% in March 2023.


Corey Rhyan
Research Director, Health Economics and Policy
George Miller
Fellow and Research Team Leader