May 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 May 2024 briefs.

National health spending approaches $5 trillion

• In March 2024, national health spending was 6.7% higher than in March 2023 and represented 17.6% of GDP.
• Nominal GDP in March 2024 is 5.8% higher than in March 2023, growing 0.9 percentage points more slowly than health spending.
• Personal health care spending growth in March was 7.3%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was fairly consistent. Spending on hospital care grew the fastest, at 7.9%, year over year, while spending on home health care and dental services grew the slowest, at 6.4% and 6.5%, respectively. 

Health care continued posting large job figures during a cool month for the economy in April 

• The health care industry added 56,200 jobs in April 2024, which accounted for 32% of all jobs across the economy.
• April’s health care job growth was led by growth in ambulatory health care services, which added 33,400 jobs. 
• Hospitals added 13,500 jobs and nursing and residential care facilities added 9,300 jobs in April. 
• The economy overall added 175,000 jobs in April, well below the 12-month average of 233,500, and the unemployment rate increased slightly to 3.9%.
• Nominal health care wage growth in March 2024 was 3.3% year over year, compared to 4.2% in non-health care industries.
• Nominal 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 3.2% and hospitals at 3.1%.

Medicaid price growth exceeded that of other payers in the first four months of 2024  

• The overall Health Care Price Index (HCPI) increased by 2.8% year over year in April, decreasing from the growth rate of 3.1% seen a month prior.
• Economywide inflation held mostly steady, with year-over-year growth in the overall Consumer Price Index (CPI) falling slightly to 3.4%, while growth in the Producer Price Index (PPI) increased to 2.2%. 
• Among the major health care categories, prices for nursing home care (4.5%), dental care (4.1%), and hospital care (3.2%) were the fastest growing, while prescription drug price growth was the slowest in April (0.4%).
• An alternative measure of hospital price growth, the CPI index for hospital and related services, continued to rise in April, up a much greater 7.9% year over year.
• Among major payers, year-over-year Medicaid price growth (6.3%) exceeded services price growth for private insurance (3.2%) and Medicare (1.7%) patients.
• Our implicit measure of health care utilization growth was 4.3% year over year in March and continued to drive the majority of spending increases, as it remained above overall health care price growth.