November 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 November 2024 briefs.

Monthly GDP decline causes increase in health spending vs GDP growth gap

• In September 2024, national health spending was 7.5% higher than in September 2023 and represented 17.7% of GDP.
• Nominal GDP in September 2024 declined from the previous month and was 4.3% higher than in September 2023, growing 3.2 percentage points more slowly than health spending.
• Personal health care spending growth in September was 7.8%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories continued to be highest for home health care, at 10.7%, year over year. Spending growth for hospital care grew the slowest, at 6.2%.

Health care prices continue to rise faster than economy-wide inflation

• The overall Health Care Price Index (HCPI) increased by 2.6% year over year in October, down 0.4 percentage points from last month’s revised value.
• Year-over-year growth in the overall Consumer Price Index (CPI) increased by 0.2 percentage points to 2.6% and growth in the Producer Price Index (PPI) increased 0.5 percentage points to 2.4%. 
• Among the major health care categories, prices for nursing home care (4.5%), dental care (3.8%), and hospitals (3.0%) were the fastest growing, while physician services price growth was the slowest (1.5%).
• For major payers, year-over-year Medicaid price growth (5.4%) exceeded services price growth for private insurance (3.5%) and Medicare patients (1.2%), continuing a trend beginning in June of 2022.
• The implicit measure of health care utilization growth was 4.7% year over year in October, down from the revised September value of 5.0%.
• Home health care utilization increased 9.6% year over year.  While this was the fastest-growing category this month (as it has been since August of 2023), it is now sitting below its 3-, 6-, and 12-month moving averages. This category was followed by physician and clinical services (7.7%) and prescription drugs (5.8%), while hospital care and trailed the other categories at 2.5%.

Health care job growth offsets job losses in all other industries combined

• In October 2024, health care industry employment increased by 52,300 jobs while non-health care industries lost 40,300 jobs. 
• October’s health care job growth was led by ambulatory health care services, which added 35,600 jobs, followed by nursing and residential care facilities, which added 8,800 jobs. Hospitals added a below-average 7,900 jobs.
• The hiring rate was 3.4% and the total separates rate was 2.9% in September 2024. The job openings rate in September 2024 was 5.4%, the lowest rate since September 2020, when the openings rate was 5.3%.   
• The unemployment rate was 4.1% in October 2024, approximately equal to the rate in September. 
• Nominal health care wage growth in September 2024 was 3.6% year over year, with growth rates of 3.8% in ambulatory health care services and nursing and residential care facilities, and 3.6% in hospitals.