October 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 October 2024 briefs.

This month’s health spending data reflect BEA annual revisions

• In August 2024, national health spending was 7.2% higher than in August 2023 and represented 17.5% of GDP.
• Nominal GDP in August 2024 was 4.7% higher than in August 2023, growing 2.5 percentage points more slowly than health spending.
• Personal health care spending growth in August was 7.4%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was highest for home health care, at 11.6%, year over year. Spending growth for hospital care grew the slowest, at 6.0%.
• This month’s spending brief incorporates annual revisions from the Bureau of Economic Analysis National Economic Accounts, with revisions beginning in January 2019.

Health care prices continue to rise faster than economywide inflation

• The overall Health Care Price Index (HCPI) increased by 3.1% year over year in September, up 0.3 percentage points over last month’s revised value.
• Economy-wide inflation fell slightly, with year-over-year growth in the overall Consumer Price Index (CPI) decreasing by 0.1% to 2.4% and growth in the Producer Price Index (PPI) also dropping 0.1%, to 1.8%. 
• Among the major health care categories, prices for nursing home care (4.4%), hospitals (3.9%), and dental care (3.9%) were the fastest growing, while home health price growth was the slowest (1.3%).
• For major payers, year-over-year Medicaid price growth (5.7%) exceeded services price growth for private insurance (3.8%) and Medicare patients (1.7%).
• The implicit measure of health care utilization growth was 4.5% year over year in August, down slightly from the revised July value of 4.6%.
• Home health care utilization increased 10.0% year over year.  While this was the fastest-growing category this month (as it has been since August of 2023), this nevertheless indicates a reduction to below its 3-, 6-, and 12-month moving averages. This category was followed by physician and clinical services (6.8%) and prescription drugs (6.6%), while hospital care and trailed the other categories at 2.6%.

September health care job growth accounted for a smaller share of economy-wide employment growth compared to the previous year

• In September 2024, health care industry employment increased by 45,200 jobs and non-health care industries added 208,800 jobs. Health care jobs accounted for 17.8% of all jobs added in September, compared to 28.3% in the previous 12 months. 
• September’s health care job growth was led by ambulatory health care services, which added 24,300 jobs, followed by hospitals, with 11,500 jobs. 
• Nursing and residential care facilities added 9,400 jobs in September, with 3,900 new jobs in nursing care facilities and 5,500 in other residential care facilities. 
• The unemployment rate decreased slightly to 4.1% in September 2024 from 4.2% in August. 
• For health care and social assistance in August, the job openings rate was 6.1%, the hiring rate was 3.1%, and the total separations rate was 2.7%. 
• Nominal health care wage growth in August 2024 was 3.6% year over year, with growth rates of 4.2% in nursing and residential care facilities, 3.6% in ambulatory health care services, and 3.5% in hospitals.