September 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 September 2024 briefs.

National health spending growth moderates; home health care growth remains high

• In July 2024, national health spending was 7.1% higher than in July 2023 and represented 17.6% of GDP.
• Nominal GDP in July 2024 was 5.6% higher than in July 2023, growing 1.5 percentage points more slowly than health spending.
• Personal health care spending growth in July was 7.3%, year over year, with utilization growth continuing to outpace price growth. 
• Growth among major spending categories was highest by far for home health care, at 18.2%, year over year. Spending growth on each of the other major categories was below 10%, with spending on hospital care growing the slowest, at 5.7%.

Health care prices continue to rise faster than economywide inflation

• The overall Health Care Price Index (HCPI) increased by 2.7% year over year in August, down 0.2 percentage points from a month prior.
• Economywide inflation fell, with year-over-year growth in the overall Consumer Price Index (CPI) decreasing to 2.5% and growth in the Producer Price Index (PPI) dropping to 1.7%. 
• Among the major health care categories, prices for nursing home care (3.8%) and dental care (3.5%) were the fastest growing, while physician and clinical 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 (3.2%) and Medicare patients (1.7%).
• The implicit measure of health care utilization growth was 4.5% year over year in July, equal to the revised June value.
• Home health care utilization was, by far, the fastest growing component, increasing 15.9% year over year.  This category was followed by physician and clinical services (6.7%), prescription drugs (5.6%), and nursing home care (5.1%), while hospital care and dental services trailed the other categories at 2.7% and 2.6%, respectively.

The health care industry only added 30,900 jobs in August 2024, a below-average month for the economy overall

• In August 2024, health care industry employment increased by 30,900 and non-health care industries added 111,100. These figures were both well below monthly averages for the previous 12 months. 
• August’s health care job growth was led by ambulatory health care services, which added 23,900 jobs, followed by hospitals, with 9,600 jobs. 
• Nursing and residential care facilities had a net loss of 2,600 jobs in August, comprising 3,600 jobs lost in nursing care facilities and 1,000 jobs gained in other residential care facilities. 
• The unemployment rate decreased slightly to 4.2% in August 2024 from 4.3% in July. 
• In health care and social assistance in July, the job openings rate was 6.0%, the hiring rate was 3.5%, and the total separations rate was 3.3%. 
• Nominal health care wage growth in July 2024 was 3.5% year over year, with growth rates of 4.1% in nursing and residential care facilities, 3.6% in hospitals, and 3.4% in ambulatory health care services.