Ann Arbor, MI — At $3.67 trillion (seasonally adjusted annual rate), national health spending in July 2018 was 4.8 percent higher than it was in July 2017, and the health spending share of gross domestic product (GDP) was 17.8 percent. The latter represents a drop from 18 percent in July 2017 as stable health care spending growth was outweighed by higher GDP growth (5.7 percent). Spending in July 2018, year over year, increased in all major categories. Spending on dental services grew the fastest, at 7.6 percent. Growth in spending on physician and clinical was the slowest, at 3.9 percent.
The health sector added 33,200 jobs in August 2018, above the 12-month average of 25,100. Despite strong economy-wide hiring (a total of 201,000 non-farm jobs gained in August), the health care share of total employment increased to a new all-time high of 10.77 percent. Hospitals added 8,200 jobs in August, near the 12-month average. Ambulatory settings such as physician offices and home health added 21,100 jobs, higher than the 12-month average of 16,600.
“As we anticipated last month, health sector hiring bounced back in August to bring hiring in the second half of 2018 back in line with the previous 5 quarters,” says Ani Turner, Co-Director of Altarum Sustainable Health Spending Strategies, who produces the Health Sector Economic Indicators Labor Brief each month. “Starting in Q2 2017, the health sector has added between 70,000 and 80,000 jobs each quarter, and Q3 2018 is now on track to be the sixth quarter at this pace.”
Meanwhile, annual health care price growth, at 1.6 percent in August, is surprisingly modest. Year-over-year hospital price growth was 2.5 percent in August (for the 3rd straight month) after hitting a high of 2.8 percent in May. Physician and clinical services price growth rose from 0.4 percent in July to a still very low 0.8 percent in August. Annual drug price growth was extremely low in July (0.9 percent), and fell further to 0.8 percent in August.
View Reports: September 2018 Health Sector Economic Indicators Briefs