August 2022 Health Sector Economic Indicators Briefs

Economic Indicators | August 19, 2022

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 August 2022 briefs.

National health spending shows early signs of acceleration

  • National health spending in June 2022 grew by 6.3%, year over year; in the absence of federal government support in 2021 and 2022, it would have grown by 5.6%. Health spending has begun to show signs of acceleration.
  • GDP in June 2022 was 9.6% higher than in June 2021 as GDP growth continues to outpace health spending growth.
  • In June 2022, health spending accounted for 17.9% of GDP and has continued its decline from a recent high of 18.8% of GDP in December 2021.

Health care price growth is above average for the second straight month

  • The overall Health Care Price Index (HCPI) increased by 2.7% year over year in July, down slightly from the 2.8% growth in June. July’s 2.7% price growth is above the 2022 average of 2.4% and is the second-largest increase seen through the first seven months of this year.
  • Private payer price growth continues to be the driving factor—private prices for health services increased 4.1% in July, while Medicaid prices increased by 3.4%, and Medicare prices fell by 0.6%.
  • Economywide inflation slowed in July as compared to June. Economywide CPI year-over-year growth slowed to 8.5 % and PPI growth slowed to 9.8%. Services CPI growth (excluding health care) was at 6.4% year over year, the same as the month prior, and commodities inflation slipped marginally to 12.0%.
  • Among the major health care categories, physician and clinical services prices increased the least in July (0.4%), while dental care (4.1%) and hospital care prices (3.3%) increased the fastest.
  • Growth in the implicit measure of utilization for June was 2.8%, up from 2.5% year-over-year growth in May.

Health care job growth strong as economywide jobs return to pre-pandemic level

  • Health care employment grew by a robust 69,600 jobs in July 2022. Gains were seen in all major settings of care, with ambulatory care adding 47,300 jobs, hospitals adding 12,900 jobs, and nursing and residential care facilities adding 9,400 jobs.
  • Health care employment remains just under the pre-pandemic peak, down 78,000 jobs, or 0.5% compared to February 2020. Employment in ambulatory settings is 327,000 jobs (4.2%) above where it was in February 2020, while hospital employment remains 43,000 jobs (0.8%) below February 2020 and nursing and residential care employment is down by 363,000 jobs (10.7% decline).
  • With the 528,000 jobs added in July, the overall economy returned to the pre-pandemic employment level of 152.5 million jobs, and the unemployment rate returned to the pre-pandemic low of 3.5%.
  • Wages in health care have been growing faster than overall wages in the past year, with year over year growth averaging 6.9% in health care since July 2021, compared to 5.1% for all private sector jobs. Looking at the most recent data point, in June 2022, average hourly earnings in health care grew 7.4% year over year, while earnings across all private sector jobs grew 5.2%. By setting of care, average earnings in residential care settings grew by 9.7%, compared to 8.5% in hospitals and 5.6% in ambulatory care settings.
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