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 December 2022 briefs.
Health spending growth and GDP growth are both moderating
- National health spending in October 2022 grew by 2.1%, year over year. The small growth rate was driven by a large decline in government support to public health activities.
- Health spending in October 2022 is estimated to account for 17.2% of GDP.
- Nominal GDP in October 2022 was 7.3% higher than in October 2021 as GDP growth continues to outpace health spending growth.
- The Centers for Medicare & Medicaid Services is expected to soon release the official estimates of national health spending for 2021. We will incorporate the effects of these spending estimates in our January brief.
Health care price growth and economywide inflation continue to slow
- The Health Care Price Index increased by 2.7% year over year in November, down from 2.9% in October.
- Economywide price growth slowed again this month, as overall CPI inflation fell from 7.7% to 7.1% and PPI price growth fell to 7.4%.
- While economywide inflation was largely driven by commodities prices in 2021 and the first half of 2022, services inflation has been increasing as commodities inflation has been falling, so that in November, overall services CPI growth, excluding health care, now exceeds overall commodities inflation, increasing 7.6% year over year versus 7.0% for goods.
- Among the major health care categories, prices for dental care (6.4%), nursing home care (4.3%), and hospital services (3.1%) were the fastest growing, while physician services (0.3%) and prescription drug (1.9%) price growth were the slowest growing categories.
- Year-over-year growth in hospital prices paid by private insurance (4.8%) remain above Medicare hospital price growth (1.7%), although private price growth has slowed somewhat from the peak in August (5.5%).
Health care job growth remains strong across all major settings of care
- Health care added 44,700 jobs in November, consistent with the average of 47,000 new health care jobs per month added in 2022. This compares to an average of 9,000 new jobs per month added in 2021.
- Nearly half of the job growth was in ambulatory care settings, which added 23,300 jobs in November. Other major settings of care also showed solid job growth, with hospitals adding 11,000 jobs and nursing and residential care adding 10,400 jobs.
- The economy added 263,000 jobs in November, similar to the previous three months. The economy has added an average of 392,000 jobs per month in 2022. The unemployment rate held steady at 3.7%.
- As we saw last month, health care wage growth appears to be moderating. After peaking at 7.4% growth year over year in July, health care wages grew by 5.4% in October, nearer to economy-wide wage growth of 4.9%. Wage growth fell to 7.0% in nursing and residential care compared to a peak of 11.0% in March 2022, while hospital wage growth ticked up slightly to 6.1% and ambulatory care wage growth was up slightly to 4.6%, both still down from recent peaks of 8.5% and 5.8%, respectively.