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 July 2023 briefs.
High personal health care spending growth is driven by utilization rather than prices
- In May 2023, national health spending grew by 6.0%, year over year, and now represents 17.5% of GDP.
- Nominal GDP in May 2023 was 6.5% higher than in May 2022, and grew 0.5 percentage points faster than health spending, as the growth rates in GDP and health spending have continued to converge.
- Neglecting government subsidies, spending on personal health care in May increased by 9.3%, year over year, and by 8.5% when subsidies are included, exceeding the GDP growth rate for the fourth consecutive month.
- Neglecting government subsidies, year-over-year spending on nursing home care (12.7%) and home health care (12.2%) grew fastest in May, while physician and clinical services spending increased the least (8.2%) among major categories.
- Personal health care growth (neglecting government subsidies) continues to be dominated by growth in utilization rather than price increases.
Economywide inflation and overall health care price growth slows
- The overall Health Care Price Index (HCPI) increased by 2.8% year over year in June, slowing nearly half a percentage point from the prior month of May (3.2%).
- Through the first six months of 2023, overall health care price growth has averaged 2.9% year over year, slightly above the 2.6% average growth rate seen for the calendar year 2022.
- Economywide inflation continued to slow in June, as overall CPI growth fell from 4.0% to 3.0% and PPI price growth fell from 0.9% to 0.1%.
- Among the major health care categories, prices for nursing home care (6.2%) and dental care (4.6%) grew fastest, while physician and clinical services (0.6%) price growth was the slowest.
- Our implicit measure of health care utilization growth increased again, up 5.3% year over year in May, greater than the 5.2% growth a month prior.
Health care adds 41,100 jobs in June, similar to year-to-date average
- Health care added 41,100 jobs in June 2023, similar to the average of 42,300 jobs added thus far this year, but somewhat below the 12-month average gain of 49,900 per month.
- June’s health sector job growth was led by growth in hospitals, which added 15,000 jobs, followed closely by ambulatory care settings, which added 13,800 jobs.
- Nursing and residential care facilities added 12,300 jobs in June, with growth occurring in both nursing homes (6,200 jobs) and other nursing and residential care (6,100 jobs).
- The economy added 209,000 jobs in June, somewhat below the year-to-date monthly average of 278,000 jobs. The unemployment rate, at 3.6%, changed little in June.
- Health care wage growth in May 2023 was 4.1% year over year, slightly below the total private sector wage growth of 4.4%.
- Wage growth in health care settings is now highest in hospitals, at 5.4% year over year in May 2023. Wage growth in nursing and residential care has fallen to 4.4% from a high of 11.0% last spring, while wage growth in ambulatory care settings was 3.0%.