June 2020 Health Sector Economic Indicators Briefs

Economic Indicators | June 12, 2020

​These monthly briefs analyze the most recent data available on health sector employment, spending, prices, and utilization—helping to fill gaps in the official government data.

We recently made enhancements to the format of these briefs to feature less text and more exhibits as warranted. For example, we feature new dental data in the Labor brief and a new chart in the Price brief showing hospital pricing by payer. 

Please share any feedback on this new format with Co-Director of Sustainable Health Spending Strategies Paul Hughes-Cromwick

Below are highlights from the June 2020 briefs:

SpendingThe COVID-19 pandemic continued to have a major impact on health spending in April 2020. 

  • National health spending in April was 24.3% lower than in April 2019.
  • While March 2020 exhibited the only previous occurrence in our historical time series (which goes back to 1989) of a monthly decline from the previous year, the April reading dwarfs the March value.
  • Spending reductions for most of the major components are even larger.
  • The two largest categories, hospital spending and physician and clinical services spending, fell by 40.7% and 40.9%, respectively, while dental services declined by 60.8%, year over year. 

Download Spending Brief

Labor: Health care jobs have begun to return, starting with the outpatient settings that were most impacted by the Covid-19 shutdown.

  • Health care added 312,000 jobs in May, regaining 20% of the 1.57 million jobs lost in March and April. 
  • All the gains were in ambulatory health care settings, which added 376,000 jobs, regaining 28% of the 1.3M jobs lost since February .
  • Most of the ambulatory care gains were in dental offices, which added 245,000 jobs in May, regaining nearly half (45%) of the more than 500,000 jobs lost since February, and representing nearly 80% of the total health jobs gained in May.
  • Physician offices also gained 51,000 jobs, regaining 18% of the 290,000 jobs lost in that setting.

Download Labor Brief

Price: Pandemic spending gyrations are distorting overall price growth.

  • In May 2020, annual growth in the Health Care Price Index was 3.2%, much higher than readings before COVID-19 that were at or below 2%.
  • The 12-month moving average is 2.0%.
  • We analyzed the bizarre phenomenon of dramatically declining health care spending for hospitals and doctors leading to large increases in the HCPI. There are two forces:
    • some of the other categories have higher price growth, e.g., nursing home care and other personal health care – their added weight pushes the HCPI higher; and
    • the Medical Care CPI is used for items that don’t have good matching price indexes, and lately the MCPI has been growing rapidly. The 4.9% annual rate in May is the highest since December 2002. 

Download Price Brief

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