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 June 2023 briefs.
Personal health care spending growth exceeds GDP growth for third month
- In April 2023, national health spending grew by 5.6%, year over year, and now represents 17.5% of GDP.
- Nominal GDP in April 2023 was 6.9% higher than in April 2022, and grew 1.3 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 April increased by 8.8%, year over year, and by 8.0% when subsidies are included, exceeding the GDP growth rate for the third consecutive month.
- Neglecting government subsidies, spending on nursing home care (13.6%) grew fastest in April, while physician and clinical services spending increased the least (6.4%).
- Data from CMS’ recently released National Health Expenditure Projections have been incorporated into this month’s spending brief.
Health care price and utilization growth continue upward trends
- The overall Health Care Price Index (HCPI) increased by 3.3% year over year in May, the same as the slightly revised growth rate observed a month earlier in April.
- The 3.3% year over year growth rate is 1.3 percentage points faster than a year ago and tied with the prior month for the fastest overall health care price increase since December 2007.
- Economywide inflation continued to slow, as overall CPI growth fell from 4.9% to 4.0% and PPI price growth fell from 2.3% to 1.1% in May.
- Prices for health care services paid for by private insurance increased by 3.9% in May, while Medicare prices increased 1.0% year over year, and Medicaid prices increased 4.9%.
- Among the major health care categories, prices for nursing home care (6.9%) and dental care (6.6%) 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 4.7% year over year in April, greater than the 4.6% growth a month prior.
Health care adds 52,400 jobs in May, consistent with 12-month average
- Health care added 52,400 jobs in May 2023, somewhat more than the average of 42,000 jobs added in the first four months of 2023, but consistent with the 12-month average of 52,000 jobs added per month.
- Nearly half of May’s health sector job growth was seen in ambulatory care settings, which added 23,900 jobs, followed closely by hospitals, which added nearly 20,000 jobs.
- Nursing and residential care facilities added 8.900 jobs, with growth occurring in both nursing homes (2,900 jobs) and other nursing and residential care (6,000 jobs).
- The economy added 339,000 jobs in May, similar to the average 308,000 added in the first four months of 2023. The unemployment rate rose to 3.7%.
- Health care wage growth in April 2023 continues to be aligned with economywide wage growth at 4.4% year over year.
- Wage growth in health care settings is now highest in hospitals, at 5.1% year over year in April 2023. Wage growth in nursing and residential care has fallen to 4.7% from a high of 11.0% last spring, while wage growth in ambulatory care settings was 3.6%.