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 March 2023 briefs.
Personal health care spending accelerated in January 2023
- In January 2023, national health spending grew by 4.6%, year over year. Spending on personal health care increased by 6.3%, but that growth was dampened by a decline in federal government support to public health activities.
- Spending on dental services (10.6%), home health care (9.4%) and nursing home care (9.2%) were the fastest growing categories in January, while physician and clinical services spending increased the least (3.5%).
- Health spending in January 2023 accounted for 17.2% of nominal GDP.
- Nominal GDP in January 2023 was 7.4% higher than in January 2022, as GDP growth continues to outpace health spending growth.
Overall health care price growth remains moderate as private prices increase
- The overall Health Care Price Index (HCPI) increased by 2.7% year over year in February, up from the slightly revised 2.6% growth rate a month prior in January.
- Growth in the HCPI continues to remain remarkably steady, sitting between a tight 2.0% to 3.0% year-over-year growth rate range for 17 of the most recent 18 months.
- Prices for health care services paid for by private insurance increased by 4.1% in February (up from 3.5% in January), while Medicare prices actually fell slightly last month, down -0.2% year over year.
- Economywide inflation slowed again in February, as overall CPI growth fell from 6.4% to 6.0% and PPI price growth fell to 4.6%. Economywide services (less healthcare) inflation rose again, up 8.3% year over year.
- Among the major health care categories, prices for dental care (6.6%) and nursing home care (5.6%) grew fastest, while physician services (0.6%) and home health care (1.9%) price growth were the slowest.
- Our implicit measure of health care utilization returned to positive growth in January, up 3.7% year over year. Home health care utilization (7.5%) and prescription drug utilization (5.3%) increased most last month.
Steady health care job growth seen throughout 2022 continues into 2023
- Health care added 44,200 jobs in February 2023, consistent with the 12-month average of 49,100.
- February health care job growth was led by hospitals, which added 19,400 jobs. Nursing and residential care facilities added 13,700 jobs and ambulatory settings added 11,100 jobs.
- Three years later, health care employment is just above where it was in February 2020 before the pandemic (207,000 jobs or 1.3% above); however, the story varies by setting. Hospital employment is close to the level of three years ago (42,000 jobs or 0.8% above), ambulatory care employment is well above (nearly 440,000 jobs or 5.6% above) and nursing and residential care employment remains more than 270,000 jobs below the level of three years ago.
- The economy also showed another month of solid job growth, adding 311,000 jobs in February, similar to the 12-month average of 362,000 jobs. The unemployment rate bumped up slightly to 3.6% amid a gradual rise in labor force participation.
- Wage growth in health care has been declining since mid-2022 and has now fallen slightly below economywide wage growth. In January 2023, health care wages grew by 4.2% year over year while total private sector wages grew by 4.4%.