May 2022 Health Sector Economic Indicators Briefs

Economic Indicators | May 17, 2022

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 May 2022 briefs.

National health spending continues to grow more slowly than GDP

  • National health spending in March 2022 grew by 4.8%, year over year. In the absence of federal government support in 2021 and a lesser amount in 2022, health spending would have grown by 6.8%.
  • For the first quarter of 2022, national health spending was 4.9% above its first quarter 2021 level and would have been 7.1% higher in the absence of federal government support.
  • GDP in March 2022 was 9.7% higher than in March 2021. For the first quarter of 2022, it was 10.6% higher than in the first quarter of 2021. Both rates are significantly higher than health spending growth, even in the absence of federal support.

Falling Medicare price growth pulls health care inflation lower

  • Growth in the overall Health Care Price Index (HCPI) fell slightly in April, rising only 1.9% year over year, less than the 2.3% growth of a month prior and well below economywide inflation.
  • For the first time in over a year, both measures of economywide inflation growth slowed slightly in April, CPI growth declined to 8.3% and PPI growth to 11.0%, although both are still very close to all-time highs. This drop was driven mostly by declines in growth of commodities prices, which fell from 14.2 to 12.9% year over year.
  • Among major health care categories, physician services and prescription drug prices increased the least in March (0.4% and 1.7% year over year respectively), while home health care and nursing home care prices increased the fastest at 2.4% and 2.3%.
  • Growth in prices paid by Medicare for health care services fell noticeably in April, from 1.1% to 0.2%, while private insurance price growth increased to 3.2% year over year. This represents the largest gap between the two since the by-payer series began in 2014.

Health employment continues moderate growth, mostly in ambulatory settings

  • Health care employment grew by 34,300 jobs in April 2022, with gains of 27,900 jobs in ambulatory care settings, 4,500 jobs in hospitals, and 1,900 jobs in nursing and residential care. The low estimate of March job growth was revised up from 8,300 to 23,300 jobs.
  • More than two years since the start of the pandemic, the level of health employment is 250,000 jobs (1.5%) below the pre-pandemic peak, while the distribution of jobs has continued to shift from inpatient and residential settings to ambulatory settings. Employment in ambulatory settings is now 246,000 jobs (3.1%) above where it was in February 2020, while hospital employment remains 93,000 jobs (1.8%) below February 2020 and nursing and residential care employment is down by 402,000 jobs (11.9% decline).
  • The economy added 428,000 jobs in April, matching the gain in March. Through the first four months of 2022, the economy added an average of 519,000 jobs per month. Total employment is now 1.19 million jobs, or less than 1%, below the pre-pandemic peak, while the unemployment rate remains at 3.6%.
  • Wage data are consistent with a tight labor market overall and in health care in particular. Average hourly earnings in health care grew 7.3% year over year in March 2022 (the most recent industry-level data). Earnings across all private sector jobs grew 5.6% year over year in March and 5.5% in April 2022.


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