October 2022 Health Sector Economic Indicators Briefs

Economic Indicators | October 21, 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 October 2022 briefs.

Spending grows faster than pre-pandemic, but slower than inflation

  • National health spending in August 2022 grew by 4.9%, year over year.
  • Following the Bureau of Economic Analysis’ recent annual update to their National Income and Product Accounts (NIPA), health spending in August 2022 is estimated to account for 17.4% of GDP, the lowest share since June 2015.
  • With the NIPA updates, nominal GDP in August 2022 was 9.4% higher than in August 2021 as GDP growth continues to outpace health spending growth.
  • The health spending share of GDP has declined from a newly estimated recent high of 18.4% of GDP in December 2021, largely because of high economy-wide inflation.

Negative Medicare price growth keeps health care inflation under control

  • The Health Care Price Index (HCPI) increased by 2.8% year over year in September, the same growth rate as slightly revised data from August.
  • Private payer price growth continues to pull overall health care inflation upwards—private prices for health services increased 3.5% year over year in September, while Medicaid prices increased by 3.9%, and Medicare prices dropped by 0.8%.
  • The overall HCPI growth rate of 2.8% is well below the CPI-U measure of medical care inflation in September (6.0%), due to differences in the underlying payer and component data included in that CPI index. 
  • Economywide price growth slowed very slightly this month, as overall CPI inflation fell to 8.2%. Services CPI growth (excluding health care) increased 7.5% year over year, while commodities inflation fell to 9.6%.
  • Growth in our implicit measure of utilization for August was 2.2%, the same as a month prior, kept down by hospital utilization growth of only 0.1% last month.

Health care jobs return to pre-pandemic level

  • After two and a half years, health care has regained the jobs lost in the spring of 2020 and is back to the pre-pandemic level of employment. Hospital employment has also returned to the February 2020 level.
  • Health care gained a robust 60,100 jobs in September 2022, with ambulatory settings gaining 28,100 jobs, hospitals gaining 27,500 jobs, and nursing and residential care gaining 4,500 jobs.
  • While the overall level of health employment is back to that of February 2020, jobs have shifted away from residential care settings and into ambulatory care settings. Jobs in ambulatory settings are 366,000 (4.6%) above the pre-pandemic level, while jobs in nursing and residential care are 346,000 (10.2%) below.
  • The economy added 263,000 jobs in September, showing some moderation from the average gain of 420,000 per month through the first three quarters of 2022. The unemployment rate fell to 3.5%.
  • Wages in health care continue to grow faster than overall private sector wages but the gap narrowed a bit. In August 2022, average hourly earnings in health care grew 6.8% year over year, while earnings across all private sector jobs grew 5.2%. By setting of care, average earnings in residential care settings grew by 8.3%, compared to 7.9% in hospitals, and 5.5% in ambulatory care settings.


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