ANN ARBOR — After several years of record-low increases, health care prices took a jump in April, according to the health care analytics organization Altarium Institute.
Altarum’s monthly Health Sector Economic Indicators report showed that health care prices in April were 1.6 percent higher than in April 2013, well above the March-over-March increase of 1.1 percent.
Year over year, hospital prices — a key price index driver — rose 2.1 percent in April, above the March rate of 1.3 percent. Physician and clinical services prices grew 0.6 percent, and home health care prices rebounded from a year-long negative growth trend, recording a 0.4 percent increase in April. Also, prescription drug prices rose 2.4 percent and are growing at an annual rate of 7 percent over the past quarter.
However, Charles Roehrig, director of Altarum’s Center for Sustainable Health Spending, predicted that “the big story this month is survey data showing that the previously reported acceleration in first quarter health spending will likely be overturned when updated government estimates are released later this month. On the one hand, this is no surprise, given that health care prices and
employment showed no acceleration in the first quarter. On the other hand, expanded coverage and the economic recovery should be pushing spending up. Perhaps these effects will be felt in the second quarter and are evidenced by the current uptick in health care prices and employment.”
Health care gained 34,000 jobs in May, more than twice the average of 16,000 new jobs a month seen across the first four months of 2014. All health care delivery settings saw higher growth, especially ambulatory care, which added 23,000 jobs in May (vs. an average of 15,000 jobs per month over the past year). The health share of total employment rose slightly from 10.61 percent to 10.62 percent, but remains below the high of 10.66 percent last seen in December 2012. For the past year, non-health jobs have been growing slightly faster than health jobs, a pattern not seen since the late 1990s.
Government survey data released on June 11 suggest that the previously reported acceleration in first quarter health spending will be revised significantly downward in the next release from the Bureau of Economic Analysis, which comes out later this month. For further details and an updated perspective on health spending,
Altarum employs almost 400 people and is headquartered in Ann Arbor, with additional offices in the Washington, D.C., area; Portland, Maine; and San Antonio, Texas.