Healthcare Consultant Finds Long-Predicted Boost In Health Spending

ANN ARBOR — The 10 million people who now have health insurance thanks to the Affordable Care Act may finally be producing a surge in healthcare spending, according to the monthly Health Sector Economic Indicators, released by the Center for Sustainable Health Spending at the Ann Arbor-based healthcare consultant Altarum Institute.

The survey showed a 5.4 percent increase in spending on healthcare services in the third quarter, from July through September, compared to the same quarter in 2013.

Altarum noted that that’s substantially higher than the 3.7 percent growth rate in the second quarter and the 3.9 percent growth rate experienced for all of 2013.

The survey also found that the acceleration in health sector employment continued, with 28,900 new jobs created in healthcare in November, plus upward revisions totaling 5,000 for the two previous months. From April through November 2014, health care averaged 27,000 new jobs per month, compared with 17,500 for the prior 12 months.

Healthcare’s share of overall U.S. employment remained at 10.62 percent. The all-time high of 10.66 percent was last reached in December 2012. For over a year, non-health jobs have been growing slightly faster than health jobs.

Health care prices in October 2014 were 1.5 percent higher than in October 2013, two-tenths below the September year-over-year reading. The October 2014 12-month moving average rose to a rate of 1.5 percent, which the report called “still quite low.” Year-over-year hospital prices grew 1.1 percent in October, the lowest increase since September 1998. Prescription drug prices, however, jumped 4.1 percent year over year, up from an increase of 3.8 percent year over year in September 2014.

“The third quarter acceleration in healthcare services spending reported in the QSS is in line with expectations, but with a delay,” said Charles Roehrig, director of the center. “While it is too early for definitive conclusions, this may well represent the predicted ramping up in spending by the estimated 10 million individuals gaining coverage in early 2014 under the Affordable Care Act.”

More at — including a new blog post by the center’s deputy director, Ani Turner, that explores the relationship between states expanding Medicaid and accelerating health care jobs.

Altarum provides resaerch and consulting to the healthcare industry. It employs almost 400 people at offices in Ann Arbor, Washington, D.C., Institute ( integrates objective research and client-centered consulting skills to deliver comprehensive, systems-based solutions that improve health and health care. Altarum employs almost 400 individuals and is headquartered in Ann Arbor, Michigan, with additional offices in the Washington, D.C., area; Portland, Maine; and San Antonio, Texas.

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