ANN ARBOR — The latest Health Sector Economic Indicators from Ann Arbor’s Altarum Institute shows that health inflation is low, except in prescription drugs, and employment growth in healthcare is high.
The report from Altarum’s Center for Sustainable Health Spending shows health sector employment began 2015 much as it left off in 2014, adding 38,300 new jobs in January 2015, consistent with the 39,000 new jobs per month seen in the fourth quarter of 2014.
Over the past three months, the health sector has added 127,000 jobs, the largest quarterly increase since January 1990 — which is as far back as Altarum’s data go.
The six-month gain of 213,000 health jobs was the largest in nearly 25 years. Job growth was particularly strong in hospitals (9,600) and physicians’ offices (13,400).
In terms of health care prices, drug prices are spiking upward, while hospital price increases are low.
Health care prices overall in December 2014 were 1.8 percent higher than in December 2013, two-tenths of a percentage point above the November rate.
Year-over-year hospital prices grew 0.9 percent in December, the lowest rate of growth in more than 16 years. Home health care prices rebounded from their earlier negative growth trend, recording a 1.9 percent growth rate in December, above the November rate of 1.4 percent, their highest reading since July 2009. Prescription drug prices rose 6.4 percent, a growth rate not seen since 1992, and well up from 4.6 percent in November.
Preliminary estimates indicate that national health spending grew by 5 percent in 2014 and by 5.6 percent in December 2014 compared with December 2013, up significantly from the official 2013 national spending growth rate of 3.6 percent, which was the all-time low.
The health-spending share of gross domestic product was 17.8 percent in December, up from 16 percent at the start of the recession in December 2007. Spending in December, year over year, increased in all major categories. Spending on prescription drugs had by far the fastest growth rate, at 13 percent.
“This recent surge in health sector hiring suggests that the acceleration in health services spending observed in the third quarter is likely to have continued into the fourth,” said Charles Roehrig, director of the center. “New evidence will come from the Quarterly Services Survey data to be released on March 11. The March issue of our new monthly Health Sector Trends Report will incorporate this information to provide a complete picture of health
spending for 2014.”
The complete report is available at www.altarum. org.
Altarum supplies research and consulting to the health care industry. It employs almost 400 people and has other offices in Washington, D.C., Portland, Maine and San Antonio, Texas.