ANN ARBOR — The monthly Health Sector Economic Indicators from the Center for Sustainable Health Spending, part of the Ann Arbor health care consulting firm Altarum Institute. showed that healthcare inflation remains low, while healthcare spending is rising, and healthcare’s share of the economy’s job is at an all-time high.
The full report is at www.altarum.org/HealthIndicators.
The report showed that the health sector of the economy added 40,500 new jobs in August, for a total of 314,000 added through the first eight months of 2015. That’s nearly twice the number added during the first 8 months of 2014.
Health jobs are growing at 3.1 percent year over year, the highest rate since 2002. The survey also showed the highest job openings rate since 2002, an indication that robust health sector job growth will continue.
The health share of total employment increased to 10.67 percent of all jobs, a new all-time high.
National health spending in July was 5.6 percent higher than health spending in July 2014, down from an eight-year high growth rate of 6.8 percent hit in December 2014. Spending in July 2015, year over year, increased in all major categories. Prescription drugs grew the fastest, by 9.7 percent. The health spending share of gross domestic product was 18.1 percent in June, barely below the all-time high of 18.2 percent recorded in March 2015.
Health care prices in July 2015 were just 1.1 percent higher than in July 2014, for the fourth consecutive month, and only 0.1 percent above the decade-plus low of 1 percent growth registered in August 2013. Year-over-year hospital prices rose 0.9 percent in July, the highest since September 2014. Physician and clinical services prices fell 1.1 percent, only 0.1 percent above the multi-decade low recorded in June. Prescription drug prices rose 4.4 percent, down from 4.8 percent growth in June and 6.4 percent growth in December 2014.
“It is no accident that the health care share of total jobs has reached a new high at the same time that the share of the population without health insurance is at a new low. There are close to 10 million more people with health insurance than there were a year ago, and this has both increased the demand for health care and reduced the uncompensated component,” said Charles Roehrig, director of the
Center. “These factors help explain the surge in health care spending and jobs despite the slow growth in prices for health care services.”
Altarum provides research and consulting to the healthcare industry. It has nearly 400 employees and offices in Ann Arbor, Washington, D.C., Silver Spring, Md., Rockville, Md. Portland, Maine and San Antonio, Texas.