Health Job Growth Slowing, But Still Higher Than Background

ANN ARBOR — As major changes may loom in the way America pays for healthcare, the industry continued to add jobs and national health spending advanced in October.

That was the word Friday from the monthly Health Sector Economic Indicators, released by the Ann Arbor-based Altarum Institute’s Center for Sustainable Health Spending.

The report did not mention any possible effect on the health care industry of Donald Trump’s presidential win. A call to the company was not immediately returned.

The health care industry added 30,500 jobs in October, a bit less than the 12-month average of 34,600 jobs. By several metrics, health job growth peaked in mid-2015 and has been slowing gradually through 2016. Health jobs grew 2.7 percent year over year, down slightly from rates above 3 percent seen in mid-2015 through mid-2016, but higher than non-health jobs at 1.5 percent. That put the health share of total employment at its all-time high of 10.8 percent.

At a $3.41 trillion annual rate, national health spending in September 2016 was 5.4 percent higher than in September 2015, exhibiting a decline since May 2016 when the growth rate was 5.9 percent. The health spending share of GDP was 18.2 percent in September 2016, falling just below the all-time high of 18.3 percent seen in June 2016. Spending in September 2016, year over year, increased in all major categories. Hospital care grew the fastest, at 6.6 percent. Prescription drugs grew at a 4.5 percent rate, the slowest among the major categories, despite accelerating prices.

In September 2016, Altarum’s Health Care Price Index rose 2.1 percent above the September 2015 level. This is the fastest rate since August 2012, mainly due to prescription drugs whose price growth of 7 percent was the highest since 1992. Despite the upward trending HCPI, hospital prices at 1.2 percent and physician prices at 0.2 percent show continued muted growth. The HCPI has been rising more quickly than economy-wide prices, as has been the industry’s trend even before Obamacare.

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“It is remarkable to see such slow growth in prescription drug spending in the face of such rapid prescription drug price inflation,” said Charles Roehrig, founding director of the Center. “As a result, prescription drugs have recently exerted downward pressure on overall health spending growth while simultaneously driving overall health price inflation up.”

Altarum offers research and consulting to the healthcare industry. It employs more than 450 people at offices in Ann Arbor, Washington, D.C., Silver Spring, Md., Rockville, Md., and Portland, Maine.

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