Health Jobs Defy ACA Uncertainty with Surge in December

ANN ARBOR — Despite huge unknowns in whether or when the Affordable Care Act will be repealed and what will replace it, the health care industry in the United States added a whopping 43,000 jobs in December, well above the 12-month average of 35,000 jobs, and bucking a four-month trend of below-average growth.

That’s according to the Health Sector Economic Indicators, released monthly by the Center for Sustainable Health Spending, part of the Ann Arbor-based health care consultants Altarum Institute.

The industry added more than 400,000 new health care jobs in the year, representing one-fifth of total new jobs in the U.S., and propelling the health share of total employment to another all-time high of 10.82 percent.

As for spending, national health spending in November 2016 grew at an annual rate of 5 percent, driven by hospital care growth at 5.8 percent, and restrained by prescription drugs, which grew at only 3.5 percent. Spending in 2016 is on pace for 5.4 percent growth, a welcome deceleration from the 5.8 percent growth in 2015, but above the 4.8 percent rate that the Centers for Medicare & Medicaid Services projected for 2016 this past July. At $3.43 trillion, the health spending share of gross domestic product was 18.3 percent in October, tied with the all-time high first seen in May.

Health care inflation remains relatively tame, with health care prices in November 2016 2.1 percent above the November 2015 level, fractionally below the 2.2 percent annual growth rate recorded in October. This stability follows a period of steady price acceleration over the previous six months. After hitting a 24-year high, prescription drug price growth fell to a still-high 6 percent rate, prices for physician services showed almost no growth, and hospital prices rose 1.6 percent — a low rate to be sure, but still the highest in over 2 years.

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“We expected Quarterly Services Survey data for the third quarter of 2016 to push our health spending estimate downward, and this turned out to be the case, as detailed in our December Health Sector Trend Report,” said Charles Roehrig, founding director of the center. “While it now seems clear that the spending growth rate for 2016 will come in below the 5.8 percent official rate for 2015, we remain puzzled about the still high health hiring — particularly given the post-election uncertainties about the Affordable Care Act and a possible roll-back of expanded coverage. Perhaps December hiring reflects plans made prior to the election and we must await January data as an indicator of industry reaction.”

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