Economic reports show increases in healthcare spending, prices, new jobs over past year
Spending on healthcare throughout the U.S. grew 5.2 percent between June 2015 and June 2016, outpacing the 2.3 percent growth in the country’s gross domestic product (GDP), according to new economic reports from the Altarum Institute.
Over the same time period, health prices went up—they were 1.6 percent higher compared to June 2015, the highest rate since December 2014.
The figures illustrate how the long-term trend of healthcare prices and spending outpacing growth in other industries is continuing, but becoming more “moderate,” according to Altarum’s health spending experts, compared to the near 7 percent year-over-year growth rates seen in late 2014.
“Health spending growth has shown the expected slowing since the bump associated with Affordable Care Act expanded coverage, and could drop below 5% during the second half of 2016,” said Charles Roehrig, director of the institute’s Center for Sustainable Health Spending. “This would be consistent with the latest CMS 11-year projections showing 4.8 percent growth for 2016.”
Hospitals made up the largest share of health spending in June 2016, accounting for 32 percent of total spending at $1.07 trillion. It was followed by physician and clinical spending, which had a 20 percent share at $672 billion.
Year-over-year spending was up in all major categories, with home healthcare seeing the fastest growth at 8 percent. The growth in prescription drug spending appeared to slow down, rising by just over 5 percent, compared to the 8.3 percent year-over-year growth in the 12-month period ending in June 2015.
The growth in prices for those prescriptions, however, didn’t show any signs of slowing down in Altarum’s separate price report. Drug prices grew 4.4 percent year-over-year, easily outpacing 1 percent growth in hospital prices and 0.3 percent growth in prices for clinical services.
Altarum’s labor report, released along with the spending and price analyses, was largely positive. Some 43,000 new jobs were added in healthcare in June 2016, above the 12-month average of 39,700. Hospital jobs also beat the monthly average, adding 17,100 new workers.
John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.