Healthcare price growth approaching ‘historic low’
price growth in healthcare was at a 1.1 percent annual rate as of Sept. 2017 compared to a year earlier according to the Altarum Institute, coming close to the all-time low of 0.9 percent annual growth seen in Dec. 2015.
The group’s latest economic indicators report said the low price growth was “largely impacted by health policy uncertainty and structural health sector changes. Year-over-year spending was 4.3 percent higher than in Sept. 2016, hitting $3.53 trillion. Altraum attributed slower spending growth to the hospital sector, which saw its spending growth hit a 28-year low in June and was 1.9 percent for Sept. 2017.
At the same time, hospital employment was also been growing more slowly. The year-over-year healthcare jobs growth dropped below 2 percent for the first time since 2014, with hospitals predicted to add an average of 5,000 jobs per month in 2017, compared to the 10,000-11,000 monthly average seen over the past two years.
“These trends toward slower growth may reflect the continuing shift in the delivery of care from inpatient to outpatient settings and in hospitals’ ongoing efforts to control increasing costs,” the report said.
Only 2,800 hospital jobs were added in Oct. 2017, about half of the sector’s 12-month average, while the setting still made up 32 percent of all healthcare employment.
Other categories of healthcare spending also showed sluggish growth in September. Only professional services (2.3 percent growth) and nursing home care (2.1 percent) saw annual price growth above 2 percent. Even prescription drug spending growth fell sharply, down from 2.7 percent the month prior to 1.4 percent.
Hospitals prices grew more slowly for Medicaid and Medicare than for private insurance, which saw 2.3 percent growth in September. The gap has continued to widen, the report said, between those CMS program and private payer prices. Since June 2014, hospital prices for Medicare (-0.7 percent) and Medicaid (-0.6 percent) have been moving in the opposite direction from private pay patients (8.3 percent growth).
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.