National health spending is increasing but at a more sluggish rate than the gross domestic product, according to Altarum’s monthly Health Sector Economic Indicators (HSEI) brief.
National health spending in March 2022 ($44 trillion) expanded by 4.8%, year over year, compared to a 9.7% year-over-year increase in the gross domestic product. According to the analysts, “in the absence of federal government support in 2021 and a lesser amount in 2022,” health spending would have grown by 6.8%. For the first quarter of 2022, national health spending was 4.9% above its first quarter 2021 level and would have been 7.1% higher “in the absence of federal government support.”
Limited spending in the healthcare sector may be attributed to several factors, especially the decline in federal support that was prevalent at the height of the pandemic through the Paycheck Protection Program, the Provider Relief Fund and the Public Health and Social Services Emergency Fund, to name a few, the brief said.
Growth in prices paid by Medicare for healthcare services fell in April, from 1.1% to 0.2% and private insurance price growth increased to 3.2%, year over year.
“This represents the largest gap between the two since the by-payer series began in 2014,” the authors wrote.
Healthcare employment climbed by 34,300 jobs in April 2022; 1,900 of those jobs were in nursing and residential care. According to the analysts, the low estimate of March job growth was revised up to 23,300 jobs from 8,300 jobs. Although healthcare employment is increasing, the figure is still well below pre-pandemic numbers. The level of health employment is 250,000 jobs (1.5%) below the pre-pandemic peak.
Healthcare workers’ wages are improving, the analysts found. Average hourly earnings in healthcare grew 7.3% year over year in March 2022, whereas earnings across all private sector jobs grew 5.6% year over year in March and 5.5% in April 2022.