Economy graph: green rising arrow and dollar bills.
Corwin Rhyan headshot
Corwin (Corey) Rhyan

Nursing home spending has increased 10.2% year over year; home healthcare, by 10.5%. That’s nearly double the overall national health spending rate, which grew in August 2022 by 4.9%, year over year.
Those numbers are according to Altarum’s monthly Health Sector Economic Indicators (HSEI) brief released Friday.

“We’re  seeing over the last three or four months a pretty significant recovery [from pandemic declines] in increase in both nursing home care and home healthcare settings,” Corwin (Corey) Rhyan, MPP, research director of Health Economics and Policy at Altarum, told the McKnight’s Business Daily.

“We are definitely seeing more growth among these two basic categories over the mid-2022 period,” he added. “The last three or four months is when we really started to see accelerations in those settings.”

Overall, healthcare spending reached a seasonally adjusted annual rate of $4.49 trillion, which the analysts estimate accounts for roughly 17.4% of the nation’s gross national product. This is the lowest share since June 2015, according to the brief. 

“This is coming out of a period when spending in nursing homes and home healthcare was slow and even declining, so it makes sense that we’re seeing an acceleration,” Rhyan said.

According to the experts, the health spending share of GDP has been on the decline this year especially, largely because of record high inflation. The health spending share was estimated to make up 18.4% of GDP in December 2021.

The overall healthcare price index (2.8%) rose above 2.5% for the fourth straight month, keeping pace with the average price in 2021. Negative Medicare price growth is offsetting private payer price growth, which is helping to keep healthcare inflation under control. Private prices for health services increased 3.5% year over year in September, while Medicaid prices increased by 3.9%, and Medicare prices dropped by 0.8%.

Rhyan said that HSEI didn’t break out long-term care in that particular analysis, but he said  that he would expect that trends in nursing homes and home healthcare settings would be consistent with the general trends.