Healthcare prices increased in April by 3.4% year over year despite slowing inflation, representing the fastest overall healthcare price growth since December 2007. That’s according to Altarum’s monthly Health Sector Economics Index, released Thursday.
“Based on data from this month’s HSEI, nursing home and home healthcare continue to be two of the faster growing health spending categories right now. Nursing home care spending was up 11.6% year over year in March, and home healthcare spending was up 8.7%,” Corwin “Corey” Rhyan, MPP, Altarum research director of health economics and policy, told the McKnight’s Business Daily. “These spending increases have been a result of increases in both prices and utilization for these services,” he added.
Between mid-2020 and mid-2022, Rhyan said, nursing home spending growth in particular seemed to be “much slower” than spending growth for other healthcare services, such as hospital care, physician services and prescription drug spending. “However, in the past six months, nursing home spending growth has increased and begun to close the gap,” he said.
Month-over-month healthcare spending increased 0.4% between March and April, which the experts said implies an even faster annualized rate of 4.5% growth last month. Altarum noted that overall inflation slowed in April. Also, the overall consumer price index declined from 5% to 4.9%, and producer price index growth declined from 2.7% to 2.3%.
“Growth rates of [gross domestic product] and national health spending are converging,” the Altarum report noted. National health spending grew by 5.4% year over year, representing 17.3% of GDP.
Wage growth in nursing and residential care settings is higher than other healthcare settings, at 4.8% year over year in March.
Healthcare added approximately 40,000 jobs in April, which is on par with the pace set in the first quarter, Altarum noted. Just 8,800 of those jobs were in nursing and residential care facilities.
By contrast, more than 60% (24,200) of the healthcare jobs added were in ambulatory care settings. Hospitals added 6,600 jobs.
But there’s good news on the employment front for long-term care operators, Rhyan said.
“Despite still lagging behind in the overall jobs recovery since the pandemic, nursing home and residential care employment has grown faster (4.9%) than healthcare jobs overall (3.7%) over the past year,” he said.