Healthcare cost rates grew by 2.8% year over year in April, down from the growth rate of 3.1% seen the previous month.
The growth rate in the cost of nursing home care outpaced the cost growth rate in the rest of the sector, with a year-over-year growth rate increase of 4.5%, according to Altarum’s monthly Health Sector Economic Indicators brief, released Wednesday. Rates for home healthcare grew by 2.5% for the same period, slightly more slowly than the overall rate.
“Both growth rates were significantly lower than a year ago, when April 2023 prices grew by 6.5% for nursing home care and by 4.4% for home healthcare, year over year,” Altarum Fellow and Senior Researcher George Miller told the McKnight’s Business Daily on Wednesday.
Personal healthcare spending (spending on healthcare goods and services) was 7.3% higher in March than in March 2023.
“The growth in spending on nursing home care was slightly below this overall rate, at 7.1%, while home healthcare spending grew at the slowest rate among major categories, at 6.4%,” pending on hospital care grew the fastest, at 7.9%,” Miller noted.
Insurance rate growth
The Medicaid rate growth exceeded that of other payers in the first four months of the year, according to the brief. The Medicaid growth rate was 6.3%, compared with the growth rate in private insurance of 3.2% and the growth rate of 1.7% seen in the US government’s Medicare program.
Jobs growth
Concerning job growth, Altarum said that “healthcare continued posting large job figures during a cool month for the economy in April.”
In April, the healthcare industry added 56,200 jobs, according to the brief, which accounted for 32% of all jobs across the economy. Nursing facilities and residential care facilities added 9,300 jobs, divided between 3,700 jobs in nursing care facilities and 5,600 jobs in other nursing and residential care facilities. Home healthcare services added 13,900 jobs in April, somewhat above the monthly average of 11,400 jobs over the past year.
Overall, healthcare added 56,200 jobs in April, below the 12-month average of 63,700.
“These numbers are all below the monthly averages for the past year, when nursing care facilities averaged 5,400 new jobs per month and other nursing and residential care facilities averaged 7,100, for a monthly total averaging 12,500,” Miller said.
Additionally, he said, “In spite of steady growth since January 2022, employment in nursing care facilities remains 120,400 jobs below the pre-pandemic level reached in February 2020.”
Wage growth
Nominal healthcare wage growth in March was 3.3% year over year compared with 4.2% in non-healthcare industries, according to HSEI. Nominal wage growth in healthcare settings was highest in nursing facilities and residential care facilities, at 4.5% year over year, followed by ambulatory healthcare services at 3.2% and hospitals at 3.1%.
Wage data for April are not yet available.
