Job growth in healthcare has plateaued over the past several quarters after rising steadily since 2014, according to a new report.
In Altarum Institute's second-quarter report on trends in the health sector, researchers found job growth in the second quarter of 2018 stabilized at 2%. That's about where it has been since mid-2017 after making a big jump between 2014 and 2015.
Job growth increased from 1% at the beginning of 2014 to 2.7% in late 2015 through early 2016, according to the report.
“I think that we saw health job growth accelerate ... in response to expanded coverage under the Affordable Care Act,” Ani Turner, Altarum’s co-director for sustainable health spending strategies and the report’s author, told FierceHealthcare. “More coverage meant both more people needing services and more people being able to pay for services,” Turner said.
It took several months for job growth to ramp up following full implementation of the ACA in 2013 since it took time for patients to adjust to having coverage and using available services, she said.
Now that job growth has stabilized, Turner said, it’s likely to stay that way in the healthcare sector until the next disrupter, like the ACA’s Medicaid expansions come along.
Health spending still unsustainable
In addition to tracking job growth, the report also dives into trends in spending, price growth and enrollment across public and private payers. Healthcare spending grew by 4.6% over the first two quarters of this year, on par with 2017 and 2016 but down notably from a 5.8% peak in 2015.
Though spending growth has slowed, Turner said that the current rate is still unsustainable, especially for long-term federal budget planning. As more baby boomers age into the Medicare program, it will create “more and more and more painful choices” to pay for their needs, including possible tax hikes or significant cuts to other government programs.
“The sooner we face it, the easier it will be ... especially because interest rates are likely to be moving up in the next few years,” Turner said.
Healthcare prices grew by 2% in the second quarter of 2018, a rate below that of inflation. Price growth hasn’t topped 2% since 2012, which may seem at odds with the current political focus on driving down the price of drugs and services.
But, Turner said, prices for specific products such as a certain test or medication don’t necessarily reflect what the consumer can expect to pay, as they’re often on the hook for a bevy of different services. Plus, patients are being exposed to more costs upfront then ever before, she said.
In addition, a slow rate of growth doesn’t mean that prices weren’t high already, Turner said.
Overall, the trends report highlights stability—but that doesn’t mean policymakers and other stakeholders should be complacent, Turner said.
“We seem to be, for the time being, at a pretty stable point,” she said. “It doesn’t mean that we ought to be kind of looking the other way or turning our attention away, and not continuing to put the pressure on reducing the resources going to healthcare."