Spending on healthcare services moderated during the first quarter of 2016 compared to last year, while prices rose slightly and robust job growth remained steady, according to new data from Altarum Institute's Center for Sustainable Health Spending.
Altogether, healthcare spending rose 4.7 percent during the first quarter compared to a year ago. That is significantly below the 5.8 percent increase reported for all of 2015. The trend tends to squelch concerns raised last year that spending was on a long-term rising trend.
The biggest growth area for spending remained prescription drugs. It grew at a 7.1 percent clip during the quarter. However, that is also significantly lower than the 9.5 percent growth rate for 2015.
Spending on hepatitis C drugs totaled only $2.2 billion for the quarter, compared to $13.5 billion for all of 2015, according to Altarum. Based on that trend alone, drug spending would drop by 1.5 percent for the year.
Meanwhile, prices increased at a 1.6 percent rate for the first quarter, up from 1.1 percent for all of 2015. Payment for services led the way, with a 1.3 percent increase, nearly double the 0.7 percent clip for 2015. Drug prices grew 3.3 percent, down from the 4.6 percent rate reported last year.
For the first four months of 2016, the healthcare sector generated an average of 40,000 new jobs, down from the rate of 45,000 per month experienced during the first half of last year, but still quite healthy.
"We have been expecting health job growth to slow, given current estimates of moderation in the growth in spending on healthcare services. Yet each time we see signs of slowing momentum, health job growth bounces back, especially in hospitals," Charles Roehrig, founding director of the Center, said in a statement.
Strong healthcare hiring, particularly at the hospital level, has been mostly unabated for much of the past year.