Employment in the U.S. healthcare industry has dropped by 44,000 jobs over the course of the first quarter of 2021, according to reports from nonprofit healthcare research and consulting group Altarum.
These job losses came alongside continued spending growth recovery and increases in overall healthcare prices.
Modest employment gains in February and March were unable to offset January’s substantial decline of 80,000 healthcare jobs.
Many of these losses were felt among hospitals, which lost 37,000 jobs in the first quarter, and nursing and residential care, which dropped 38,000 jobs. On the other hand, ambulatory care settings picked up 37,000 new jobs in the first three months of the year.
Overall, the healthcare industry has lost a total of 557,000 jobs since February 2020’s pre-COVID-19 peak, a 3.1% decline. This number represents 7% of the total economy’s 8.4 million lost jobs, which Altarum noted was not the case during other recent recessions.
“The declines in employment in parts of health care in 2021 are noteworthy given how consistently health sector jobs grew prior to 2020,” the organization wrote. “Of course, with 15.9 million jobs in healthcare, 44,000 jobs lost in Q1 2021 represents a decline of only one-third of 1%.”
National health spending has worked its way back from a major fall during the spring and early summer of 2020, the organization wrote.
In February, the industry hit the same $3.9 trillion in total spend it’d reached in a year prior. Year-over-year growth has averaged a hair above 0% since July 2020; however, spending growth from August through February was 3.5%, on par with the 3.4% growth seen during the same period last year.
“Because spending was growing in the year before the start of the pandemic, the near-zero year-over-year growth rates in recent months indicate that recent spending growth has been similar to pre-pandemic rates,” Altarum wrote.
Healthcare prices continue the pandemic trend of higher-than-usual increases, the organization noted. The Health Care Price Index rose 2.5% year over year in March, slightly slower than February’s 2.6% annual growth.
The increases were led by hospital care price growth of 4.8% year over year—the fastest growth Altarum said it’s seen among hospitals since June 2004. On the other hand, retail prescription drugs saw their sixth straight month of price declines, recording a 2.3% year-over-year drop in March. These were joined by durable medical equipment (-2.4%) and other nondurable medical products (-2.1%).
Altarum framed healthcare’s price increases alongside similar price acceleration across the broader economy. It said that macro trends such as federal stimulus funds, lifting state economic restrictions and COVID-19 vaccinations “may be expected to continue into the summer and provide a tailwind for higher health sector prices in the near future.”
Altarum’s reports coincide with others that suggest physicians’ full-time salaries are beginning to rebound in the wake of substantial pandemic volatilities that included fewer hours or complete halts in monthly income.
Deloitte recently predicted healthcare spending to hit $8.3 trillion by 2040. The consulting firm’s long-term outlook was well below the federal government’s estimate, a discrepancy Deloitte attributed to earlier disease detection and the increasing role of the consumer in seeking appropriate care.