Healthcare prices, costs steady as jobs grow

Healthcare spending and pricing continued to creep along at historic lows during the month of September, according to new data from the Altarum Institute.

Spending grew only 3.7 percent compared to September 2011. The growth was actually a full percentage point lower than the GDP growth as a whole during the same period, Altarum noted. Over the previous five months, the average growth rate has remained at the 3.7 percent rate.

Healthcare spending as a proportion of gross domestic product stood at 17.9 percent in September, below the record 18.3 percent in June 2011, but still higher than the 16.4 percent figure at the start of the Great Recession almost five years ago.

Meanwhile, healthcare pricing rose only 1.9 percent in September compared to the prior year--the slowest rate of increase since 1998.

Hospital prices rose at an annual rate of 2.4 percent during September, down from 3.6 percent in August. Physician and clinical services rose less than 1 percent.

According to Altarum, healthcare prices as a whole have risen 11.5 percent since the start of the Great Recession, while prices for the overall economy have jumped 8.4 percent.

And while prices and spending have stayed relatively flat, job growth has been on the rise. The industry saw a total of 31,000 new jobs created in October. Combined with September job figures, growth averaged 34,000 a month, up from the summertime average of 25,000.

"As President Barack Obama prepares for his second term and the extraordinarily difficult fiscal challenges that loom, some solace can be taken from the continued slow growth in health spending." Altarum Director Charles Roehrig said Thursday in a statement.

"But even this very low rate of growth, which is aided by low general inflation, may not be sustainable over the long term. Solving our fiscal crisis will require a historically low cost trend in healthcare even if we move to record high tax revenues and record low federal spending for defense and other non-health items," he said.

To learn more:
- read the Altarum Institute data
- here's the Altarum Institute statement

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