Healthcare spending up, but prices, job growth remain relatively flat

Spending on healthcare services in the United States grew at a 4.8 percent annual pace in June, about the same as May, but significantly higher than at the same periods in 2013 and 2012. However, hospital spending was far lower than that brisk pace, according to data from the Altarum Institute's Center for Sustainable Health Spending.

Altogether, healthcare spending was 0.9 percent higher than the rate of growth for the entire U.S. gross domestic product. In June 2013, its annual growth rate was 4.3 percent, and in June 2012, it was 3.3 percent.

However, hospital spending grew at just a 2.5 percent annual rate in June, down sharply from the 3.8 percent rate in June 2013 and the 4.5 percent rate in June 2012. Much of the spending growth appeared to come from prescription drugs, where spending was up 11.9 percent, and program administration and the net cost of private health insurance, where spending was up 11.6 percent.

Pricing trends were also relatively low, Altarum reported, gaining 1.7 percent overall compared to June 2013. Hospital prices rose 1.9 percent. Prescription drugs had the biggest gain, 4.1 percent compared to June of last year.

The third report showed jobs growth was flat, with the sector gaining 7,000 jobs in July, well below the running two-year average monthly increase of 18,600 jobs. Hospitals and nursing and residential care facilities lost more than 7,000 jobs apiece, while ambulatory care centers added 21,300 jobs.

Hospital job growth has been stagnant for a significant period of time--Altarum reported no job growth at all in 2013.

"Publicly traded healthcare systems are generally reporting second quarter increases in revenues and utilization that we have been expecting due to expanded coverage under the Affordable Care Act." said Charles Roehrig, director of the Center for Sustainable Health Spending, in a statement. "However, this seems to be happening without any corresponding increase in healthcare jobs."

To learn more:
- read the Altarum statement
- check out the Altarum spending report (.pdf)
- here's the Altarum jobs report (.pdf)
- read the Altarum price report (.pdf)

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