Healthcare spending up, but so are jobs

Healthcare prices are on the rise again, but so are the number of people employed in the sector.

That's the conclusion of the most recent report by the Altarum Institute's Center for Sustainable Health Spending.

Healthcare prices rose 1.8 percent during the month of May, significantly higher than the 12-month moving average of 1.3 percent, according to Altarum. Hospital prices grew 2.1 percent during the month, while pharmaceutical spending rose 3.6 percent. However, physician and home healthcare prices both grew less than 1 percent.

The overall rise in prices had been forecast by a variety of healthcare economists, particularly after the implementation of the Affordable Care late last year led to millions more Americans having steady health insurance. Another recent Altarum report indicated spending grew by 7.7 percent in March. But whether such increases will become consistent remains to be seen.

Healthcare spending is currently growing at a 4 percent annual rate--much slower than the March figure--while utilization of services is growing 2.2 percent per year. Hospital utilization is currently growing at a 2.1 percent rate.

"The rise in healthcare prices and employment during the second quarter suggests that spending will rebound," said Charles Roehrig, director of the center, in an announcement. "However, we are still not detecting signs of the increases in utilization expected from expanded coverage under the Affordable Care Act and suspect the effect may be more incremental and gradual than first expected."

Meanwhile, jobs in the healthcare sector grew by 21,000 in June, a far greater clip than in past months, according to Altarum. In the first half of the year, jobs only grew by a net of 2,500 a month on average. Most of the positions were in ambulatory care, which added 13,100 jobs. Hospitals added just 2,200 jobs overall.

But over the past year, job growth in healthcare has been relatively anemic. The sector added a total of 225,100, a 1.6 percent increase. By contrast, the overall non-healthcare U.S. labor market grew by 1.9 percent.

To learn more:
- read the Altarum Institute announcement
- here's the spending report (.pdf)
- check out the labor report (.pdf)

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