Health Care Price Growth at 20+ Year Low
<0> Altarum InstituteKen Schwartz, 571-733-5709 </0>
Health care prices grew 1.0 percent in May 2013 relative to May 2012, the lowest rate in our data series, which extends back to January 1990. The 12-month moving average, at 1.7 percent, is the lowest since the same reading was recorded in September 1998. National health expenditures, which combines prices and utilization, grew 4.2 percent in May, and revised data for the first quarter of 2013 put spending growth at 3.8 percent, below the record low levels seen annually since 2009.
Meanwhile, health care employment saw 20,000 new jobs in June 2013, moderately below the 24-month average of 23,000. Health sector job growth in the first 6 months of 2013 averaged 19,000 per month, compared with 25,000 per month during the same period in 2012, with much of the slowdown seen in hospitals. Total nonfarm jobs in June rose by a sizeable 195,000, which put the health sector share of total employment at 10.72 percent, off the revised all-time high of 10.73 percent first seen in December 2012.
These data come from the monthly briefs released by Altarum Institute’s Center for Sustainable Health Spending. The briefs, covering health care spending, utilization, prices, and employment, are at .
“Record low health care price growth is the major takeaway this month,” said Charles Roehrig, director of the Center. “But within this low overall rate is an increase in hospital prices for private-pay patients, with a growing differential between these prices and those charged to Medicare and Medicaid patients.”
At $2.90 trillion, the health spending share of the GDP was 18.1 percent in April, oscillating near 18 percent it has shown since the recession ended in June 2009. Price growth for physician services is zero and is negative for home health, prescription drugs, and both durable equipment and non-durable products.