The healthcare sector’s torrid growth appears to have slowed in 2017, with the latest numbers showing drops in growth of employment, prices and spending.
The most likely contributors to the slowdown in hiring and spending comes from uncertainty around future insurance coverage and a slowdown in coverage expansion following the early gains from the Affordable Care Act. according to Charles Roehrig, Ph.D., founding director of Altarum’s Center for Sustainable Health Spending.
“It appears that the growth in health services utilization is also slowing,” he said, noting that this ends a three-year streak with health spending above the 5% growth level.
Average monthly job growth in the healthcare sector has fallen from 32,000 positions in 2015 and 2016 to 22,000 positions in 2017, according to data (PDF) published by Altarum’s Center for Sustainable Health Spending. Both hospital and ambulatory care settings have been applying the brakes. That could be a troubling sign, given the nation’s increasing reliance on the healthcare sector to power the overall economy, per previous reporting by FierceHealthcare.
In terms of spending on healthcare, the seasonally adjusted annual rate of $3.49 trillion suggests an estimated growth rate of 4.9%, according to the company's report on spending (PDF). April numbers demonstrate increased spending across the board, and represented 18.3% of overall GDP in the month. Experts expect this slowdown to reverse itself after 2017, with some predicting healthcare spending growth that could eventually outstrip GDP growth, according to FierceHealthcare.
The pricing report (PDF) indicates healthcare prices also continued to rise in April. The 1.6% rise marks the lowest annual growth rate since June 2016. The slowdown appears to have been uneven across segments. Annual drug price growth was down to 3.1% from 7.0% last November, while physician and clinical services saw growth rates rise a tenth of a percentage point to 0.5%. Hospital prices grew 1.8% in April, up from 1.7% a year ago.