Health spending up by 5.7%
ANN ARBOR, Mich. — Preliminary estimates indicate that national health spending grew by 5.7% in January 2015 compared with January 2014, according to the latest monthly Health Sector Economic Indicator briefs released by Altarum's Center for Sustainable Health Spending. Spending on prescription drugs continued its double-digit growth at 11.6%. Growth for all of 2014 is now estimated at 5% with a pattern of acceleration over the year.
“The Quarterly Services Survey released on March 11 shows a steady acceleration in spending on healthcare services across the four quarters of 2014,” stated Charles Roehrig, director of the center. “This mirrors the acceleration in healthcare services employment seen in 2014. Our March 25 Health Sector Trends Report will explicitly incorporate the new QSS data to provide a complete picture of health spending for 2014.”
The health-spending share of gross domestic product was 17.9% in December, up from 16% at the start of the recession in December 2007. This represents an all-time high share of the economy devoted to the health sector.
Healthcare prices in January 2015 were 1.2% higher than in January 2014, dramatically lower than the December year-over-year change of 1.8%. Year-over-year hospital prices fell 0.1% in January, far below the December gain of 0.9% and the only recorded fall in prices since this series began in 1992. Physician and clinical services prices were flat, after rising 0.6% in December. Prescription drug prices rose 5.6%, down slightly from the December figure of 6.4% but above the 4% growth of the previous months.
The health sector added 23,800 new jobs in February 2015, below the average growth seen in the fourth quarter of 2014 (39,000) and the January 2015 level (40,000). Job growth remained solid in hospitals (8,700 jobs) and offices of physicians (7,300), but there were moderate losses in nursing and residential care (minus 4,800). The health share of total employment remained at 10.6%, below the all-time high of 10.7% last seen in December 2012. With the 2014 acceleration, health job growth has now caught up to nonhealth growth at 2.4% year-over-year.