April 2019 Health Sector Economic Indicators Briefs

Economic Indicators | April 12, 2019

These monthly briefs analyze the most recent data available on health sector employment, spending, prices, and utilization—helping to fill gaps in the official government data.

Below are highlights from this month's reports:

Spending: Health spending is growing more slowly than the overall economy

  • At $3.72 trillion (seasonally adjusted annual rate), national health spending in January 2019 was 4.1% higher than it was in January 2018. Health spending growth was 1.5 percentage points lower than the growth in GDP.
  • January 2019 marks the 16th consecutive month in which year-over-year growth in health spending has been less than GDP growth.
  • For all of 2018, GDP growth exceeded national health spending growth by 0.7%. As a percent of GDP, health spending in January 2019 was 17.7%, equaling its lowest reading since September 2015. For all of 2018, health spending constituted 17.8% of GDP and has been at or below 18% of GDP since November 2016.
  • Spending in January 2019, year over year, increased in all major categories. Spending on nursing home care grew the fastest, at 7.6%. 
  • Moderate growth in hospital spending, which constitutes nearly a third of health spending, has been a major factor in restrained total health spending. Between January 2018 and January 2019, hospital spending grew by 2.9%, helping to keep overall health spending growth at 4.1%. In all of 2018, hospital spending grew by 3.7%, while overall health spending grew by 4.5%.​

Download the full spending brief.​

Labor: Blow-out month and quarter for health care hiring

  • Last month, we were wondering if the uptick in health care hiring that began in Q4 2018 was diminishing due to weak February data. To the contrary, this month’s report shows health care created 49,100 jobs in March (well above the 12-month average of 33,100), while revisions boosted February job creation to nearly 30,000.
  • The preliminary estimate for health care jobs created in Q1 2019 is now 120,000, the largest quarterly gain in the 30 years of our series.
  • Over the past 12 months, health care has added nearly 400,000 jobs, growing nearly a percentage point faster than non-health jobs, and pushing the health share of total jobs above the 10.8% mark, at 10.81% - a new all-time high.
  • All major health care settings – hospitals, ambulatory care, and nursing and residential care – contributed to the strong March job growth, with each setting adding a higher-than-average number of jobs.

Download the full labor brief

​Prices: Price growth very low due to prices for hospitals, physicians and drugs

  • Health care prices in March 2019 rose 1.2% above March 2018, its lowest growth rate since September 2017.
  • Year-over-year hospital price growth was 1.6%, down from 1.9% in February. Physician price growth fell from 0.7% in February to 0.5% in March. Drug price growth at -0.4% in March was up from -1.2% in February (the lowest growth since September 1972)!
  • To add more detail to the drug price story, we note that the 12-month moving average now stands at 0.9% growth. This is low, but not historically so since the rate was 0.6% in calendar year 2013.
  • We are nearing the record streak of health care prices growing more slowly than economy-wide prices (20 months). We may have already broken this record but data delays due to the partial government shutdown are getting in the way. This phenomenon – especially if it becomes the new normal – has massive consequences for the central aims of health care policy: reducing the cost burden and increasing coverage.

Download the full price brief

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