New Report Details Health Care Spending and Employment Trends in Virginia for 2022

In a new report, Altarum experts applied their Health Sector Economic Indicator (HSEI) framework in Virginia to official Centers for Medicare & Medicaid Services (CMS), state All-Payer Claims Database (APCD), and other state and federal data sources to assess trends in current Virginia health spending, enrollment, insurance premiums, and employment. This new report replicates prior analyses and incorporates new state-level data from the Commonwealth’s APCD and other public sources. This new report follows similar work published last year, incorporating an additional year’s worth of data to track findings through 2022.

State-level analyses of health care spending trends are useful to assist states in assessing how their health care expenses differ from national averages and what major drivers of health care costs are among their residents. Accurate, up-to-date data at the state level has become increasingly important given the ways the COVID-19 pandemic drastically affected the health economy in 2020 and beyond—when unprecedented shifts in health care utilization, spending, employment, and coverage occurred. As the health care sector returns to “a new normal,” understanding the current trajectories of health care spending, enrollment, premiums, and employment are critical to inform state policy and business decisions.

Major findings in this new report include:

• Total annual personal health care (PHC) spending in Virginia increased from a revised estimate of $78.6 billion in 2021 to $83.5 billion in 2022 (an increase of 6.3%). This is a continuation of the growth in 2021 after the decline in 2020.
• Total health spending as a percent of the state Gross Domestic Product for Virginia fell to an estimated 14.9% in 2022, the smallest share since 2011. The percentage of the economy going to health care in Virginia is well below the national average of 17.1%.
• Health spending per capita in Virginia in 2022 was about $1,800 lower than the national average, with all major spending categories lower than their national comparators. This $1,800 per capita health care spending gap between Virginia and the U.S. has increased from 2021, when it was $1,600 per person.
• Annual single and family premiums in Virginia have increased 24.2% and 21.8%, respectively, between 2015 and 2022, while combined premium and deductible totals have increased even faster (31.2% for single coverage and 26.2% for family coverage).
• Federal government financial assistance for the health care sector in Virginia declined substantially in 2022. After receiving $800 million in assistance in 2021, this support fell to $235 million in 2022.
• In the fourth quarter (Q4) of 2022, 389,000 individuals were employed by the health care sector in Virginia, about 11.5% of the total private sector employed population.
• As of Q4 2022, total health sector employment in Virginia was 4.7% above the beginning of 2019, with hospital employment up 3.0% and ambulatory employment up 10.4%. Nursing and residential employment remained below 2019 levels, down 6.6%.
• A tight labor market for health care workers continued in 2022 in Virginia, driving up the costs for providers. Average annual wages for healthcare practitioners (e.g., physicians, nurses, and technicians) were up 2.8% year over year in 2022, while annual wages for health care support roles (aides and assistants) were up 6.6%.

Other insights on Virginia’s health sector are available in the full report, including comparisons of the Commonwealth’s health sector to national trends and interpretations of these changes over time. Detailed data sources, methodologies, and assumptions are included in a report appendix. The authors would like to thank the Virginia Hospital and Healthcare Association for their support of this work and the Virginia Health Information organization for their assistance and for providing data from the All-Payer Claims Database.

Read the full report: Tracking Virginia’s 2022 Health Care Spending and Employment Trends