November 2020 Health Sector Economic Indicators Briefs

Altarum's monthly Health Sector Economic Indicators (HSEI) briefs analyze the most recent data available on health sector spending, prices, employment, and utilization—helping to fill gaps in the official government data. Below are highlights from the November 2020 briefs:

National health spending continues slow recovery

• At $3.89 trillion (seasonally adjusted annual rate), national health spending in September 2020 was 1.0% higher than in September 2019.
• The September 2020 nominal gross domestic product (GDP) was 1.1% lower than in September 2019, and the resulting health-spending share of GDP was 18.2%, and 17.6 of PGDP.
• Spending in September 2020, year over year, declined in some major categories and grew in others. The greatest decline was in spending on dental services, at -13.1%. The greatest increase was in home health care, which grew by 6.7%

Health care price growth moderates for the majority of categories

• Overall health care prices in October 2020 are 2.1% higher than a year before, the slowest year over year growth rate of the past seven months and the same as the rate observed back in March.
• Slower price growth occurred for most of the largest health sector components, with hospital prices, physician prices, and prescription drug prices all slower in October when compared to the prior month. Annual prescription drug price growth was actually slightly negative this month at -0.4%.
• October health care price growth was also slower across all major payers compared to September, as all three of the individual Medicare, Medicaid, and Private Insurance overall health care price growth series slowed.
• Despite this month’s slowdown, average health care price growth for 2020 remains high. Including data through October, health care prices remain on track for the fastest total year over year growth since 2010.

Health care has regained nearly 1M jobs but still 3.6% below pre-COVID-19 level

• Health care added a solid 58,300 jobs in October, even as the pace of job recovery slows. Health care has regained nearly 1 million jobs, or 63% of the 1.58 million jobs lost in March and April. The level of health employment now stands at 3.6% below pre-COVID-19 (Feb) employment.
• October job gains were once again strong in ambulatory care settings, which added 50,700 jobs. These settings lost 1.33 million jobs in March and April but have regained 1.09 million, or 82% of jobs lost. Employment in ambulatory care settings is now at 3.1% below pre-COVID-19 levels. Jobs in dental offices, which fell by more than half, are back to 95% of the pre-COVID-19 level.
• Hospitals lost fewer jobs in the spring (161,000 jobs) but are having an uneven recovery. After adding 16,000 jobs in October, hospitals have regained 31% of jobs lost and are at 2.1% below the pre-COVID-19 peak.
• Nursing and residential care lost 8,600 jobs in October and is down 238,000 jobs since February.   
• The economy overall gained 638,000 jobs in October, comparable to last month, and has regained just over half (55%) of the 22.16 million jobs lost this spring. The unemployment rate fell from 7.9% to 6.9%.