November 2021 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. Support for this work is provided by a grant from the Robert Wood Johnson Foundation. Below are highlights from the November 2021 briefs.

With high GDP growth, health spending stabilizes near 17.5% of GDP

• National health spending in September 2021 was 6.3% higher than in September 2020, reflecting the continued recovery from the effects of the COVID-19 pandemic.
• Since January 2020, before the pandemic-induced drop began, net growth in national health spending was 4.4% through September 2021. For the past 4 months, health spending has exceeded $4 trillion for the first time in history.
• For 5 months beginning in March 2021, health spending as a percent of GDP held steady at 17.6%, and now stands at 17.5%; it was 18.1% in February 2020, before the start of the pandemic.
• The magnitude of the drop and subsequent recovery in health spending continues to vary by category of spending, with spending on hospital care and home health care showing the greatest growth since January 2020, at 6.1% each, while the net change in spending on dental services lags the other categories, at -11.4%.

Health care price growth remains low amid some increases in utilization

• Growth in the overall Health Care Price Index (HCPI) remained at 2.0% this October, the same as the month prior, and just slightly below the 2021 year-over-year average of 2.1%.
• Year-over-year health care price growth was highest for physician and clinical services (3.3%) and hospital services (2.3%), and lowest for prescription drugs (-0.7%) and durable medical equipment (0.2%).
• Health care price growth remains lower than expected given continued elevated economywide inflation, as measured by both the consumer price index (CPI) and producer price index (PPI), which continued to set records at 6.2% and 8.6% respectively in October.
• Year-over-year growth in an implicit measure of health care utilization (spending growth minus changes in prices) was high for some health care components, increasing by 8.3% year-over-year for hospitals and 9.5% for “other” professional services in September, while remaining below average for physician services (1.3%) and dental services (2.9%) in the same month. 

Jobs in ambulatory care continue to grow amid strong economy-wide job growth  

• Health care gained 37,200 jobs in October (Exhibit 1), the strongest showing in 2021 so far. Revisions to August and September added another 27,000 jobs to the estimate of health employment.
• Most of the health care job growth in October was in ambulatory care settings, which added 32,300 jobs. After 20 months, employment in ambulatory care settings is now back to the pre-pandemic level (Exhibit 2), led by recovery and growth in dental offices, outpatient care centers, and medical and diagnostic labs.
• Hospitals gained a modest 1,100 jobs in October and remain 87,000 jobs, or 1.7% below Feb 2020 levels. Note that these figures represent employed staff and do not reflect contract agency or temporary workers, which industry reports indicate are increasingly being used to alleviate hospital workforce shortages.
• Nursing and residential care settings gained 3,800 jobs in October, but employment in these settings is still down more than 400,000 jobs, or 12%, since Feb 2020.
• The overall economy surpassed expectations by adding 531,000 jobs and measuring an upward revision of another 235,000 jobs through September. The unemployment rate fell to 4.6%.