October 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 October 2020 briefs:

National health spending recovers to August 2019 level

• National health spending in August 2020 has recovered to August 2019 levels (meaning that there has been no net growth in health spending in the past year).
• As a percent of GDP, health spending in August reached an all-time high of 18.2%, primarily because health spending has recovered more quickly than GDP.
• Recovery rates vary significantly among components. At the extremes, spending on home health care is 7.0% higher than in August 2019, while spending on dental services remains 18.3% below its August 2019 level.

​Accelerated health care price growth continues for another month

• Health care prices in September rose 2.7% from the previous year, keeping 2020 on pace for the fastest year of health sector price growth since 2010.
• Public payer price increases appear to be a major contributor, with Medicare and Medicaid health care price growth continuing to outpace private insurance price growth since May 2020. We believe the public sector price growth is in part driven by government responses to the pandemic, including temporary increases in reimbursement rates to help cushion drops in utilization for providers.

Health care job rebound is leveling off at about 4 percent below pre-Covid-19 level

• Health care has regained 58% of the jobs lost this spring, but the jobs recovery is slowing.
• Health care employment is 4.2% below the pre-Covid-19 level, with ambulatory care 4.1% smaller, hospitals 2.5% smaller, and nursing and residential care 7.3% smaller.
• Ambulatory settings are still adding jobs, but hospital employment dropped a bit in September and nursing homes continue a long pattern of job losses.