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July Health Spending Growth up to 4.2 Percent but Moderate Trend Persists

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Altarum headquarters in Ann Arbor. Photo by Dwight Burdette via Wikimedia Commons.

Altarum headquarters in Ann Arbor. Photo by Dwight Burdette via Wikimedia Commons.

CBS Detroit (con't)

Affordable Care Act Updates: CBSDetroit.com/ACA

Health News & Information: CBSDetroit.com/Health

ANN ARBOR — National health expenditures in July 2012 grew by 4.2 percent relative to July 2011, up from the 3.9 percent growth rate observed in June, but still representing a historically moderate trend rate.

The 2012 average rate of growth in spending at 4.3 percent is down sharply from the estimated 2011 average of 5.2 percent, and is close to the record low growth of 3.9 percent recorded in 2010.

Health care prices in July 2012 were up 1.9 percent from July 2011, down fractionally from June. On a 12-month moving average basis, price growth is now lower than at any time since January 1999.

A rise in August of 17,000 health sector jobs represents the third month of gains below the 24-month average of 24,000. However, with total nonfarm payroll job growth registering a disappointing 96,000 for August, the health care share of total employment reached a new all-time high of 10.79 percent.

These data come from the September Health Sector Economic Indicators briefs released by Altarum Institute’s Center for Sustainable Health Spending. The briefs, covering health care spending, utilization, prices, and employment, are at www.altarum.org/healthindicators.

“Slightly higher health spending in July nevertheless continues the moderate growth experienced in 2012 and the second half of 2011,” said Charles Roehrig, director of the center. “If this trend persists for the remainder of 2012, it will signal a return to the historically low growth rates seen in 2009 and 2010. Also, with extremely low health price growth, any uptick in spending will require increases in utilization that seem unlikely in this environment.”

The health spending share of GDP was 18.1 percent in June 2012, below the all-time high of 18.3 percent in June 2011, but substantially higher than the 16.4 percent figure at the start of the recession in December 2007. Per capita health care utilization grew at 1.5 percent year over year in July, averaging 1.7 percent growth for the last 12 months and 1.6 percent growth over the last six months.

The Altarum Institute offers research and consulting in health care. It employs more than 400 at its Ann Arbor headquarters and offices in the Washington, D.C., area; Atlanta, Ga.; Portland, Maine; and San Antonio, Texas.

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