September Health Spending and Price Growth Near Record Lows
ANN ARBOR — National health expenditures in September 2012 grew by 3.7 percent relative to September 2011, ticking down a tenth from the August rate, and representing the fifth consecutive month of below 4 percent growth. At 4 percent, the average monthly rate of growth in spending, year-to-date is barely above the all-time low rate of 3.8 percent recorded in 2009.
Health care prices in September 2012 were only 1.9 percent above September 2011, the lowest increase in more than 14 years. Hospital price growth dropped to 2.4 percent in September after an unusual spike in August.
The latest health employment data show 31,000 health sector jobs added in October 2012, which combined with a revised total of 37,000 new jobs in September, produce an average growth of 34,000 for the two most recent months, well above the 24-month average of 25,000.
These data come from the October 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.
“As President Barack Obama prepares for his second term and the extraordinarily difficult fiscal challenges that loom, some solace can be taken from the continued slow growth in health spending,” said Charles Roehrig, director of the center. “But even this very low rate of growth, which is aided by low general inflation, may not be sustainable over the long term. Solving our fiscal crisis will require a historically low cost trend in health care even if we move to record high tax revenues and record low federal spending for defense and other non-health items.”
The health spending share of gross domestic product fell to 17.9 percent in September 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 averaged 1.3 percent growth over the last 12 months with signs of continuing downward pressure on physician visits.
Altarum provides research and consulting in health care, and employs more than 400 people at offices in Ann Arbor, Washington, D.C., Atlanta, Ga., Portland, Maine and San Antonio, Texas.