ANN ARBOR — Health care prices rose nationally just 1.1 percent from April 2012 to April 2013, the lowest annual increase since 1997, and a sharp 0.5 percentage point drop from the rate of increase reported in March from a year earlier.

The 12-month moving average price increase, at 1.8 percent, is the lowest since 1.7 percent recorded in September 1998.

National health expenditures, which reflect both prices and utilization, grew 4.2 percent, remaining in the vicinity of the record low levels seen annually since 2009.

These data come from the June 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, may be viewed at

Meanwhile, health care employment extended its recent moderation with 11,000 new jobs in May 2013, about half the 24-month average of 23,000. Health sector job growth in the first 5 months of 2013 averaged 18,000 per month, compared to 28,000 per month during the same period in 2012, with most of the slowdown seen in hospitals. With total nonfarm jobs in May growing by a solid 175,000 jobs, the health sector share of total employment dropped slightly to 10.72 percent, off the revised all-time high of 10.73 percent seen in April 2013.

“Economy-wide disinflation continues to be reflected in lower health care price growth, and evidence is accumulating that 2013 will be a year of slower health sector job growth,” said Charles Roehrig, director of the center. “Recent media announcements of hospital intentions to shed jobs bolster this conclusion. With pressure from sequestration and a still underperforming economy, our research suggests health spending growth will also remain low for the remainder of 2013.”

The health spending share of GDP was 18.1 percent in March, stable from the 18 percent range it has exhibited since the recession ended in June 2009 (after spiking from the pre-recession 16.4 percent rate). Implicit per capita health care utilization averaged 1.4 percent growth over the last 12 months suggesting a small rebound from the exceptionally low, first quarter of 2012 results.

The Altarum Institute provides research and consulting to the health care industry. Altarum employs more than 400 people. Besides its Ann Arbor headquraters, it has offices in Washington, D.C.; Atlanta, Ga.; Portland, Maine; and San Antonio, Texas.

More at


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