June 2021 Health Sector Economic Indicator Briefs


https://altarum.org/publications/june-2021-health-sector-economic-indicator-briefs

Altarum

Economic Indicators | June 17, 2021

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 June 2021 briefs

National health spending growth reflects rebound from COVID-19

  • National health spending in April 2021 was 32.4% higher than in April 2020, reflecting the recovery from the lowest month in spending since the start of the COVID-19 pandemic.
  • Since January 2020, before the pandemic-induced drop began, net growth in national health spending was 1.5% through April 2021.
  • The magnitude of the drop and subsequent recovery has varied by category of spending, with only spending on home health care, prescription drugs, and hospital care reaching levels in April 2021 that exceeded their January 2020 levels.
  • The recovery in spending on dental services continues to lag all other categories, remaining 14.6% below its January 2020 level.

Health care price growth remains stable amid economywide inflation

  • Growth in the overall Health Care Price Index (HCPI) remained mostly steady in May, with prices 2.0% higher than they were a year ago, compared to the 1.9% growth seen in April. The 2.0% rate is below the average since the start of the COVID-19 pandemic, indicating a slight moderation in health care prices.
  • Hospital and physician services prices continue to be the two fastest growing major categories, increasing 3.6% and 3.1% year over year respectively, while nursing home facility and home health care price growth has slowed significantly over the past few months, now up only 2.1% and 1.5% respectively in May.
  • Outside of health care, economywide price growth, as measured by both the consumer price index (CPI) and producer price index (PPI), continued to accelerate, with those measures increasing to 5.0% and 6.6% growth in May. This is the fastest growth for economywide CPI since 2008 and the fastest ever in the series for PPI.
  • As expected, the GDP Deflator (GDPD), which lags a month behind other price data, was significantly higher in April at 3.7%, marking the first time it exceeded health care price growth since September 2019.

Health employment up modestly in May, returning to the December 2020 level

  • Health care added a modest 22,500 jobs in May, mostly in ambulatory care settings. Revisions to March and April took health care jobs up slightly but did not significantly change the story.
  • Health care employment has slowly regained the 80,000 jobs dropped in January 2021 and is now at the level it was at the end of 2020 (15.98 million jobs). The sector remains about 500,000 jobs, or 3.1%, below where it was in February 2020, with a big part of the drop in residential care settings. Additionally, neither hospitals nor ambulatory settings (as a whole) are fully back to pre-pandemic employment.
  • After dropping 35,000 jobs in January 2021, hospital employment has been little changed, with job losses and gains of a few thousand jobs per month in February through May 2021. Hospital employment is 28,000 jobs below where it stood at the end of 2020 and 90,000 jobs, or 1.7%, below the pre-pandemic peak.
  • Nursing and residential care employment continued to fall in May, losing 2,400 jobs. Residential care settings are down 340,000 jobs, or 12.7%, since February 2020, losing jobs in all but one month over that period.
  • The economy added 559,000 jobs and the unemployment rate fell to 5.8%. We have added 2.4 million jobs so far in 2021 but remain 7.6 million jobs (5%) below the level of employment in February 2020.

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