Government Reports on Healthcare require a Closer Look

Last week, the Federal Government released agency reports that paint a perplexing picture for the health industry entering 2026:

Tuesday, The Bureau of Labor Statistics released the EMPLOYMENT COST INDEX SUMMARY noting “Compensation costs for civilian workers increased 0.7%, seasonally adjusted, for the 3-month period ending in December 2025 and 3.4% for the 12-month period ending December, 2025.” Closer look: it was +3.6% for hospitals and +3.2% for nursing homes.

Employment Cost Index Summary – 2025 Q04 Results

Wednesday, the Bureau of Labor Statistics released THE EMPLOYMENT SITUATION — JANUARY 2026: “Total nonfarm payroll employment rose by 130,000 in January, and the unemployment rate changed little at 4.3%… Job gains occurred in health care, social assistance, and construction, while federal government and financial activities lost jobs…Health care added 82,000 jobs in January, with gains in ambulatory health care services (+50,000), hospitals (+18,000), and nursing and residential care facilities (+13,000). Job growth in health care averaged 33,000 per month in 2025. Employment in social assistance increased by 42,000 in January, primarily in individual and family services (+38,000).” Closer look: the jobs report is based on employer sampling which is revised as subsequent surveys are added to the sample. Thus, data for any single month is at best only directionally accurate. Reliable federal data about the healthcare workforce remains a work in process.

Employment Situation Summary – 2026 M01 Results

Friday, BLS released the CONSUMER PRICE INDEX REPORT FOR JANUARY, 2026: “Consumer prices rose 2.4% in January from a year earlier down from 2.7% in December.” Core prices, which exclude volatile food and energy items, rose 2.5% from a year earlier vs. medical care commodities (+.3%), hospital services (+6.6%) and physician services (+2.1%). Closer look: prices for hospitals and physicians vary widely (by ownership, specialty, size and location) but differ in one respect: Medicare rates are used as a proxy for both, but rate setting for physicians disallows inflationary adjustments.   

Consumer Price Index February 13, 2026 https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm#

Taken together, they reflect the obvious: The healthcare economy is a big deal in the scheme of the overall economy and the nation’s monetary policy. The CBO’s revised projection shows it increasing from 18% of the GDP today to 20.3% by 2033.

But a closer look exposes worrisome signals in the reports:

• Increased housing costs are destabilizing lower-and-middle income household finances resulting in increased medical debt, delayed care and heightened sensitivity to healthcare affordability. It also has direct impact on the availability of the local workforce where home ownership or rental costs are out of reach.
• Hospital price increases used to offset escalating labor and supply chain costs are well-above other spending categories; some have healthy margins while others are struggling. Public perception about hospital finances is susceptible to misinformation and executive compensation is a lightning rod for detractors. Per a KFF report last week, hospitals accounted for a third of total health spending increases since 2023 but 40% of the total spending increase—higher than any other factor. That puts added pressure on hospitals to justify costs and account for prices.
• The healthcare workforce has become the backbone of the labor market: the majority of its expanded labor pool are skilled and unskilled hourly workers for whom competitive wages and benefits are key. Healthcare delivery is labor intense. Across all settings in healthcare, efforts to increase productivity via data-driven, technology-dependent process improvements have been made. But reimbursements by payers have punished improvements in productivity requiring more work for less money. The result: disenchantment about the future of the system is a tsunami in the healthcare workforce.

In every hospital, medical group nursing home and home care organization, pressure to attract and keep a viable workforce is mission critical. In some, the Human Resource function is effectively aligned with regulatory, clinical and technology changes, in some, compensation plans from executive to support are strategically designed to optimize short and long-term performance and ROI. In some, the Board Compensation committee is well-prepared to adjust policies as talent requirements change. In some, leaders and frontline teams show mutual respect and sincere appreciation. But many fall short.

These reports are public record. But their headline stats don’t tell a complete story. Every healthcare organization is obligated to do the rest.