Spending on healthcare goods and services grew by 8.3% between May 2023 and May 2024, according to the latest monthly Health Sector Economics brief from Altarum, released Thursday.
“Spending on home healthcare showed the fastest growth by far among major categories, at 22.6% year over year. Nursing home care spending was a distant second, at 9.5% year-over-year growth,” George Miller, Altarum fellow and senior researcher, told the McKnight’s Business Daily on Thursday.
“The substantial growth in home healthcare spending was almost entirely due to utilization growth rather than price increases, with 20.1 percentage points of the 22.6% growth resulting from an increase in utilization,” Miller said Thursday.
The slowest spending growth among major categories in the month of May occurred in physician and clinical services, at 6.6%.
According to Miller, the growth in home healthcare spending “was the largest since the spring of 2020, when government subsidies to combat the pandemic caused a major jump in spending. Before the pandemic, the most recent growth rate in home healthcare that exceeded the May 2024 rate was in January 1993, at 24.1%. This rate was also high for all of 1992, totaling 23.5% for the entire year.”
In June, healthcare costs were 3.3% higher than in June 2023. Among major spending categories, the overall growth rate was led by prices for dental care (5.3%) and nursing home care (4.6%). Home healthcare prices grew at the more modest rate of 2.5%. In the previous year, according to Miller, nursing home and healthcare costs grew at “somewhat higher rates.” Between June 2022 and June 2023 nursing home care prices grew by 6.1%, while home healthcare prices grew by 4.6%.
Altarum’s monthly HSEI briefs analyze the most recent data available on health sector spending, prices, employment and use. Support for the work is provided by a grant from the Robert Wood Johnson Foundation.
Healthcare employment
The data show that employment in healthcare grew by 48,600 in June, which was well below the average of 63,100 in the past 12 months, according to the brief. Of those 48,600 jobs added, 4,900 were in nursing and residential care facilities.
“Overall employment in nursing and residential care facilities remains 2.8% below its pre-pandemic peak in February 2020,” Miller said. “Employment in home healthcare fell by 3,500 jobs in June.”
Wage growth 3.5%
In May, nursing and residential care facilities saw the greatest year-over-year was growth among the health segments at 4.5%. Industrywide, year-over-year wage growth was 3.5%. Wages for ambulatory healthcare services, which Miller said includes home healthcare, grew by 3.8%. Hospital wage growth lagged behind the other segments at 2.8%.
