Between May 2023 and May 2024, overall healthcare costs grew by 3.4%, the fastest increase seen since December 2007, according to Altarum’s monthly Health Sector Economic Indicators brief, released Wednesday.
Spending on nursing home care grew by 4.8% year over year, and spending for home healthcare grew by 2.5%.
“Growth rates for both nursing home care and home healthcare were significantly lower than a year ago, when May 2023 prices were 6.4% higher than the previous May for nursing home care and 4.4% higher for home healthcare,” Altarum Fellow and Senior Researcher George Miller told the McKnight’s Business Daily on Wednesday.
Altarum’s monthly HSEI briefs analyze the most recent data available on health sector spending, prices, employment and utilization. Support for the work is provided by a grant from the Robert Wood Johnson Foundation.
Personal healthcare spending
Personal healthcare spending (spending on health care goods and services) was 7.6% higher in April 2024 than in April 2023.
“Spending on home healthcare showed the fastest growth by far among major categories, at 14.2% year over year. Nursing home care spending was a distant second, at 8.3%,” Miller said. “The growth spurt in home healthcare spending is primarily attributed to utilization growth rather than price increases, with 11.7 percentage points of the 14.2% growth resulting from an increase in utilization.”
Healthcare employment
Employment in healthcare grew by 68,300 jobs last month, which was slightly more than the average of 65,200 per month in the past 12 months. Of those new jobs, 10,600 were in nursing and residential care facilities.
Nursing home jobs declined slightly from the previous month, Miller said. “Overall employment in nursing and residential care facilities remains 96,600 jobs (2.9%) below its pre-pandemic peak in February 2020,” he said.
Wage growth 3.3%
Year-over-year wage growth in the healthcare industry was 3.3% in April.
“Among the three major healthcare sectors, growth was greatest in nursing and residential care facilities, at 4.3%, followed by ambulatory care services (which includes home health care), at 3.3%, and hospitals, at 2.8%,” Miller said.
Wage data for May are not yet available.
