Year-over-year growth in national health spending in June was highest “by far” for home healthcare, at 20.9%, compared with other major healthcare categories, according to a brief issued late Tuesday by Altarum.
Most of the growth, 18.5 percentage points, was due to changes in utilization rather than price, George Miller, PhD, Altarum fellow and research team leader, told the McKnight’s Business Daily.
“Nursing home care spending was a distant second, at 10.0% year-over-year growth,” Miller said. By comparison, year-over-year spending growth was 8.3% for prescription drugs, 8.2% for hospital care, 7.3% for dental services and 6.6% for physician and clinical services, according to the report.
Overall, spending on healthcare goods and services grew by 8.1% between June 2023 and June 2024, with utilization growth continuing to outpace price growth.
Nursing home spending, at $231.3 billion, represented 5% of health spending in June, and home healthcare spending, at $165.8 billion, accounted for 3%, according to Altarum estimates.
The spending-related brief was one of three issued by Altarum on Tuesday, with other briefs focused on healthcare prices and healthcare labor.
Home healthcare also saw “continued rapid” year-over-year growth in utilization and, for June, growth in employment, Miller said.
Whereas home healthcare saw the fastest-growing utilization of all of the major categories in June year over year, that was followed by prescription drug utilization, at 5.9%, and nursing care facility and continuing care retirement community utilization, at 5.2%, according to Altarum’s price-related brief.
Prices, meanwhile, were the fastest-growing for dental care (5.0%) and nursing home care (4.6%).
“Home healthcare prices grew at the more modest rate of 2.1%,” Miller said, noting that “in the previous year, prices for both nursing home care and home healthcare grew at somewhat higher rates.” Between July 2022 and July 2023, he noted, nursing home care prices had grown by 5.6%, whereas home healthcare prices grew by 5.1% in that time.
Overall in July, healthcare prices were 2.9% higher than in July 2023 and have continued to rise faster than economywide inflation, Miller said.
When it comes to the workforce, the home healthcare workforce grew by 21.6% from July 2023 to July 2024, according to the Altarum labor-related brief. Employment in home healthcare grew by 21,600 jobs in July.
“Employment in healthcare grew by 55,000 in July 2024, which was nearly half of all jobs, 114,000, added across the economy,” Miller noted. “Nursing and residential care employment grew by 9,200. Of these 9,200 new jobs, 6,800 were in nursing care facilities, with the remaining 2,400 in other nursing and residential care facilities.”
Overall employment in nursing and residential care facilities remains 2.5% below its pre-pandemic peak in February 2020, he said.
Regarding wage growth, in June 2024, year-over-year wage growth in the healthcare industry was 3.6%, led by 4.6% growth in nursing and residential care facilities, according to Altarum.
“Wages for ambulatory healthcare services, which includes home healthcare, grew by 3.8%,” Miller said. By comparison, he noted, hospital wage growth trailed at 3.0%.
