Nursing homes, home care fast-growing healthcare spending categories
Healthcare prices rose 3.4% year-on-year in April despite slowing inflation, marking the fastest overall healthcare price growth since December 2007. That’s according to Altarum’s monthly health sector economy index, released Thursday.
“Based on this month’s HSEI data, nursing homes and home health care continue to be two of the fastest growing healthcare spending categories right now. Care spending nursing homes increased 11.6% year-over-year in March, and home health care spending increased 8.7%,” said Corwin “Corey” Rhyan, MPP, Altarum’s research director in health economics and policy, told McKnight’s Business Daily “These spending increases are the result of increases in prices and usage of these services,” he added.
Between the middle of 2020 and the middle of 2022, said Rhyan, the growth in nursing home spending in particular appeared to be “much slower” than the growth in spending on other health services, such as hospital care. , medical services and prescription drug expenditures. “However, over the past six months, care home spending growth has picked up and started to close the gap,” he said.
Month-over-month healthcare spending rose 0.4% between March and April, which experts say implies an even faster annualized growth rate of 4.5% last month. Altarum noted that headline inflation slowed in April. In addition, the overall consumer price index decreased from 5% to 4.9%, and the growth of the producer price index decreased from 2.7% to 2.3%.
“The growth rates of [gross domestic product] and national health spending are converging,” the Altarum report notes. National health expenditure increased by 5.4% year-on-year, representing 17.3% of GDP.
Wage growth in nursing and residential care facilities outpaced that of other health care facilities, at 4.8% year-over-year in March.
Health care added about 40,000 jobs in April, comparable to the pace set in the first quarter, Altarum noted. Only 8,800 of those jobs were in nursing and residential care facilities.
In contrast, more than 60% (24,200) of the health care jobs added were in ambulatory care facilities. Hospitals added 6,600 jobs.
But there’s good news on the jobs front for long-term care operators, Rhyan said.
“Although still lagging behind in the overall employment recovery since the pandemic, employment in nursing homes and residential care grew faster (4.9%) than overall. jobs in the health sector (3.7%) over the past year,” he said.