Overall health spending grows more slowly than GDP
A report from Altarum showed that national health spending is growing more slowly than GDP, with spending in March growing by 4.8% compared to year over year. For the first quarter of 2022, national health spending was 4.9% above the 2021 level and would have been 7.1% higher in the absence of government support.
In comparison, GDP in March was 9.7% higher than in March 2021. For the first quarter of this year, it was 10.6% higher than first quarter 2021.
According to the report, this difference in growth rates is partly attributable to the decline in federal government support via the Paycheck Protection Program, the Provider Relief Fund, and the Public Health and Social Services Emergency Fund. The slower health spending growth compared with GDP growth when government support is excluded is likely associated in part with the lingering effects of the pandemic, especially the recent surge associated with the Omicron variant. In addition, health care prices have shown relatively slow growth compared to overall inflation in recent months.
Physician and clinical services spending was $876.6 billion in March 2022, compared to $848.4 billion in March 2021, and $749.1 billion in March 2020.
The report also shows that health employment continues moderate growth, mostly in the ambulatory sector. Health care employment grew by 34,300 jobs in April 2022, with gains of 27,900 jobs in ambulatory care settings, 4,500 jobs in hospitals, and 1,900 jobs in nursing and residential care.
More than two years since the start of the pandemic, the level of health employment is 250,000 jobs (1.5%) below the pre-pandemic peak, while the distribution of jobs has continued to shift from inpatient and residential settings to ambulatory settings, according to the report.
Employment in ambulatory settings is now 246,000 jobs (3.1%) above where it was in February 2020, while hospital employment remains 93,000 jobs (1.8%) below February 2020 and nursing and residential care employment is down by 402,000 jobs (11.9% decline).
Wage data are consistent with a tight labor market overall and in health care in particular. Average hourly earnings in health care grew 7.3% year over year in March 2022 (the most recent industry-level data). Earnings across all private sector jobs grew 5.6% year over year in March and 5.5% in April 2022.