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Latest Altarum Institute Health Spending Briefs

By March 23, 2022Commentary

The Altarum Institute puts out regular briefs on health spending, health prices, utilization and health care hiring.  The latests briefs have been released, covering the period through January.  Health care has experienced spending growth, and price growth, which generally has been above the trend for non-healthcare spending over the last decade.  But the epidemic and the burst of federal and state government health spending in response to the epidemic have created some strange patterns.  One oddity is that right now health spending growth is actually behind GDP growth.  In January 2022, year-over-year growth was 4%, but spending in January was lower than in December.  GDP growth was 10% as the epidemic bounce-back continued.  And health spending as a proportion of GDP dipped to under 18%.  If you exclude government spending, the growth was slower.  Even more startling, health care price growth was 2.1% year-over-year, while general inflation was almost 8%.  Over half of all health spending is in government programs, which dictate price, subject to political pressures.  And most commerical contracts with providers run on an annual basis.  It is likely that both the government programs and commercial payers will face pressure to raise prices substantially in 2022 and for 2023.  Adding to those pricing pressures will be continued hiring by health care companies and demands for wage increases by workers.  Utilization rose about 4% year-over-year.      (Altarum Briefs)

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