Another Look at Health Care Inflation

Time for another look at the informative regular briefs from Altarum on health inflation, spending and labor trends.  Looking first at spending, it rose at a 5.7% rate year-over-year in November.  Personal health care spending, that is actual medical care for all of us, rose 8%, faster than GDP, and making a substantial contribution to overall inflation.  Spending rose fastest for drugs, nursing home care and physician services.  Oh and we are spending an astounding $4.8 trillion on health care, 18% of GDP.  Health care prices increased at a 3.1% clip YOY in October, an uptick from September.    Nursing home, home health care and dental care prices all rose fastest, which physican’s pay barely increased.  Medicaid prices showed the most significant uptick and Medicare the lowest.  Medicaid has to pay providers more to treat those patients and the federal government thinks it can just screw providers forever with no political blowback.

Utilization of services grew by 4.6% year-over-year.  Health care accounted for 40% of all new jobs in October and health care wages continued a modest increase trend at around 4%, but the rise was greater where the most jobs are–in hospitals and doctors’ offices.  All those new jobs have to be paid for and are likely a leading indicator for both spending and price increases.   Health inflation is highly likely to get worse and health insurance costs are already showing alarming trends for 2024.   (Altarum Briefs)