Health Spending Approaches Record 18% Of GDP, Inflation Tame

ANN ARBOR — National health spending in November 2015 was up 5 percent compared to November 2014, continuing the slowdown from a peak of nearly 7 percent year-over-year growth hit in February 2015, according to new figures from the Ann Arbor healthcare consulting firm Altarum Institute.

The institute’s Center for Sustainable Health Spending reported that the share of gross domestic product devoted to health spending was just under 18 percent in November, which would be an all-time record level.

The increase in spending is being driven by an increase in healthcare access, however, not healthcare inflation. Health care prices in November were just 1.1 percent higher than in November 2014. That’s a decline from a 1.2 percent year-over-year inflation rate recorded in October, and near an all-time low.

Year-over-year hospital prices rose by 1.4 percent, but those for people with private insurance rose at a higher clip. 2.3 percent. Altarum described that difference as a development that “bears close monitoring in light of the current health care merger frenzy.”

The health sector added 39,400 jobs in December, for a total annual gain of 475,000 new jobs, 50 percent more than in 2014. More than one-third of new health jobs in 2015 were in hospitals, although the hospital hiring boom may be moderating as hospitals have added fewer jobs each month in the second half of the year.

For a copy of the full Health Sector Economic Indicators report, visit http://www.altarum.org/HealthIndicators.

Altarum provides research and consultnig to the health care industry. It employs almost 400 people. Besides its Ann Arbor headquarters, Altarum has offices in Washington, D.C., Rockville, Md., Silver Spring, Md. San Antonio, Texas, and Portland, Maine.

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