Health Spending Grows by Just 3.8% in May

July 19, 2012 — Health spending in May 2012 grew by just 3.8% compared to May 2011, continuing a trend of about 4% annual growth since 2009. Health-care prices in May 2012 were 2% higher than in May 2011, ticking up a tenth from April. On a 12-month moving average basis, price growth is lower now than at any time since January 1999.

These data come from the July Health Sector Economic Indicators briefs released by Altarum Institute's Center for Sustainable Health Spending. The briefs cover health-care spending, utilization, prices and employment.

A rise in June of only 13,000 health-sector jobs aligns with slow price and spending growth. This increase contrasts sharply with the May growth in health-care employment of 33,000 and is well below the 24-month average of 25,000. With total payroll job growth of only 80,000 in June, the health care share of total employment reached another all-time high of 10.8%, representing nearly one in nine U.S. jobs.

"Our analysis continues to show stable health spending growth hovering around the 4% mark, and this 3½-year trend is entirely unprecedented," said Dr. Charles Roehrig, director of the Altarum Center for Sustainable Health Spending. "As a result, health spending as a share of GDP has held steady at about 18% over this same period and, were it not for disappointing GDP growth, could actually be falling."

At 18% percent in April 2012, the health spending share of GDP is just below the all-time high of 18.1% in June 2011. Per capita health care utilization grew at 0.9% year over year in May and is averaging 1.1% growth for the last 12 months and 1.3% growth over the last 6 months.

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