The super-hot rate of healthcare job growth has started to abate after hospitals and health providers have staffed up since 2013 to care for 20 million newly insured people under the Affordable Care Act.
But the same can’t be said for health spending, according to the healthcare think tank Altarum Institute based in Ann Arbor, Mich.
In January, U.S. health spending grew 5.7% compared to the same month in 2016, the same as in December. That outpaced Altarum’s projections. The institute’s analysts had expected growth to come in between 4% and 4.5% during the third and fourth quarters of 2016, said Ani Turner, co-director of Altarum’s Center for Sustainable Health Spending.
Turner said the only logical explanation for the bump is higher-than-expected utilization of services, since there hasn’t been a massive uptick in uninsured gaining coverage as during the Medicaid expansions, and prices are growing at a moderate 2%.
The center doesn’t capture the data to specifically back that contention, she said. But anecdotally, analysts are hearing stories of patients getting elective care because they fear what will come when the ACA is replaced, she said.
Turner also noted that the insured are waiting until late in the year to have elective procedures done after they’ve paid off their high deductibles. With increasing numbers of people being put on high-deductible insurance by employers and those deductibles getting ever higher, that might be playing into the national health spend, Turner said.
The 5.7% rate of health spending growth is closer to the 6% to 7% annual growth rate of 10 years ago than the 2.9% seen in 2013 when Medicare ratcheted down on prices and many high-priced pharmaceutical came off patent and had to compete with lower-cost generics, Turner said.
In January, health spending reached a seasonally adjusted annual rate of $3.47 trillion, or 18.2% of the Gross Domestic Product, a value of all goods and services sold in the economy.
Altarum is starting to see an expected slowing in healthcare hiring as few people are acquiring healthcare insurance for the first time, Turner said.
Health providers have been bulking up on staff to meet the new demands on care brought by the newly insured and the transition to providing more care in outpatient settings, she said.
Now, those systems expect productivity gains to kick in as their staffs reach proficiency.
Healthcare job growth averaged 19,000 in the months of January and February compared to an average of 32,000 new jobs per month throughout 2016 and 2015, she said.
The question now is whether uncertainty over the looming replacement of the ACA will cause hiring to stall or decline.
“While still very early in the year, 2017 so far is showing a tapering off of the acceleration in health job growth that aligned with expanded health insurance coverage. Providers may also be more cautious given uncertainty about changes to Medicaid and insurance markets,” the center said in its report.