National health expenditures for the first 11 months of 2013 were 4.0% above the same period in 2012. While trending up since April - preliminary spending data for November 2013 showed year over year growth of 4.5% - expenditure growth remains near the revised all-time low rate of 3.6% for 2011. Depending on the December data, 2013 could be the fifth consecutive year of health spending growth below 4%, a rate that had not been seen before in the 50-plus years of national health expenditure accounting.

The health spending share of gross domestic product (GDP) was 17.2% in November, the lowest reading since September 2012 indicating that health care may be absorbing a smaller share of the economy, especially if GDP growth accelerates in 2014, as widely predicted.

Health care lost 6,000 jobs in December, 2013. If this estimate stands, it will be the first monthly drop since July, 2003, and only the second since at least 1989. The health sector added about two-thirds as many jobs in calendar year 2013 (208,000) as in 2012 (321,000), with particular slowing in hospitals and nursing homes. The health sector share of total employment fell to 10.71%, below the all-time high of 10.73% recorded in August, 2013.

National health care prices in December, 2013 were 1.1% higher than in December, 2012, barely above the all-time low of 1.0% recorded in October, 2013. The December, 2013 12-month moving average, at 1.3%, represents a new all-time low for our data. Year over year, hospital prices grew 1.5% in December, physician and clinical services prices rose by 0.2%, and home health care prices actually fell, recording a -0.5% rate.

These data come from the monthly Health Sector Economic IndicatorsSM (HSEI) briefs released by Altarum Institute's Center for Sustainable Health Spending (www.altarum.org/HealthIndicators).

"While 2013 looks to be another year of historically slow growth in health spending, the data currently suggest an upward drift during the second half." said Charles Roehrig, director of the Center. "We expect this upward trend to accelerate in 2014 with the advent of ACA expanded coverage and a recovering economy. It will be interesting to see what the data say as the new year unfolds."

Altarum Institute (www.altarum.org) integrates objective research and client-centered consulting skills to deliver comprehensive, systems-based solutions that improve health and health care. Altarum employs almost 400 individuals and is headquartered in Ann Arbor, Michigan, with additional offices in the Washington, D.C., area; Portland, Maine; and San Antonio, Texas.

Altarum Institute
Ken Schwartz, 571-733-5709
ken.schwartz@altarum.org