July health spending growth jumped 4.2%News added by Benefits Pro on September 18, 2012

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By Amanda McGrory

National health care spending jumped 4.2 percent in July for an increase from the 3.9 percent growth rate in June, according to the September Health Sector Economic Indicators briefs released by Altarum Institute’s Center for Sustainable Health Spending.

This continues to mark a historically moderate trend rate, the briefs find. For 2012, the average rate of spending growth is at 4.3 percent, a decline from the 2011 average of 5.2 percent. This is near the all-time low growth of 3.9 percent in 2010. Health care prices in July 2012 rose 1.9 percent from July 2011; however, they are down from June. Based on a 12-month moving average, price growth has hit the lowest level at any time since January 1999.

In August, there was a growth of 17,000 health sector jobs for the third month of gains under the 24-month average of 24,000. Still, as total nonfarm payroll job growth hit 96,000 for August, the health care share of total employment marked a record high of 10.79 percent.

“Slightly higher health spending in July, nevertheless, continues the moderate growth experienced in 2012 and the second half of 2011,” says Charles Roehrig, director of the Center. “If this trend persists for the remainder of 2012, it will signal a return to the historically low growth rates seen in 2009 and 2010. Also, with extremely low health price growth, any uptick in spending will require increases in utilization that seem unlikely in this environment.”

Of the gross domestic product, the health spending share was 18.1 percent in June 2012, slightly under the record high of 18.3 percent in June 2011, while still higher than the 16.4 percent figure in December 2007. For per capita health care, utilization rose by 1.5 percent from last July to average 1.7 percent growth in the past year and 1.6 percent growth over the last six months.

Originally published on BenefitsPro.com
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