Dive Brief:
- Spending on healthcare accelerated during the first quarter of 2019, according to a recent report from consulting firm Altarum. National healthcare spending in March 2019 ($3.76 trillion) was 4.6% higher than the previous year and spending on prescription drugs grew the fastest, according to the report.
- Healthcare hiring returned to a more moderate level in April, Altarum said, noting the robust hiring in the final quarter of 2018 and the first quarter of 2019.
- Healthcare prices grew 1.5% in April compared to the year prior and hospital price growth increased 2%, the most compared to other categories including prescription drugs.
Dive Insight:
The report shows healthcare prices are growing more slowly than economywide prices, or the prices of all other goods, continuing a 20-month trend.
“That tells me that for a variety of reasons, I think there is successful pressure on healthcare prices and that is a good story going forward," report author and senior economist Paul Hughes-Cromwick told Healthcare Dive.
Prescription price growth is exceptionally slow, Hughes-Cromwick said. But there's an important nuance.
“The fact that they're not growing quickly is completely distinct from them being high,” he said, pointing to the high price of insulin as an example.
Untenable drug prices have become the target of the Trump administration. A top priority of the administration is lowering drug prices, which previously laid out a blueprint of how to accomplish that goal.
Just this week, the administration finalized a rule for Medicare Part D, although it pulled its punches, deciding to forgo some of the more stringent proposals after receiving substantial pushback from the industry and patient advocacy groups.
The overall slow growth has "massive implications for the burden that health care spending imposes on the economy and our social wellbeing," the report notes.
Although price growth is slow, prescription drug spending growth grew by nearly 9% year-over-year in March, the highest monthly value since October 2015, according to the report.
Healthcare hiring remains strong alongside overall labor growth. During the last year, the private healthcare sector added 403,000 jobs.
