Report: National Health Spending up More Than 5% in First Half of 2016


National health spending in June 2016 was 5.2 percent higher than in June 2015, totaling $3.5 trillion, says a new report from Altarum Institute, an Ann Arbor-based health care research and consulting firm.

According to the institute’s Health Sector Economic Indicators brief, health spending also grew at a rate of 5.3 percent for the first six months of 2016, slightly below the 2015 estimate of 5.5 percent made by the Centers for Medicare and Medicaid Services, but above the 4.8 percent rate that the center projects for all of 2016.

“Health spending growth has shown the expected slowing since the bump associated with Affordable Care Act expanded coverage, and could drop below 5 percent during the second half of 2016,” says Charles Roehrig, founding director of Altarum Institute. “This would be consistent with the latest (Centers for Medicare and Medicaid Services) 11-year projections showing 4.8 percent growth for 2016.”

The report also says that health care prices in June 2016 were 1.6 percent higher than in June 2015, the highest rate since December 2014. The June 12-month moving average was 1.3 percent, the highest level since July 2015.

Year-over-year hospital price growth was steady at a 1 percent rate in June, as was physician and clinical services prices, at a 0.3 percent rate in June. Drug price growth jumped to 4.4 percent, the highest rate since August 2015.

The health care industry also added 43,200 new jobs in July, above the 12-month average of 39,700 new jobs per month. Strong growth in hospital hiring put the July figure of 17,100 above the 12-month average of 15,300.

Altarum employs almost 400 individuals and has additional offices in the Washington, D.C., area; Portland, Maine; and San Antonio.