According to Altarum's monthly health sector economic indicators, which were released Wednesday, spending on nursing homes was the slowest in January.
For the first time in months, home health care is not the fastest growing category, up 6.1% year-on-year, Altaram Fellow and senior researcher George Miller told McKnight's business every day. Among the major spending categories, annual growth from December to January was the largest in retail sales of prescription drugs at 8.3%.
The data represent a reversal from previous reports, indicating that among the main spending categories, annual annual growth through December 2024 was the largest in home health care at 9.4%. At that time, annual growth was 4.7%, the slowest in prescription drugs.
Overall, Miller said in January, national health spending rose 6.3% year-on-year, but growth rates were roughly the same as in December 2024 levels.
“The very slight decline over the course of a month was driven by a significant decrease in personal healthcare spending,” he said.
cost
According to the report, healthcare rates in February were 2.8% higher than in February 2024.
“Of the main spending categories, this overall growth rate was driven by 4.6% prescription drug prices, continuing its sharp rise in 2025 from an average of 1.4% in 2024, the highest year-on-year since March 2017,” Miller said.
The rate of growth in other major categories ranged from 1.6% for dental care to 2.6% for home care.
The report says that key payers continue to outperform after overtaking year-over-year private insurance premium growth (3.6%) for Medicaid (2.6%) services last month. Medicare services rates increased by 1.6%.
“In particular, the revised data shows that the change in annual price for physician services for Medicare years was positive in January for the first time since January 2022,” Altarum said.
Employment and wages
Healthcare employment increased 52,000 jobs in February, while the non-health industry increased 99,000 jobs, Miller noted.
Healthcare employment growth in February added 25,600 jobs, of which 4,100 were participating in home health care. The hospital added 14,900 jobs, while nursing and residential facilities added 11,500 jobs.
“In January 2025, the healthcare industry's nominal wage growth year-over-year was 4.3%, including 4.6% in hospitals, 4.5% in outpatient health services (including home care), and 3.7% in nursing and residential care facilities,” Miller said.
Altarum's monthly HSEI brief analyzes the latest data on health sector spending, price, employment and utilization. The March report is the last in a series supported by a grant from the Robert Wood Johnson Foundation.
