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Nursing home care spending exceeds most categories of national health spending, according to Altarum


Nov 20, 2023

Nursing home care in September represented one of the fastest-growing categories of national health spending, following only spending on prescription drugs. Altarum’s monthly Health Sector Economics Brief, released Friday, reported that spending on nursing home care has increased by 9.8% since September 2022. This increase is due to rises in both prices and utilization, according to Altarum fellow and Senior Researcher George Miller.

In contrast, home care showed the slowest growth rate among major categories of national health spending. It only increased by 5.5% in September, despite the fact that home healthcare prices have been growing at a rate among the fastest among the major categories, with a 4.6% increase year over year. However, the relatively low increase in spending was due to a slight decline in utilization of home healthcare services.

The year-over-year spending growth among other major healthcare categories, according to the report, is as follows: prescription drugs (11.8%), dental care (9.8%), physician and clinical services (8.9%), and hospital care (6.9%). National health spending overall increased by 5.7% year over year, reaching a seasonally adjusted annual rate of $4.78 trillion, accounting for 17.2% of gross domestic product.

The brief also highlighted that personal healthcare spending, which excludes categories such as the net cost of insurance and public health expenditures, has grown at a rate faster than GDP since February 2023 and grew by 7.4% year over year in September.

In addition to spending data, Altarum’s report included information about employment trends. Nursing homes showed modest employment growth in October, adding 4,400 jobs. Meanwhile, home healthcare added 9,500 jobs in October, slightly above the monthly average over the past year. According to Miller, Altarum just released a blog characterizing nursing home staffing trends throughout the COVID-19 pandemic and comparing recent staffing levels with the federal government’s newly proposed staffing requirements for nursing homes.

By Editor

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