Price growth for home health services continued to lag behind most of the healthcare industry in the first month of 2023, according to a new report from healthcare research and consulting firm Altarum.
In January, prices for home health services increased 1.8% over December 2022. That was the second slowest rate among other healthcare components, according to Altarum’s monthly Health Sector Economic Indicators. Only physician and clinical services prices grew at a slower pace in January at 0.5%. The overall Healthcare Price Index grew 2.7% for the month. January was also the eighth consecutive month the sector increased more slowly than the overall healthcare price index.
Price reflects the total amount paid for care, including a combination of the amount paid for services by insurance companies and individuals. Corwin Rhyan, research director for health economics and policy at Altarum, told McKnight’s Home Care Daily Pulse home health’s slow price growth is tied to Medicare rates.
“This slower growth for home health care is likely attributable to the fact that in the past year reimbursement rates from public payers have increased more slowly than prices paid by private insurance, and about three-quarters of home health care spending comes from public — state and federal — sources,” Rhyan said in an email.
Rhyan added that the slower growth rate for home health prices is likely to continue this year due to the skimpy 0.7% Medicare rate increase the Center for Medicare & Medicaid Services extended to home health agencies for calendar year 2023. Home healthcare providers were also hit this year with a 3.925% behavioral cut, amounting to $635 million this year. A similar cut is expected to go into effect next year.
The monthly report did have some positive news for healthcare providers overall. In January, the industry added 58,000 jobs, consistent with a pattern that began last summer. Wage growth has also continued to moderate for the healthcare sector, falling to a 4.9% rate in December after peaking at 7.5% last July.
