Personal care dominated the healthcare industry in national spending growth in 2023, according to healthcare research and consulting firm Altarum’s most recent Health Sector Economic Indicators report.
Spending on all personal healthcare, which includes hospital care, physician services, home health and more, rose by 7.7% throughout 2023. Hospital care made up the largest share, at 31%, while home health was responsible for about 3% of personal care spending. Increased service utilization, rather than price increases, was primarily responsible for the spending growth, Altarum’s report said.
Meanwhile, home healthcare spending grew at a rate of 12.7% year-over-year in December, which far outpaced overall healthcare spending growth of 4.8% in the prior year. Prices for home health services rose 2.8% in 2023, and are predicted to rise another 3.6% by the end of 2024, according to the report.
National health spending, including all healthcare segments, increased 6.2% in 2023, with the Health Care Price Index rising by 2.8% year-over-year in January.
Employment numbers rise
Employment in healthcare has continued to improve, especially within home care. The number of home health workers grew by about 7.2% year-over-year in January. Between December 2023 and January 2024, the industry added roughly 15,000 new employees. And since February 2020, home health employment has risen at an average of 2.3%, and in January that rate spiked to 11.4% — highest among all other healthcare occupations.
The healthcare industry in general saw a 4.3% year-over-year increase in service utilization, with the prescription drug and home health segments leading growth. Home health utilization rose 8.4% year-over-year by the end of 2023, just behind prescription drug utilization, which grew by 9.5%.
Home health has seen steadily increasing employment rates and spending growth during the past several months. A recent Altarum report found that home health was the fastest-growing segment of healthcare employment throughout 2023. And home health led national health spending for three consecutive months, including January.
