The health care spending share of GDP reached an all-time high of 18.2 percent in June 2011, according to a new report. At the same time, the health sector is creating more jobs than any other industry.
Health spending in July 2011 grew by 5.1 percent relative to July 2010; yet health care price inflation for the same period remained subdued at 2.2 percent. The information comes from the September Health Sector Economic Indicators briefs from Altarum Institute's Center for Sustainable Health Spending.
Still, the briefs indicate the health sector continues to create jobs—30,000 in August—despite last month's report of a zero jobs growth for the overall economy. Health now accounts for 10.8 percent of total employment – an all-time high.
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"While there is anecdotal support of health sector belt-tightening in anticipation of imminent policy changes, there is still no evidence in the data of a slowdown in health spending or employment," says Charles Roehrig, the center's director. "We simply don't see the falling employment or spending trends that have plagued other sectors in the economy. As GDP expectations for 2011 and 2012 continue to be scaled back, our analysis shows the share of the overall economy tied to health is likely to increase."
Roehrig says the "delicate balance" the health sector presents should be recognized as the president and the Congress wrestle with creating jobs in the economy while at the same time reducing federal spending.
"Federal spending on health care will be looked at. Yet health care continues to create jobs, offering some stabilizing effect," he says. "Losing any jobs in a zero-employment -growth environment risks further economic stagnation and presents a potential policy dilemma."
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