Nursing homes are experiencing significant job growth, according to the latest Altarum Health Sector Economic Indicators (HSEI) briefs for August 2024. In July 2024 alone, nursing and residential care facilities added 9,200 jobs, with nursing homes contributing 6,800 of those positions. This represents a remarkable 44.9% increase over the 12-month average of 4,700 jobs, indicating a growing demand for nursing staff.
Modest Growth in Residential Care Facilities
While nursing homes saw substantial job growth, residential care facilities experienced a more modest increase, adding 2,400 positions in July 2024. This figure falls short of the 12-month average of 6,000 jobs, suggesting that job growth in this segment of the healthcare sector is slowing down.
Health Care Employment's Broader Impact
Healthcare jobs accounted for 48.2% of all new employment in July 2024, nearly half of the total. The majority of this growth came from ambulatory healthcare services, which added 26,300 jobs, and hospitals, which added 19,500 jobs. This underscores the critical role of the healthcare sector in the overall economy.
Significant Wage Increases in Nursing and Residential Care
Wages in nursing and residential care facilities have also seen notable increases. As of June 2024, nominal wage growth reached 4.6% year-over-year, the highest among primary healthcare subsectors. This outpaced wage growth in ambulatory health care services (3.8%) and hospitals (3.0%). The strong wage growth in nursing and residential care facilities highlights the competitive pressures to attract and retain skilled staff.
Rising Health Care Costs
Despite the wage increases, the sector faces rising healthcare costs. The Health Care Price Index (HCPI) rose by 2.9% year-over-year in July 2024. Notably, the cost of nursing home care increased by 4.6%, one of the fastest-growing categories in health care. This rise in prices outpaces the broader Consumer Price Index (CPI), which grew by 2.9% in the same period.
Utilization and Spending Trends
Healthcare spending continues to rise, with national health spending up by 7.7% year-over-year as of June 2024, making up 17.8% of GDP. Personal health care spending saw an 8.1% increase, driven by a substantial 20.9% rise in home health care spending. This reflects a shift towards increased use of home-based care services. Utilization within the sector remains strong, with a 4.8% year-over-year increase in June, particularly in home health care (18.5%) and nursing care (5.2%).
Conclusion
The nursing home sector is seeing strong job growth and wage increases driven by rising demand and competitive pressures. However, these gains are tempered by increasing healthcare costs, particularly in nursing home care, highlighting ongoing challenges in the sector.
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