National Home Health Care Spending Rises 11.1%

Spending on home health care increased by 11.1%, maintaining its leading position in health care expenditures, according to a new brief from Altarum.

Altarum’s monthly Health Sector Economic Indicators (HSEI) briefs analyze the latest data on health sector spending, prices, employment and usage.

The year-over-year spending on home health care is compared to other health care segments, such as nursing home care and physician and clinical services, which both exhibited a growth rate of 8.9%. Hospital care showed a lower growth rate of 6.8%, the brief indicated. U.S. payers spent approximately $172.3 billion on home health care, which constitutes about 3% of the nation’s total health care expenditure exceeding $5.3 trillion, according to Altarum’s research.

The report indicates that rising usage rates, rather than price increases, are primarily driving health care spending growth across all categories. Home health usage increased by 9.6% year over year. Although this rate is the highest among all categories, it is below the averages for the past three, six, and twelve months. In contrast, hospital care saw a growth rate of only 3.6%.

Among the major payers of health care services, prices increased the most for Medicaid patients, rising by 5.2% year over year. This is higher than the price growth for patients with private insurance or Medicare.

In November 2024, the health care industry added 53,600 new jobs, with home health care experiencing some of the fastest job growth in recent months. The home health subsector added about 16,000 jobs, compared to nursing and residential care facilities, which added 11,900 jobs, and physician offices, which added only 1,900. Hospitals led employment growth, adding 19,300 jobs in November, 8% higher than the 12-month average.

Wages across all health sectors also increased, with employee pay rising by approximately 3.5% year-over-year. At the same time, the unemployment rate saw a slight increase to 4.2%.

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