Nursing, residential care facility employment tops pre-pandemic levels for first time

Nursing and residential care facility employment in January exceeded pre-pandemic levels for the first time, according to Altarum’s monthly Health Sector Economic Indicators brief, published Tuesday.

In December, employment in nursing and residential care facilities had remained 1% below its pre-pandemic peak in February 2020.

But nursing and residential care facilities added 13,200 jobs in January. Although that was a milestone for the sector, such facilities saw the least employment growth among healthcare types, Altarum Fellow and Senior Researcher George Miller told the McKnight’s Business Daily.

Overall in January, employment in healthcare grew by 43,700 jobs. By comparison, nonhealthcare industries added 99,300 jobs, he said. Healthcare job growth in January was led by ambulatory healthcare services, which added 16,600 jobs, of which 10,600 were in home healthcare. Hospitals added 13,900 jobs.

Annual healthcare spending

Initial data for all of 2024 suggest that spending on home healthcare grew 13.2% last year, outpacing all areas of healthcare. Overall, national health spending grew by 7.4% for the year.

Personal healthcare spending (spending on healthcare goods and services) grew by 7.9% for the year. Among major spending categories within personal healthcare, home healthcare grew the fastest, at 13.2%, whereas spending on hospital care grew the least, at 7.2%, according to Miller.

Healthcare rates in January were 2.7% higher than in January 2024. 

“Among major spending categories, this overall growth rate was led by prices for prescription drugs, at 4.5%, the highest year-over-year increase since March 2017,” Miller said. “Prices for hospital care and nursing home care trailed at 2.4% and 2.2%, respectively.”

For December, national health spending grew by 6.9% over December 2023. Personal healthcare spending grew by 7.1% between December 2023 and December 2024. 

“Among major spending categories, annual growth through December 2024 was again greatest for home healthcare, at 9.4%,” Miller said. “Growth was slowest for prescription drugs, at 4.7%.”

Wage growth

Also in December, year-over-year wage growth in the healthcare industry was 4.6%, including 4% in nursing and residential care facilities, 4.3% in ambulatory healthcare services (which includes home healthcare) and 5.1% in hospitals.

Altarum’s monthly HSEI briefs analyze the most recent data available on health sector spending, prices, employment and utilization. Support for the work is provided by a grant from the Robert Wood Johnson Foundation.