National healthcare spending growth ballooned to more than three times the rate of the rest of the economy in the third quarter, as healthcare employers continue to hire at a breakneck pace, the federal government reported Thursday.
Healthcare spending jumped 4.7% compared to the third quarter a year ago, while the overall economy grew at a 1.5% pace compared to the same quarter last year, according to the advance estimate of third-quarter gross domestic product released by the U.S. Commerce Department's Bureau of Economic Analysis.
But analysts cautioned that comparing healthcare spending to the overall GDP is not a simple matter. The overall GDP is always bumpy, and the percentage change can swing month-to-month, said Paul Hughes-Cromwick, senior health economist at Ann Arbor, Mich.-based Altarum Institute.
Instead, attention should be focused on hiring in the healthcare sector, especially compared with hiring in other sectors, Hughes-Cromwick said. According to an Altarum labor study, healthcare jobs grew 3.2% year over year, compared with 1.8% growth in other jobs. The healthcare share of total employment reached 10.7% in September, an all-time high, according to the study.
The overall GDP growth of 1.5% in the third quarter was lower than the revised 3.9% growth in the second quarter of 2015, and is smaller than the 4.3% growth in the third quarter of 2014.
The estimate from the Bureau of Economic Analysis comes a day after the Health Care Cost Institute reported that spending on brand-name prescription drugs jumped 8.2% in 2014. The study named three expensive hepatitis C drugs—Johnson & Johnson's Olysio and Gilead Sciences' Harvoni and Sovaldi—as the main causes of higher spending on brand-name drugs.