Nursing homes posted job growth and wage increases, reflecting broader trends in the health care sector.

That’s according to the latest Altarum Health Sector Economic Indicators (HSEI) briefs for August 2024.

Nursing and residential care facilities added 9,200 jobs in July 2024. Much of the job growth was fueled by a strong increase in jobs at nursing homes, which saw 6,800 new positions. This growth is particularly impressive, representing a 44.9% increase over the 12-month average of 4,700 jobs. The surge highlights the growing demand for nursing staff.

In contrast, residential care facilities experienced more modest job growth, adding only 2,400 positions. This figure is significantly below the 12-month average of 6,000 jobs.

Nationally, health care jobs accounted for nearly half, or 48.2%, of all new employment in July, reflecting the sector’s pivotal role in the broader economy. This growth in health care employment was driven primarily by ambulatory health care services, which added 26,300 jobs, and hospitals, which added 19,500 jobs.

Wage trends 

Wages in nursing and residential care facilities saw a substantial increase, with nominal wage growth reaching 4.6% year-over-year in June 2024. This is the highest growth rate among major health care subsectors, exceeding wage increases in ambulatory health care services (3.8%) and hospitals (3.0%). The strong wage growth in nursing and residential care facilities reflects competitive pressures to attract and retain skilled staff amid rising demand.

However, these wage increases come against a backdrop of rising health care costs. The overall Health Care Price Index (HCPI) increased by 2.9% year-over-year in July, a slight decrease from the previous month.

Prices for nursing home care rose by 4.6%, marking one of the fastest increases among health care categories. This is in contrast to the broader Consumer Price Index (CPI), which saw a year-over-year growth of 2.9%, indicating that health care prices are rising faster than general inflation.

Utilization and spending trends

Health care spending continues to climb, with national health spending up by 7.7% year-over-year as of June 2024, representing 17.8% of GDP. Personal health care spending grew by 8.1%, driven primarily by a significant 20.9% increase in home health care spending. This reflects a broader trend towards increased utilization of home-based care services.

Utilization growth within the sector remains strong, with a 4.8% year-over-year increase in June. Home health care utilization surged by 18.5%, followed by nursing care utilization at 5.2%. These trends highlight the growing reliance on various types of health care services, including both in-home and skilled nursing.