Nursing homes see job growth and higher wages in expanding healthcare sector

Nursing homes experienced employment growth and wage increases, reflecting broader trends in the healthcare sector.

This is according to the latest Altarum Health Sector Economic Indicators (HSEI) reports for August 2024.

Nursing and residential care facilities added 9,200 new jobs in July 2024. Much of the job growth was driven by a sharp increase in jobs in nursing homes, where 6,800 new jobs were added. This growth is particularly impressive, representing a 44.9% increase over the 12-month average of 4,700 jobs. The increase underscores the growing demand for nursing staff.

In contrast, nursing homes saw more modest employment growth, adding just 2,400 new jobs, well below the 12-month average of 6,000 jobs.

At the national level, healthcare jobs accounted for nearly half (48.2%) of all new jobs in July, reflecting the sector's central role in the overall economy. This healthcare employment growth was driven primarily by home health services, which added 26,300 new jobs, and hospitals, which added 19,500 new jobs.

Wage development

Wages in nursing and residential homes increased significantly. In June 2024, nominal wage growth was 4.6% year-on-year. This is the highest growth rate among the major healthcare subsectors, outpacing wage increases in home health services (3.8%) and hospitals (3.0%). Strong wage growth in nursing and residential homes reflects competitive pressures to attract and retain qualified staff in the face of rising demand.

However, these wage increases come against a backdrop of rising healthcare costs. The general healthcare price index (HCPI) rose 2.9% year-on-year in July, a slight decline from the previous month.

Nursing home prices rose 4.6 percent, one of the largest increases across all healthcare categories. This contrasts with the broader Consumer Price Index (CPI), which rose 2.9 percent year-on-year, suggesting that healthcare prices are rising faster than overall inflation.

Usage and spending trends

Health spending continues to rise. Through June 2024, national health spending increased by 7.7% year-on-year, equivalent to 17.8% of GDP. Personal health spending increased by 8.1%, mainly due to a significant 20.9% increase in home health care spending, reflecting a broader trend toward increased use of home care services.

Usage growth within the sector remains strong, recording a 4.8% year-over-year increase in June. Home health care usage increased 18.5%, followed by nursing care usage at 5.2%. These trends highlight the growing reliance on multiple types of healthcare services, including both home and skilled nursing care.