The pandemic brought about serious upheaval in the health care sector. Services directly connected to the COVID-19 virus were overwhelmed at times, while non-essential services came close to a standstill. Our question for today is, in sum, how has the health care sector fared?
The FRED graph above shows personal consumption expenditures on health care. This measure probably isn’t a good indicator to answer our question, as it doesn’t include any of the expenses paid by other entities, such as businesses and various levels of government. So we need a measure that encompasses all of the health care sector.
The second FRED graph gets closer to what we want, although with data that are not as current as the data in the first graph.
We see that total revenue of health care establishments (in blue) dipped severely at the start of the pandemic, but then got back on track with its previous trend. This pattern is actually not that much different from the rest of the economy. Health care employment (in red) shows a different picture: Employment is still far below the peak before the pandemic and, hence, even further below the long-term trend.
But one has to be careful here: The revenue numbers aren’t adjusted for inflation. So, one more graph…
Our last FRED graph (below) shows that this storyline still holds: The health care sector has had to deliver more than what had been expected before, but with far fewer employees.
How these graphs were created: First graph: Search for and select “health care expenditures.” Second graph: Search for and select “health care revenue.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “health care employment.” Use the “Format” tab to put the y-axis on right for the second series. Reduce the sample period to focus on the last years. Third graph: Starting with the second graph, use the “Edit Graph” panel to add a series to the first line by searching for “GDP deflator” and applying formula a/b*100.
Suggested by Christian Zimmermann.