Healthcare sector achieves modest revenue growth in 2008

Health care sector revenue increased by 5.7 percent in 2008 to $1.75 trillion, up from $1.66 trillion in 2007, according to new data from the U.S. Census Bureau. This sector is classified under the North American Industry Classification System as NAICS 62.

These figures come from the 2008 Service Annual Survey: Health Care and Social Assistance, a series of tables which provides estimates of revenue, sources of revenue and expenses for taxable and tax-exempt employer establishments that provide health care and social assistance to individuals.

"In spite of only small increases in some industries over the past year, the health care sector continues to represent a sizable portion of our economy," said Mark Wallace, chief of the Census Bureau's Service Sector Statistics Division. "At $1.75 trillion, this sector made up 30 percent of the service sector in 2008, which itself represented about 55 percent of the economic activity in the United States."

Revenues from community care facilities (NAICS 6233) for the elderly saw modest growth in 2008, reaching $35.5 billion in 2008, an increase of 3.3 percent from 2007, according to new data from the U.S. Census Bureau.

Continuing care retirement communities (NAICS 623311) increased 3.1 percent in 2008 compared with a 9.8 percent increase in 2007. This industry is comprised of establishments primarily engaged in providing residential and personal care services for the elderly and other persons who are unable, or do not desire, to fully care for themselves.

The homes for the elderly industry (NAICS 623312) grew 3.5 percent in 2008. In contrast to community care facilities, homes for the elderly typically include on-site nursing care facilities.

Other residential care facilities (NAICS 6239) remained relatively flat at 1.4 percent in 2008. These include boys' and girls' residential facilities, orphanages, group foster homes, homes for unwed mothers, boot camps for delinquent youth and disabled group homes without nursing care, among others.

As in recent years, Medicaid was the leading source of funding for nursing and residential care facilities (NAICS 623) in 2008, contributing more than $60 billion. Medicare is the leading source of funding for kidney dialysis centers and home health care services.

The social assistance subsector (NAICS 624), which provides a wide variety of social assistance services directly to their clients but does not include residential or accommodation services, increased 6.6 percent in 2008 to $131.9 billion, up from $123.8 billion in 2007.

One of the industries that helped account for the growth in the social assistance subsector was emergency and other relief services (NAICS 62423), which increased 15.7 percent to $8 billion. This is the first increase in revenue for this industry since 2005.

The industries in the health care and social assistance sector are arranged on a continuum starting with those establishments providing medical care exclusively, continuing with those providing health care and social assistance, and finishing with those providing only social assistance. The sector includes both health care and social assistance because it is sometimes difficult to distinguish between the boundaries of these two activities.

All industries in the sector share the commonality of process -- labor inputs of health practitioners or social workers with requisite expertise, i.e., trained professionals. Many of the industries in the sector are defined based on the educational degree held by the practitioners included in the industry.