S&P report shows healthcare cost growth slowing
Data released last week for the S&P Healthcare Economic Composite Index shows that the average cost of healthcare services increased 5.06 percent over the preceding 12 months ending in September, a significant drop from the annual growth rate of 5.7 percent reported in August.
The growth rate is a weighted average of nine separate indices tracked by S&P Dow Jones Indices, all of which also showed a slowing of annual growth rates from the previous report. The report noted that both the Professional Service Medicare and Hospital Index grew by 1.57 percent and 3.84 percent, respectively – their lowest annual increases since January of 2005; and the Hospital Commercial Index, which showed an annualized growth rate of 5.12 percent, is the lowest in that sector since May of 2010.
"Annual growth rates for all our nine headline healthcare indices continued to decelerate in September 2012; this deceleration is quite substantial compared to historic patterns," said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, in a press release detailing the data. "In September, two of the nine headline indices posted their seven-and-a-half-year historic lows."
Cost growth in the other healthcare indices:
- Medicare Index grew by 2.04 percent;
- Commercial Index grew by 7.05 percent;
- Hospital Medicare Index grew by 2.17 percent;
- Hospital Commercial Index grew by 5.12 percent;
- Professional Services Index grew by 6.13 percent; and
- Professional Services Commercial Index grew by 8.50 percent.
The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs in the U.S. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year.
