Annual Growth Rates Broadly Decelerate in December 2012 According to the S&P Healthcare Economic Indices

NEW YORK, Feb. 21, 2013 /PRNewswire/ -- Today S&P Dow Jones Indices announced the results of S&P Economic Healthcare Indices for 2012. Data released by S&P Dow Jones Indices for the S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 3.73% over the 12-months ending December 2012. This is a deceleration from the +4.46% annual growth rate recorded in November 2012 and the lowest rate in the eight-year history of the index.

All nine S&P Healthcare Economic Indices posted deceleration in their annual growth rates in December 2012. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 5.39% over the year ending December 2012, down from +6.19% reported for November 2012. Annual growth rates in Medicare claim costs rose by 1.20%, according to the S&P Healthcare Economic Medicare Index, down from +1.81% recorded in November 2012. It is the lowest growth rate in the history of the Medicare Index. 

The Professional Services Index annual growth rate was +4.78% in December 2012, down from the +5.68% November print. The Professional Services Commercial Index decelerated to +7.34% in December, down from +8.17% reported in November. The Professional Services Medicare annual growth rate was -0.12% in December, down from +0.92% posted in November 2012. It is the first appearance of negative annual growth rate in the history of the index.  

The Hospital Index's growth rate hit its historic low of +2.56% in December from +3.12% recorded in November 2012. It was driven by the Hospital Commercial Index, which hit its lowest rate since the index inception in January 2005. It posted a +3.01% annual rate in December and +3.77% last month. The Hospital Medicare annual growth rate posted +1.93% in December, down from its +2.23% November rate.

"The second half of 2012 showed deceleration in the annual growth rates across most healthcare indices we cover," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "In December 2012 all nine headline healthcare indices we publish showed deceleration in their annual growth rates. The Composite Index posted an annual rate of +3.73%, the Commercial Index +5.39% and the Medicare Index +1.20%.

"In December, five of the nine healthcare indices hit their historic lows. They were the Composite Index at +3.73%, the Medicare Index at +1.20%, the Professional Services Medicare Index at -0.12%, the Hospital Index at +2.56% and the Hospital Commercial Index at +3.01%. The Commercial Index posted a recent low of +5.39% in December – the lowest rate since October 2009.

"For the first time in the index history, the Professional Services Medicare posted a negative annual growth rate. It was at -0.12% in December, 1.04 percentage points down from its November rate. It has the lowest annual growth rate among our healthcare indices.

"In December, the Professional Services Commercial Index was +7.34%, 0.83 percentage points down from its November rate.  It remains the highest index among healthcare indices we cover."

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.

The S&P Healthcare Economic Composite Index is a weighted average of the S&P Healthcare Economic Commercial Index and the S&P Healthcare Economic Medicare Index.  Alternatively, it is a weighted average of the S&P Healthcare Economic Hospital Index and the S&P Healthcare Economic Professional Services Index, as each of these indices has the analogous Commercial and Medicare component.

The table below summarizes the year-over-year change in the S&P Healthcare Economic Indices for the 12-month period ending December 2012. With each monthly release, the index levels, including the 12-month moving averages, are recalculated for the full history of the indices, whenever there are revisions to underlying data used in the models. The entire revised history, as well as full results for the underlying S&P Healthcare Economic Indices, is available from S&P Dow Jones Indices as a subscription service.

As observed in the past, medical costs funded by commercial insurance plans significantly exceed those funded by Medicare.

The S&P Healthcare Economic Indices were developed in consultation with Health Index Advisors, a joint venture between Aon Hewitt and Milliman, Inc., and were derived from the former Milliman, Inc. Health Cost Index™ which was first published in 1987. The complete methodology, fact sheet and supporting research for the S&P Healthcare Economic Indices are available at http://www.spindices.com/index-family/specialty/healthcare-cost

About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500^® and the Dow Jones Industrial Average^SM, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of institutional and retail investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of assets classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.

It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, and their respective affiliates, parents, subsidiaries, directors, officers, shareholders, employees and agents (collectively "S&P Dow Jones Indices") does not sponsor, endorse, sell, or promote any investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any S&P Dow Jones Indices index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices or its affiliates do not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

STANDARD & POOR'S and S&P are registered trademarks of Standard & Poor's Financial Services LLC.  "Dow Jones" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").

For more information:

Dave Guarino
Communications
S&P Dow Jones Indices
[email protected]
201-755-5334

David Blitzer
Managing Director and Chairman of the Index Committee
S&P Dow Jones Indices
[email protected]
917-376-1204

SOURCE S&P Dow Jones Indices

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