Annual Growth Rates Substantially Decelerate in September 2012 According to the S&P Healthcare Economic Indices

NEW YORK, Nov. 15, 2012 /PRNewswire/ -- Data released today 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 5.06% over the 12-months ending September 2012. This is a deceleration from the +5.70% annual growth rate recorded in August 2012.

All nine S&P Healthcare Economic Indices posted a deceleration in their annual growth rates in September 2012. Professional Service Medicare and the Hospital Index posted their lowest annual rates since January 2005; additionally, the Hospital Commercial Index hit a new recent low with an annual growth rate of +5.12% - its lowest since May 2010. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 7.05% over the year ending September 2012, down from the +7.81% reported for August 2012. Annual growth rates in Medicare claim costs rose by 2.04%, according to the S&P Healthcare Economic Medicare Index, down from the +2.48% recorded in August 2012.  The Professional Services Index annual growth rate was +6.13% in September 2012, down from the +6.67% August 2012 print. The Hospital Index's growth rate fell to its seven-and-a-half year historic low of +3.84% in September from +4.54% recorded in August 2012.

In September 2012, the Professional Services Medicare annual growth rate reached its historic low of +1.57%, decelerating from its August 2012 annual rate of +2.36%. The Hospital Medicare annual growth rate in September was +2.17%, compared to its +2.35% rate in August 2012. The Professional Services Commercial Index decelerated to +8.50% in September, from +8.90% reported in August. The Hospital Commercial Index's annual growth rate decelerated to its recent low of +5.12% in September down from the +6.24% posted for August.

"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," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "In September, two of the nine headline indices posted their seven-and-a-half-year historic lows. The Composite Index posted an annual rate of +5.06%, the Commercial Index +7.05% and the Medicare Index +2.04%. These rates are significantly lower than their respective August 2012 rates.

"With September data, we observe that the growth rate in the Hospital Index has decelerated for five consecutive months, from a recent high of 5.75% in April 2012 to 3.84%, reaching an historic low in September. This downward trend was driven by a deceleration in hospital commercial plans, which also slowed down for five consecutive months and saw the largest deceleration in September. The +5.12% annual rate in September for Hospital Commercial is 1.12 percentage points below the +6.24% rate recorded in August and 3.61 percentage points below the 8.73% annual rate in April 2012.

"The Professional Services Commercial Index decelerated from its recent July peak.  In September, its annual rate was +8.50%, 0.50 percentage points below July's +9.00% print. It still remains the highest among our indices.  

"The Hospital Medicare was up 2.17%, 0.18 percentage points below its August rate. The Professional Services Medicare Index posted a historic low of +1.57%, 0.79 percentage points below the previous month's annual growth rate.  For the first time since January 2010, the Professional Services Medicare annual growth rate is lower than the Hospital Medicare annual rate."

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 September 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:
Soogyung Cho
Communications
S&P Dow Jones Indices
[email protected]
917-239-0788  

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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