US Healthcare Costs Annual Growth Rates Decelerate in January 2012 According to the S&P Healthcare Economic Indices

NEW YORK, March 15, 2012 /PRNewswire/ -- 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 5.21% over the 12-months ending January 2012. This was a decline from the +5.30% annual growth rate posted for December 2011.

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 January 2012, down from the +7.11% reported for December 2011. Growth rates in Medicare claim costs rose by 2.40%, as measured by the S&P Healthcare Economic Medicare Index, down from the +2.52% reported for December. The Professional Services Index's annual growth rate also decelerated from its +5.37% December 2011 rate, increasing by 5.13% in January. The broad Hospital Index's annual growth rate increased slightly to 5.03% in January from its +4.99% December pace.

Looking at the narrower sub-indices, the Professional Services Medicare Index hit a two-year low of +3.32% in January 2012, down from +3.73% in December 2011. The Hospital Medicare annual growth rate increased in January at +1.56%, it was up from its +1.48% December level. The Professional Services Commercial Index decelerated to +6.02% in January from +6.15% in December; and the Hospital Commercial Index marginally decreased to +7.84% in January from +7.85% in the previous month.

"Healthcare costs' annual growth rates decelerated modestly in January," says David M. Blitzer, Chairman of the Index Committee at S&P Indices. "The fall and early winter of 2011 was highlighted by a general upward trend in healthcare costs, as measured by annual rates of change. This month's data, which was through January 2012, showed a modest deceleration in most types of healthcare costs, but not by enough to show any reversal of this trend. Over the past six months or so, annual rates of change in per capita healthcare costs were generally rising.

"In January, the Composite Index posted an annual rate of +5.21%, the Commercial Index +7.05% and the Medicare Index +2.40%. All three were down from their respective December 2011 annual growth rates, but are still above rates they posted in the summer and autumn months. A January deceleration was also seen in our Professional Services index; its annual rate of change moved down to +5.13% from +5.37% in December. The Hospital Index, on the other hand, moved up marginally to +5.03% from December's +4.99%.

"The Professional Services Medicare Index was the only one to hit a two-year low, with +3.32%.  It also showed the steepest deceleration, 0.41 percentage points, compared to December rates. The Hospital Medicare Index showed an increase in its growth rate in January, at +1.56%, up 0.08 percentage points from the last month.  It should be noted that this rate is still far and away the lowest among the nine indices we publish."

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 January 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 Indices as a subscription service.

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 www.healthcareindices.standardandpoors.com. A whitepaper introducing the S&P Healthcare Economic Indices has been published by S&P Indices and can be accessed at http://bit.ly/hhTvLb.

About S&P Indices

S&P Indices, a leading brand of the McGraw-Hill Companies (NYSE: MHP), maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.45 trillion is directly indexed to our indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit: www.standardandpoors.com/indices.

It is not possible to invest directly in an index. S&P Indices does not sponsor, endorse, sell, or promote any S&P index-based investment product. This document does not constitute an offer of services in jurisdictions where S&P Indices or its affiliates do not have the necessary licenses. S&P Indices receives compensation in connection with licensing its indices to third parties.

For more information:
Dave Guarino
Communications
S&P Indices
[email protected]
212-438-1471

David Blitzer
Managing Director and Chairman of the Index Committee
S&P Indices
[email protected]
212-438-3907

SOURCE S&P Indices

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