New S&P Index Will Track Changes in Health Care Costs

September 30, 2010 (PLANSPONSOR.com) - Standard & Poor's has entered into an agreement with Health Index Advisors (HIA), a joint venture between Aon Consulting and Milliman, to develop and publish a family of indexes tracking the ongoing change in costs of medical services.

The first index series within the S&P Healthcare Cost Index family to launch will be the S&P Healthcare Economic Indices. Expected to launch during the fourth quarter of 2010, the Indices will seek to reflect the per capita change in total allowed claim costs incurred by patients (through their co-payments) and health care benefit programs for services rendered by hospitals and physicians, according to a press release.    

S&P said the new index family will meet a longstanding market demand from employers, health plan providers and public policy makers for a current, independent measure of U.S. health care cost trends, helping to improve their ability to forecast future cost changes and manage the financial liabilities and revenues associated with their health care programs. The methodology for the indexes is derived in part from Milliman’s proprietary Health Cost Index (HCI) model.  

“These Indices will significantly improve the transparency of the health care market,” said Andrew Appel, Chief Operating Officer, Aon Corporation, in the press release.  “We believe the Indices will be the basis for developing new risk management tools, allowing employers to better manage future healthcare cost increases.”    

The complete methodology, fact sheet and supporting research for the S&P Healthcare Economic Indices will be available at http://www.standardandpoors.com/indices upon launch.

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