S&P Finds Slowdown in Growth Rate of U.S. Health Care Costs

January 20, 2011 (PLANSPONSOR.com) - Data by Standard & Poor's for the S&P Healthcare Economic Composite Index indicates that the average per capita cost of health care services covered by commercial insurance and Medicare programs rose 6.27% over the 12-months ending November 2010.

This is a deceleration from the +6.68% reported for the 12-months ending in October 2010, according to a press release.   

Claim costs associated with hospital and professional services for patients covered under commercial health plans rose 7.79% over the year ending in November, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs for the same services rose at a rate of 3.74% from the previous year, as measured by the S&P Healthcare Economic Medicare Index.  This is the lowest annual growth rate for Medicare claims costs since June 2007, when it was +3.55%.   

The two measures saw growth deceleration versus their October reports of +8.19% and +4.18%, respectively.  

“The slowdown in the annual growth rate of healthcare costs, which started around May 2010, continued through November,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, in the press release. “We are continuing to see a downward trend in the annual growth rates across all the indices.”  

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.