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Healthcare Costs Continue to Climb, but Rate Slows

John Commins, for HealthLeaders Media, May 20, 2011

The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 5.77% over the 12 months ending in March 2011, continuing a nearly year-long deceleration of cost growth, Standard & Poor's Healthcare Economic Indices show.

March's results represent the lowest cost growth in the six-year history of the measure, and reflect a deceleration in healthcare cost growth from the +6.17% in annual growth posted in February, and +6.31% in January 2011 for this index, S&P said.

Even with the deceleration, healthcare costs grew by more than double the 2.7% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in March, Bureau of Labor Statistics data show.

In its six-year history, the highest annual growth rate for the S&P Composite index was during the 12-months ending May 2010, when it posted +8.74%. With March's report of +6.19%, claims costs growth rates have decelerated 2.97 percentage points in 10 months, S&P said.

A further breakdown shows that, over the 12 months ending March, healthcare costs covered by commercial insurance rose +7.57%, down from +7.97% for the 12-month period ending in February, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of +2.78%, for the 12-month period ending in March, down from of +3.22% for February, as measured by the S&P Healthcare Economic Medicare Index. This is also the lowest annual rate of growth posted for the Medicare Index in its six-year history, S&P said.

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