Healthcare Costs Up 7% by Sept.

John Commins, November 18, 2010

The average, per capita cost of providing healthcare services in the United States rose by 7.08% for the past 12 months ending in September, a rate of growth that has slowed slightly, but which is still well above the 1.1% overall inflation for the same period, according to the latest monthly study by Standard & Poor's.

The new numbers are consistent with a trend that from September 2000 to September 2010 has seen healthcare inflation rise 48% while overall Consumer Price Index has risen 26% for the same period, U.S. Bureau of Labor Statistics data show.

A further breakdown of the data from the S&P Healthcare Economic Composite Index show that physician and hospital claims costs associated with commercial plans rose 8.54% for the 12-months ending in September, while similar claims associated with Medicare rose 4.68%, despite Medicare's sicker, older population.

The annual growth rates calculate a percent change of the 12-month moving averages of the monthly index levels when compared with the same month in the previous year.

The trends mark a slight deceleration of growth from the 7.31% reported for the 12 months ending in August, 2010. Physician and hospital claims costs associated with commercial plans and with Medicare rose 8.64% and 5.07%, respectively, in the 12 months ending in August.

 "While annual expenditures for Medicare and commercial insurance programs continue to rise faster than either inflation or GDP growth, the pace has slowed slightly in the last seven months" said David M. Blitzer, chairman of the Index Committee at S&P. "In the 12 months ended in September, the composite index rose 7.08% compared to the 12 months ended last February when the increase was 8.39%. Expenditures associated with commercial health insurance plans continue to outpace expenditures for Medicare; the commercial increase over the 12 months to September was 8.54% vs. 4.68% for Medicare."

John Commins

John Commins is a senior editor at HealthLeaders Media.

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