U.S. Healthcare Costs Climb 6.19% Over 12 Months

John Commins, April 22, 2011

The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 6.19% over the 12 months ending in February 2011, but those rates of growth continue to decelerate, Standard & Poor's Healthcare Economic Indices show.

February's results reflect a deceleration in healthcare cost growth from the 6.31% increase in annual growth rate posted in January 2011 for this index, S&P said.

Even with the deceleration, healthcare costs grew by more than triple the 2.1% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period, 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 February's report of +6.19%, claims costs growth rates have decelerated 2.5 percentage points in nine months, S&P said.

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

"The slowdown in Medicare claim costs may be having some impact on other factors in the healthcare industry," said David M. Blitzer, chairman of the Index Committee at Standard Poor's, in a media release.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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