Healthcare Cost Growth Steamrolls CPI

John Commins, August 17, 2012

The average per capita cost of healthcare services grew at more than three times the rate of overall inflation for the 12-month period that ended in June, with the cost of services covered by commercial health plans growing four times faster than those of Medicare, new data shows.

Standard & Poor's Healthcare Economic Indices show that per capita cost growth covered by commercial insurance and Medicare programs increased by 5.78% over the 12-months ending June. In the larger economy inflation rose by 1.7% as measured by the Consumer Price Index for the same period, federal data show.

A further breakdown shows that healthcare costs covered by commercial insurance plans increased by 8.09% over the year ending in June, down from the +8.4% annual increase reported for May. Medicare claim costs growth slowed to +2.27% when compared to May’s +2.5% growth.

"The remarkable thing we are seeing, no matter whether the prices have gone up or down over the years, has been how much has been shifted in terms of the annual rates of change into commercial usage as opposed to Medicare," Maureen Maitland, vice president of S&P’s Dow Jones Indices, told HealthLeaders Media.

John Commins

John Commins is a senior editor at HealthLeaders Media.


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