Blitzer said S&P observed some interesting trends in hospital and physician wages and employment that reflect the changes in claims costs. "While growth in hospital wages has remained relatively stable over the past year, in the range of 3% - 4%, hospital employment growth has slowed down significantly," he said. "Between 2008 and early 2009, annual hospital employment growth rate was in the 2%- 3% range; however, since the middle of 2009, the rate has been consistently below 1%."
Blitzer said that physicians, who may have more flexibility in their choice of insurance contracts, have not been impacted as severely. "Physician wages were growing by about 5.4% as of February 2011, almost double their pace of 12-months ago; employment has seen a slowdown, but still registered an annual growth rate around 2.5% as of February," he said. "If the growth in insurance claims costs continue to slow down, whether due to contract negotiations for commercial insurance, or Medicare regulations or both, we will likely see an impact on employment, wages and benefits in the healthcare industry."
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. 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, S&P said.