Healthcare Cost Growth Deceleration Continues

The highest annual growth rate for the S&P Composite index in the past six years was during the 12 months ending May 2010, when it posted +8.74%. With April's report of +5.39%, Composite claims costs growth rates have decelerated 3.35 percentage points in 11 months. In that same 11-month span, the Commercial index fell from a record +9.87% to +7.13%, a deceleration of 2.74 percentage points. The Medicare index posted a record high annual growth of +8.01% in November 2009. Since then, it has decelerated by 5.53 percentage points.

"The trend of deceleration in US healthcare costs, which started in May 2010, continues," Blitzer said. "Both the Composite and Medicare Indices posted record low annual growth rates with this month's report. But while we continue to see healthcare costs decelerate, all three rates are still above core inflation, significantly so for commercial healthcare costs."

The biggest slowdown in cost growth has been in the Hospital and Hospital Medicare indices, where annual growth rates hit new six-year lows of +4.86%, and +0.93%, respectively, which Blitzer said is "arguably the only healthcare costs that are in line with or below core inflation rates."

The Professional Services index grew +5.73% for the year ending in April, is only 0.05 percentage points away from its historical low of +5.68% recorded in February 2009

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.

View All Comments Make a Comment

Comments are moderated. Please be patient.