Physicians
e-Newsletter
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

Healthcare Cost Growth Slows but Easily Outpaces Inflation

John Commins, for HealthLeaders Media, November 20, 2012

"That's the long-term problem—getting labor productivity gains," he adds. "We are trying to do some things. The average hospital stay has been dramatically reduced from 20 years ago, [for] one example. Another is things like laparoscopic surgery. But there's an extent to which you can do these things. So, I would love to be optimistic but I think we are stuck with a margin of a few percentage points above the general rate of inflation for healthcare. It's not because people are getting cheated. There is no evil element to this. It is just a fact of life."

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.

Healthcare costs began to accelerate in May 2009 and peaked in May 2010, before decelerating through the first half of 2011. An acceleration trend began again in October 2011 but tapered slightly in June 2012.

In 2011 S&P reported that the average per capita cost of healthcare services covered by Medicare programs and commercial insurance grew by 5.28%, including 7.11% for commercial insurance plans and 2.51% for Medicare.


John Commins is a senior editor with HealthLeaders Media.

1 | 2 | 3 | 4

Comments are moderated. Please be patient.

1 comments on "Healthcare Cost Growth Slows but Easily Outpaces Inflation"


Jonathan Lauer (11/20/2012 at 10:04 AM)
Healthcare is growing at over double the rate of CPI inflation. Amazing that data like this is so routine that when the insane growth rate it is slightly less bad, it can be spun positively as "slowing". To get out of this mess, we need HC growing slower than inflation for a decade or so. We are trained to expect HC to grow faster than everything else and technology to get cheaper.