From the Wires
Annual Growth Rates Decelerate in November 2012 According to the S&P Healthcare Economic Indices
By: PR Newswire
Jan. 17, 2013 09:37 AM
NEW YORK, Jan. 17, 2013 /PRNewswire/ -- Data released today by S&P Dow Jones Indices for the S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.07% over the 12-months ending November 2012. This is a deceleration from the +5.27% annual growth rate recorded in October 2012.
Eight out of nine S&P Healthcare Economic Indices posted deceleration in their annual growth rates in November 2012. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 6.86% over the year ending November 2012, down from +7.15% reported for October 2012. Annual growth rates in Medicare claim costs rose by 2.32%, according to the S&P Healthcare Economic Medicare Index, down from +2.40% recorded in October 2012. The Professional Services Index annual growth rate was +6.49% in November 2012, down from the +6.61% October print. The Hospital Index's growth rate hit its historic low of +3.57% in November from +3.83% recorded in October 2012. It was driven by the Hospital Commercial Index, which hit its lowest rate since the index began in January 2005 with an annual growth rate of +4.26%. It posted a +4.79% annual rate last month.
The Professional Services Commercial Index decelerated to +9.03% in November, down from +9.06% reported in October. The Professional Services Medicare annual growth rate decelerated to +1.61% in November from +1.91% posted in October 2012. The Hospital Medicare annual growth rate posted +2.61% in November, up from its +2.54% October rate.
"Eight out of nine headline healthcare indices we cover, showed deceleration in their annual growth rates in November 2012," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "The Composite Index posted an annual rate of +5.07%, the Commercial Index +6.86% and the Medicare Index +2.32%. These three rates are lower than their respective October 2012 levels.
"With November data, we observe that the growth rate in the Hospital Index has decelerated for seven consecutive months, from a recent high of +5.75% in April 2012 to its historic low of +3.57%, posted in November. This downward trend was driven by a deceleration in hospital commercial plans. The +4.26% annual rate in November for Hospital Commercial Index is 0.53 percentage points below the +4.79% rate recorded in October and 4.47 percentage points below the 8.73% annual rate recorded in April 2012. The only index that showed acceleration in November was the Hospital Medicare Index; it posted +2.61% this month, 0.07 percentage points above its October rate.
"In November, the Professional Services Commercial Index was +9.03%, slightly lower than its October peak of +9.06%. It remains the highest index among healthcare indices we cover.
"The Professional Services Medicare Index was up 1.61%, 0.30 percentage points below its October rate. It is only 0.05 percentage points up from its historic low of +1.56% posted in September. It has the lowest annual growth rate among our healthcare indices."
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 in the U.S. 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.
The S&P Healthcare Economic Composite Index is a weighted average of the S&P Healthcare Economic Commercial Index and the S&P Healthcare Economic Medicare Index. Alternatively, it is a weighted average of the S&P Healthcare Economic Hospital Index and the S&P Healthcare Economic Professional Services Index, as each of these indices has the analogous Commercial and Medicare component.
The table below summarizes the year-over-year change in the S&P Healthcare Economic Indices for the 12-month period ending November 2012. With each monthly release, the index levels, including the 12-month moving averages, are recalculated for the full history of the indices, whenever there are revisions to underlying data used in the models. The entire revised history, as well as full results for the underlying S&P Healthcare Economic Indices, is available from S&P Dow Jones Indices as a subscription service.
As observed in the past, medical costs funded by commercial insurance plans significantly exceed those funded by Medicare.
The S&P Healthcare Economic Indices were developed in consultation with Health Index Advisors, a joint venture between Aon Hewitt and Milliman, Inc., and were derived from the former Milliman, Inc. Health Cost Index™ which was first published in 1987. The complete methodology, fact sheet and supporting research for the S&P Healthcare Economic Indices are available at http://www.spindices.com/index-family/specialty/healthcare-cost
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